Comment by gruez
5 years ago
>But what they're really doing is auditing several totally innocent people to find someone who has significantly underpaid and covers the costs of the audits for the others.
Is that's what's happening though? Although the budget cuts have reduced the amount of audits across the board, audits of the rich has dropped faster than everyone else[1]. Therefore, it's reasonable to assume that the rich has benefited from this policy more than the average joe.
[1] https://www.propublica.org/article/how-the-irs-was-gutted
Audits skew disproportionately to people with money to begin with because that's where the biggest potential gains are. That's also why there are audits of people receiving the EITC -- it has a high enforcement efficiency because that type of fraud is frequently unsophisticated and easy to uncover, but can amount to thousands a year.
The problem with audits of "the rich" is that the gains realized in practice often aren't that large, because their audits are the most expensive even if they have the most potential for uncovering fraud. So they go out and audit several "rich" small businesses, impose major costs on each of them, and uncover significant fraud in one. Which covers the costs of the IRS in doing the other fruitless audits, but not the costs of the other small business owners, who are understandably pretty upset at having to pay a bunch of uncompensated costs and their own time for an audit that didn't uncover anything.
What they ought to do is have the IRS compensate the subjects of an audit for their time and costs, but you can imagine how expensive that would be for the government. (It's already that expensive for the taxpayer.)