far from true. the IRS passes on many enforcement actions because the cost-benefit calculus doesn't pencil out against wealthy and sophisticated parties who can afford to spend years in litigation.
The bulk of IRS enforcement is against low income people who cheat on child tax credits and earned income credit.
The nature of all predators is to attack the weak.
The vast majority of audits are of those making > 1,000,000 in income, and the average enforcement is more than $10,000.
Even with a few mega-enforcements to skew the numbers, the "bulk" of enforcement can't be against low income people, they don't owe enough to make the math work out.
So, let's do the math: on link #2 "Civil Penalties Assessed" for 2015 for Individuals there were 31,808,876.
Since there are only 3.7 million households making over 250,000 per year (https://en.wikipedia.org/wiki/Household_income_in_the_United...) even if 100% of wealthy individuals had enforcement actions, they would only account for ~10% of enforcement actions. So that is one data point.
If you go back to link 1 "Examination Coverage" you will see that the highest percentage of examinations amongst low/middle income people is for people with 0-25K income, which would coincide with precisely with the Earned Income Credit.
These examination percentages are also highly misleading because for simple low income tax fraud, like I am talking about, it is mostly detected by computers and they only "examine" it after they already know there is an irregularity.
You're both right. The bulk of enforcement actions, on the basis of volume of actions, is against low-income individuals because they are the most likely to underreport income (especially under-the-table compensation received as cash).
However, the bulk of enforcement penalties is against the wealthy, because they are the most likely to engage in large-scale tax evasion. Though within this category, it's actually the mid-tier wealthy, generally small business owners, who are most penalized, as they are the most aggressive in claiming deductions and credits to which they are not actually entitled. The ultra-wealthy will claim whatever deductions/credits their tax advisors say they can, but it's not worth it to them to be aggressive since the savings is usually insignificant compared to the potential penalties, or the cost of litigating a tax action.
> The bulk of IRS enforcement is against low income people who cheat on child tax credits and earned income credit.
Maybe by number, just because low income people are the majority of Americans. But in terms of actual dollar quantities? Probably not.
According to this (conservative) source, the bottom 50th percentile of Americans by income (under $38,173 in 2014) owed on average ~3.45% of their income in tax[0]. There's simple less room for evasion (when the maximum benefit is 3.45%) and the reclaimed dollars per enforcement is low compared to higher income Americans.
The bulk of IRS enforcement is against low income people who cheat on child tax credits and earned income credit.
The nature of all predators is to attack the weak.