(MARKETWATCH) — If the threatened shutdown at the Internal Revenue Service goes ahead, the tiny percentage of individual tax returns that gets audited is likely to shrink even further.
IRS Commissioner John Koskinen said the agency is considering a temporary shutdown due to budget cuts, and said that every day the agency is closed would save it $29 million. “People call it furloughs. I view it as: Are we going to have to shut the place down? And at this point, that will be the last thing we do,” he told the Politico website. “But there is no way we can say right now that that won’t happen.” Koskinen has also warned about overtime suspension and a hiring freeze.
Budget cuts are already taking their toll on the IRS, says Paul Dunham, managing director at accounting and professional services provider CBIZ MHM in Clearwater, Fla. “The more auditors you have, the more audits you’ll be able to complete,” he says. “I hate to use the word cheat, but there’s no question that, if individuals believe they’ve less likely chance of being audited, some will cut corners or do things to reduce their income.” As it is, only 1% of returns get audited, he adds.
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