IRS Enforcement Actions Still at Record Lows

by | Sep 17, 2018 | Enforcement | 0 comments

A report just released by TIGTA (the Treasury Inspector General for Tax Administration) shows that once again IRS audits of taxpayers are in decline.  Enforcement revenues are slightly up this year, but TIGTA says this is due to a small number of large corporate cases.

Some highlights of the TIGTA report:

  • “The number of staff assigned to Examination functions decreased 22 percent from FY 2013 to FY 2017, with a recent decline of 7 percent from FY 2016.”
  • “According to recent statistics, taxpayers filed nearly 196 million returns during Calendar Year 2016, of which less than 1 percent, or 1.1 million returns, were examined during FY 2017. This is a 32 percent decline from FY 2013 and a 9 percent decline from FY 2016, when there were approximately 1.6 million and 1.2 million examinations conducted, respectively.”
  • “The number of examinations performed by the LB&I Division decreased 8 percent from FY 2016 (34,676) to FY 2017 (31,880). This is also significantly less (41 percent) than the 54,211 performed in FY 2013.”
  • “The data show a significant downward trend in the IRS’s proposed audit adjustments over recent years. This may suggest that overall increases in enforcement revenues are not necessarily an effective indicator of how well the IRS’s traditional tax compliance enforcement tools (i.e.,
  • Examination and Collection) are performing under reduced funding.”

What does this mean to potential and current whistleblowers?  Based on my 20 years of experience in dealing with the IRS, it is more important than ever that your information stand out in a crowded field.  The likelihood that the IRS will act on unorganized or unpersuasive information is lower than ever – you have to clearly and concisely show and tell the IRS exactly how your information will lead to the collection of additional taxes (in period for which that statute of limitations is clearly open) if you wish to get anywhere with your award claim.  As always, the IRS must either collect additional tax or deny a refund based on your information for you to get an award.  However, first the IRS must decide to act on your information, and making your information stand out among others is the key to getting it selected to be used by the IRS.

Lynam Knott