The process of auditing can be costly for the IRS. As a government agency, it relies on funding from the federal government to operate.
When funding for the agency is low, it often leads the IRS to avoid auditing people making the most money. These higher earners pose some obstacles for the agency that requires more money per audit. The IRS admits that it finds it easier to go after lower-income earners than higher earners due to limited resources.
Professional help
One of the reasons why the IRS may default to auditing lower earners is that they do not have the same resources as higher earners. They cannot afford to hire professional help to fight the audit process. The IRS often has to engage in legal back and forth with a higher earner audit because those people can afford to hire professionals to help them.
Complexity
Higher earners also have more complex cases. They take more time to audit because there are more details involved in unraveling their tax documents. This takes time, which means more money to audit. The IRS may be unable to do as many of these cases each year as it can do lower-income earners whose cases are far easier and quicker to audit.
What this means for the average taxpayer is that the more money you make, the less likely you are to have an audit in tax years when the IRS has low funding and fewer agents. But lower earners are more likely to have their taxes enter an audit in these situations. It is worth paying attention if you have concerns about the IRS auditing you.