, with the audit rate for those earning $10 million or more falling from nearly 14% in 2012 to 9% in 2018, the last year for which the IRS has a good idea of the final rate. They estimate it fell to under 2% by 2020, although the IRS notes that the rate for the most recent years will increase as more audits are opened over time. A 2022from the Government Accountability Office found that, from 2010 to 2018, audit rates fell the most for taxpayers making over $200,000.
Part of that is due to the sheer cost of auditing the country's highest earners, who generally have more complex incomes and situation. As the authors of the latest report on audits find, it costs a little over $5,000 to audit someone who's in the bottom half of earners; meanwhile, it costs just over $15,000 to audit someone earning in the top 0.1%. But an audit of a top 0.
According to the paper, after getting audited, those taxpayers experience what's called the deterrence effect. After getting audited once, they're more likely to keep paying more of what they're supposed to pay. Per the researchers, those extra taxes one-time auditees pay out raise three times as much revenue as the initial audit, and that holds true for the richest tax payers.
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