IRS to increase audit rates for large companies and millionaires

For companies that have assets valued at more than $250 million, the agency will triple the rate of audits. For taxpayers earning more than $10 million, it will be increased by 50%.

The Internal Revenue Service (IRS) will increase audit rates by 50% for citizens who earn more than $10 million a year. This proposal will take effect in 2026, when 16.5% of these taxpayers will be audited instead of the current 11%.

But not only residents who have incomes greater than $10 million will be affected by this decision. The IRS also plans to triple the audit rate for companies that have assets worth more than $250 million (from 8.8% currently to 22.6% in 2026) increase audits on companies  that have assets estimated at more than 10 million dollars tenfold (from 0.1% to 1%), as reported CNN.

Citizens with the lowest income will not see increases in audits. "As I’ve said over and over again, there is no new wave of audits coming for middle- and low-income [taxpayers], coming for mom-and-pops. That is not in our plans in any way, shape or form," said Danny Werfel, commissioner of the agency.

Increasing staff to increase audits

One of the IRS's objectives is to increase its staff to reverse the low levels of auditing of large companies and taxpayers with high incomes. According to CNN, audit rates fell by 30% between 2010 and 2021.

In 2022, the agency increased its workforce with 11,000 jobs and its goal is to continue increasing it with 14,000 more before fiscal period 2029, reaching 102,500 employees.