WASHINGTON — The IRS is not living up to its pledge to crack down on wealthy tax cheats, an IRS watchdog group says, citing a drop in audits of millionaires last year.
"In the face of growing federal deficits and public calls to lower the tax gap — the amount of taxes due but not reported and paid — the drop in millionaire audits is surprising," said the Syracuse University-based Transactional Records Access Clearinghouse in a report today.
It said the significant drop in audits of richer Americans contrasted with IRS statements last year that it was making strong progress in enforcement, especially of those with incomes of more than $1 million.
The tax agency disputes the conclusion, ascribing the "slight" decline in audits to its focus on getting people their economic stimulus checks.
IRS spokesman Terry Lemons said that what they regarded as a "slight" drop in audits reflected a year in which the agency was dealing with budget constraints and assuring that economic stimulus checks reached mailboxes and bank accounts.