Watchdog: Auditing the rich could earn the IRS $4,545 per hour

Watchdog Agency Says IRS Doesn't Audit The Superrich Enough

Who qualifies as "high income" in the U.S. might be changing after an audit found the IRS isn't focusing enough resources on the super rich.

The report from a Treasury Department agency dedicated to IRS oversight shows every audit hour of people making $5 million or more nets the government $4,545. Every hour dedicated to someone making in the $200,000-$400,000 range? Just $605 an hour.

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That in itself isn't terribly surprising. More income means more possible money missed. And the report's own intro even says high-income taxpayers are more likely to be involved in complex financial arrangements with "aggressive tax planning."

But here's the thing. Audits are at their lowest rate in a decade and have been declining steadily for the last four years straight. And guess which tax brackets saw the biggest drop-off in audits — the top three.

The report also seemed to indicate a somewhat arbitrary system, stating, "It is not clear that the IRS audits the most productive high-income taxpayer cases or that it has a clear rationale for the inventory balance it has established among taxpayers at different (income) levels."

Ultimately, the report recommended several changes, including that the IRS consider changing income thresholds and what the agency considers "high income."

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Watchdog: Auditing the rich could earn the IRS $4,545 per hour
DORAL, FL - DECEMBER 10: Glenn Rehn (C) and Sandy Lleo (R) along with other protesters rally together outside the office of U.S. Sen. Marco Rubio (R-FL) on December 10, 2012 in Doral, Florida. The protesters are hoping that Senators like Rubio will not cut medicare/social security benefits and will agree to raise taxes on the top 2% of earners in the country. (Photo by Joe Raedle/Getty Images)
DORAL, FL - DECEMBER 10: Manuel Lloyd along with other protesters rally together outside the office of U.S. Sen. Marco Rubio (R-FL) on December 10, 2012 in Doral, Florida. The protesters are hoping that Senators like Rubio will not cut medicare/social security benefits and will agree to raise taxes on the top 2% of earners in the country. (Photo by Joe Raedle/Getty Images)
CHICAGO, IL - DECEMBER 06: Protestors call for an increase of taxes on the wealthy and voice opposition to cuts in Social Security, Medicare, and Medicaid during a demonstration in the Federal Building Plaza on December 6, 2012 in Chicago, Illinois. About 300 protestors participated in the demonstration which resulted in three arrests. (Photo by Scott Olson/Getty Images)
TRENTON, NJ - FEBRUARY 24: New Jersey Gov. Chris Christie delivers his budget address for fiscal year 2016 to the Legislature, February 24, 2015 at the Statehouse in Trenton, New Jersey. Christie proposed a budget of $33.8 billion, that did not include new taxes or an increse in school spending. (Photo by Jeff Zelevansky/Getty Images)
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