Form 1040 with a pen and a calculator

The IRS will have to work harder with a smaller budget this year and “will operate well below historical levels,” the federal tax agency’s chief told Congress this past week.

According to John Koskinen, the IRS Commissioner, tax examiners will carry out 100,000 fewer audits this year. There will be similar declines in audits of high-wealth individuals, businesses and partnerships, along with an estimated 190,000 fewer collection activities,” said Koskinen, and “the government will lose almost $3 billion as a result.”

The present-day budget for the IRS is just more than $11 billion, which is approximately $850 million below their 2010 budget. Since then the IRS has lost around 10,000 full-time employees. Despite the smaller budget and lack of employees, Koskinen believes the IRS had a fluid tax season this year. For example, the IRS received more than 134 million individual tax returns before April 25.

Currently IRS rates are low. “Just 0.6% of taxpayers whose adjusted gross income ranged from $50,000 to $75,000 were audited in federal fiscal year 2013. The comparable rate for those with incomes from $100,000 to $200,000 was 0.77%, the data shows. However, higher-earning taxpayers were somewhat more likely to face examination. Those with adjusted gross income from $200,000 to $500,000 faced a 2.06% audit rate in fiscal year 2013, the IRS data shows. The rate jumped to 3.79% for those who earned from $500,000 to $1 million, and to 9.02% for adjusted gross income from $1 million to $5 million, the data shows,” wrote Kevin McCoy of USA Today.

While hiring a private-sector debt collector to help tax enforcement was a suggestion, Koskinen rejected the idea of hiring them telling Congress that the IRS’s use of debt collectors was not efficient in 2006. He told Congress that the IRS would be better off with hiring more agents.

While it may seem like the IRS may be performing less audits, it does not protect most Americans from IRS investigation. Make sure to keep all receipts and documentation to protect yourself against potential IRS debt.

If the IRS has audited you or someone you know and you are now facing back taxes, it is important to contact an experienced tax resolution attorney. The professional resolution lawyers at U.S. Tax Shield can help you get out of IRS debt today.