The IRS are shifting focus from high net worth individuals to small business owners

Newell Normand

The IRS has failed in their mission to audit high net worth individuals. Instead, they are shifting their focus to people who are small business owners. Demian Brady, Vice President of Research for the National Taxpayers Union Foundation, joins Newell to explains how in 2020, the Department of the Treasury directed the IRS to audit at least 8% of individual returns with incomes of $10 million or higher. After three years, the IRS gave up on this because a high percentage of these audits resulted in no additional taxes owed. As it turns out, these filers were generally in compliance. Instead, the IRS lowered its threshold to target filers earning at least $400,000, as it may find small businesses to be an easier target because they may not have the sophisticated accounting systems or expertise that larger corporations possess.