IRS audit rates for individuals are way down

Operating with a smaller budget, the Internal Revenue Service audited 0.86 percent of all individual tax returns last year, down from 0.96 percent in 2013 and the lowest number since 2004.

In 2011, the agency audited 1 in 90 individuals and 1 in 8 people who earned more than $1 million, and in 2014, those rates decreased to 1 in 116 individuals and 1 in 13 millionaires. The decline is "deeply disturbing," IRS Commissioner John Koskinen said in speech Tuesday to the New York State Bar Association. "This continues a long-term trend that carries serious implications for our tax system, and the nation. The math is pretty simple. There are fewer audits because we have fewer auditors."

In 2014, there were 11,629 revenue agents, down 16 percent from a peak in 2010, Bloomberg reports. The agency's budget was cut by 3 percent for the fiscal year ending Sept. 30, and is under a hiring freeze. Koskinen has called for more funding, and the IRS might close for a few days later this year in order to save money.

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