Letter to Steven Mnuchin, Secretary of the Treasury - Chairman Neal Calls on IRS to Fairly and Responsibly Audit Taxpayers Across Income Levels

Letter

I write today to reiterate my concern about the failure of the Internal Revenue Service (IRS) to
audit high-income taxpayers, which was the subject of a report publicly released by the Treasury Inspector
General for Tax Administration (TIGTA) today.1
TIGTA's findings raise serious concerns with respect
to the fairness of tax administration for all Americans.
Last year, during your testimony before the Committee on Ways and Means (Committee) on the
Administration's FY 2019 budget proposals, I stated that we need to provide the IRS with the resources
necessary to ensure that it executes its work fairly and responsibly. As the IRS has admitted, it is more
difficult and costly to examine the complex returns of a high-income taxpayer than a simple Form 1040
of a low-income taxpayer. As a result, low-income taxpayers are audited at a disproportionately higher
rate. This is unfair.
Earlier today, TIGTA reported that nearly 880,000 high-income taxpayers had not complied with
their tax filing requirements. These nonfilers account for 34% of high-income taxpayers, and their tax
due with respect to this noncompliance is over $45 billion. Most of these high-income nonfilers were
never selected for examination or remain in the collection inventory unlikely to be pursued. The IRS must pursue noncompliance fairly across every income level. I respectfully request that
you provide the Committee with your program and resource plans to address the high-income nonfiler
issue identified by TIGTA. Please provide these materials by no later than June 15, 2020.

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