Between 2013 and 2021, less than 1% of US taxpayers were audited, largely due to resource constraints at the IRS. High-income filers (over $10 million) faced an 8.7% audit rate, while middle-income earners ($50,000–$500,000) experienced audit rates below 0.5%. Interestingly, lower-income earners claiming earned income tax credits had relatively higher audit rates (up to 1.5%).
Recently, IRS resources increased briefly due to the Inflation Reduction Act but were later reduced significantly by Congress. Ongoing staff cuts, retirements, and resignations, especially in enforcement and audit departments, have left the agency relying increasingly on artificial intelligence (AI).
Experts, including former IRS commissioner Danny Werfel and taxpayer advocate Nina Olson, warn that heavy reliance on AI combined with fewer experienced staff might lead to inaccuracies in audits, poor customer service, and limited support for taxpayers disputing erroneous charges. They stress that while AI may streamline processes, it cannot yet adequately replace human judgment, posing risks to taxpayers’ rights and potentially reducing the government’s ability to effectively collect owed revenue.