A highly successful black friend who has held senior roles in government told us how shocked he was when his white fiancée threw away her receipt as they left a New York City department store. "What are you doing?" our friend asked her. He would never toss a receipt for fear of being accused of shoplifting. She didn't understand what he was upset about, for she couldn't imagine herself being accused in that way.
Only about 6 percent of tax returns of those with
income of more than $1 million are audited, along with 0.7 percent of business tax returns. Meanwhile, there is one group that the IRS scrutinizes rigorously: the working poor with incomes below $20,000 a year who receive the Earned Income Tax Cedit. More than one-third of all tax audits are focused on that group struggling to make ends meet, even as the agency cuts back on audits of the wealthy — while the top 5 percent of taxpayers account for more than half of underreported income. Overall, criminal prosecutions of tax cheats are now exceedingly rare, just one for every 385,oo0 households. Every dollar invested in the lRS for audits brings in $200 in new revenue