IRS admits it audits poor people because auditing rich people is too expensive

Nine years ago, Republican lawmakers gutted the IRS's budget, but didn't relax its requirement to conduct random audits: in response, the IRS has shifted its focus from auditing rich people (who can afford fancy accountants to use dirty tricks to avoid paying taxes) to auditing poor people (who can't afford professional help and might make minor mistakes filling in the highly technical and complex tax forms), until today, an IRS audit is just as likely to target low-income earner whose meager pay entitles them to a tax credit is as it is to target a filer from the top one percent of US earners.

Propublica pointed this out in an excellent tax-season report last April, and Senator Ron Wyden [D-OR] took up the issue with the IRS. Now, IRS Commissioner Charles Rettig has provided a report to Senator Wyden admitting that his agency targets poor people because they can't afford to appeal the audits, making them cost-effective notches on the IRS's bedpost.

Rettig's report admits that auditing rich people would turn up more fraud and bring in more money for the US government, but says that he can't afford to do so unless Congress restores the IRS's funding. There's bipartisan support for such a measure, but with Sen Mitch McConnell blocking any Senate action, there may not be any more appropriations bills in 2019.

On the one hand, the IRS said, auditing poor taxpayers is a lot easier: The agency uses relatively low-level employees to audit returns for low-income taxpayers who claim the earned income tax credit.