The National Bureau of Economic Research released a study on Monday that finds exceedingly high tax evasion rates from America’s wealthiest taxpayers.
The findings of the study have concluded that the IRS have missed “substantial (tax) evasion at the top of the income ladder”. The study would go further on to blame the “random audit” structure the IRS employees, which “does not detect the most sophisticated forms of evasion”.
According to data pulled from the IRS’s National Research Program, audits on millionaires and wealthy business leaders pulled in $1.2 billion in tax revenue in 2020. During the Obama administration’s tax crackdown, the US pulled $4.8 billion from the same audits.
Economists and financial educators say that steady budget cuts to IRS programs have largely caused its decreased effectiveness in recent years.
Last Thursday IRS Commissioner Charles Rettig testified before the House Ways and Means Subcommittee on Oversight, where he told representatives that the IRS audited 8% of taxpayers making over $10 million in 2020. This is a 15% slide from 2010 when the IRS audited 23% earners over $10 million.
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