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In response, two progressive Democratic lawmakers have authored legislation cracking down on tax evasion.

The new Internal Revenue Service figures compiled by Syracuse University researchers show that in the last eight years, there has been a 72 percent drop in the number of audits of those making more than $1 million. In all, 98 percent of those making more than $1 million did not face an audit last year.

There has also been a 55 percent drop in the number of audits of America’s largest corporations. In 2012, almost all corporate giants were audited. In 2020, however, almost two thirds of those corporations were not subjected to audits.

Amid this decline in scrutiny of the rich, a letter to the Biden administration from 88 progressive groups pointed out: “Since 2011, audit rates for millionaires, who are disproportionately white, have dropped more than twice as much as for taxpayers claiming the (Earned Income Tax Credit), who are disproportionately people of color. Audit coverage is now the heaviest in many low-income majority-Black counties.”

The sharp reduction in audits of the rich contributes to the tax gap between the amount of taxes owed and paid. In 2012, audits of wealthy individuals and large corporations recovered roughly $29 billion of revenue. Eight years later, the far fewer audits recovered less than $7 billion. IRS referrals for criminal prosecution and Justice Department tax convictions have both hit an all-time low.

“At a time when Americans face growing economic inequality and financial hardship caused by the COVID-19 pandemic, the IRS is letting billions of dollars in tax revenue slip through its fingers,” wrote Syracuse researchers. “As public attention focuses on how the country can restore faith in our democratic institutions, one area that should not be overlooked is how the nation can better ensure that our income tax laws are fairly and effectively administered.”

“High-income taxpayers are generally not a collection priority”

The situation is the result of both agency priorities and funding cuts.

A recent report from the Treasury Department’s inspector general concluded that at the IRS, “high-income taxpayers are generally not a collection priority, nor is there a strategy in place to address nonpayment by high-income taxpayers.” As evidence, the report showed that the agency failed to recover more than 60 percent of the $4 billion in back taxes owed by those making more than $1.5 million.

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