IRS Commissioner Disputes Reports of Enforcement Weakness, Notes Stats Are Closed Cases

By:
Chris Gaetano
Published Date:
Jun 21, 2019
IRS

IRS Commissioner Charles Rettig, in a recent speech, disputed the notion that tax cheats are unlikely to ever get caught, noting that there's more to the statistics than meets the eye, according to Accounting Today

Over the past decade, the IRS has been subject to repeated budget cuts, which have had the effect of blunting the agency's enforcement function, among others. Statistics have shown that with fewer auditors to work with, the chance of being audited by the IRS has gotten lower and lower. In a recent GAO report, it was said that, without more staff, the IRS cannot properly enforce the tax laws, which has led to billions of dollars of unpaid taxes every year. 

While Rettig acknowledged the resource challenges of the IRS, he warned tax practitioners against thinking that it will never come for them or their client. While it may take longer than it did before, he said that "when the IRS gets there, they're going to get there." He pointed out that while the statistics do indeed show a decline in audit and enforcement rates, they refer only to closed cases. He said there is a significant number of open cases, and although maybe less than 10 percent of those audits are closed during any particular year, that still means there is an audit in progress. 

During his talk, he also noted to the room of tax practitioners that he himself came from their ranks, and knows the tricks—such as using the return as more of an opening to negotiate—that certain practitioners use. But, we warned, “A tax return is not an offer to negotiate. A tax return is signed under penalty of perjury. Often it's prepared by a preparer who has extensive experience. I understand you rely on the information the taxpayer provides, but you have to have some reasonable basis to rely on that information.”

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