By the Numbers: The IRS 2024 Data Book

IRS Data BookInterested in the activities of the Internal Revenue Service (IRS) around tax audits, collections , and tax returns? The agency recently released its Data Book for 2024. The annual compilation provides activity statistics for the preceding year.

 

The first IRS Data Book was published in 1995 and covered the years 1993 and 1994. The 30th anniversary issue of the Data Book arrives as the IRS emerges from a successful reinvigoration, following a funding boost from the previous administration. The agency is moving into a dramatically different phase where agency mandate, budget, and function are already seeing significant change.

 

Highlights of the 2024 IRS Book

Tax cheating: The IRS queries taxpayers through its Comprehensive Taxpayer Attitude Survey (CTAS) that reaches about 1,500 taxpayers. Of this group, 84 percent felt it was never acceptable to engage in tax evasion. That left 10 percent who felt that cheating “a little here and there” on tax returns is acceptable, and six percent who felt it was fine to cheat “as much as possible.” 

 

IRS audits: The receipt of an IRS tax audit letter marks the beginning of an often-uncomfortable tax process for individuals and their businesses. In 2024, the IRS closed 505,514 tax return audits, which recommended more than $29 billion in additional taxes. Of these, 2.5 percent of taxpayers did not agree with the result of the IRS examiner. Interestingly, 14,461 income tax audits were resolved with recommended refunds to taxpayers of $8.3 billion.

 

Types of audits vs outcome: Of 2024 tax audits, 22.1 percent were handled in the field, with a corresponding $23 billion in recommended additional tax. Correspondence audits made up the other 77.9 percent and resulted in over $6 billion in recommended additional taxes.

 

Criminal investigations: In 2024, the IRS closed 2,481 criminal tax investigations. Of these, 1,794 were referred for prosecution, with another 687 concluded without prosecution. Of those prosecuted, 1571 convictions were obtained. Overall, 1,582 were sentenced, and 1,198 of those were imprisoned. Of those sentenced, 75.7 percent were incarcerated. While the number of prosecutions may decline with a change in the tide of enforcement efforts, it seems likely that success rates on those cases chosen for prosecution will remain robust.

 

Offers in Compromise (OIC): In the past year, the IRS received 33,591 Offers in Compromise (OIC) to address outstanding large tax liabilities for less than owed. Of these, the IRS accepted 7,199 offers that totaled $163.4 million (emphasis added). While OICs are an important tool for reducing tax debt, they are specialized—work with an experienced tax attorney if you are considering an OIC. 

 

Tax penalties: Overall, the IRS assessed $84.1 billion in civil penalties in 2024 on individual, estate and trust income tax returns. At the same time, the IRS reduced or addressed $75.2 billion in tax penalties on the same type of returns.

 

The IRS Data Book provides a broad perspective on IRS service, compliance and collection efforts. If you have a complex business or portfolio and receive an audit letter, speak with an experienced tax attorney before you speak to the IRS. Make sure you know your own numbers before the IRS does.

 

Strategic guidance on compliance and collection issues with the IRS

When you are involved in a tax controversy, our legal team offers strategic guidance to help recognize and resolve challenges with the IRS. Set up a consultation or call us at 440-250-9709. We serve clients across the U.S. and internationally from our offices in Cleveland and Chicago. 

 

For additional support, we invite you to explore our comprehensive guide, Since You Asked: 15 Common and Concerning Tax Law Questions and Answers. In this guide, we delve into 15 frequently asked tax law questions, providing thorough answers to help you address immediate concerns and better understand IRS practices. This resource is an invaluable tool for anyone needing to navigate the complexities of tax law and understand when to seek qualified legal advice before engaging with the agency.

 

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