The IRS has made little progress in complying with a Treasury Department directive that asked the agency to not target people earning less than $400,000 per year with higher audit rates, according to a recent report by the Treasury Inspector General for Tax Administration (TIGTA).
In August 2022, the Inflation Reduction Act (IRA) granted the IRS almost $80 billion in funding for a 10-year period, an amount that was eventually reduced to $57.8 billion. Out of this, $24 billion is set aside for enforcement activities. The same month, the Treasury secretary issued a directive to the IRS commissioner asking the tax agency to not use the additional IRA funding to boost audits on small businesses or households making less than $400,000 per year.
