The IRS hires 700 new auditors raising the ire of republican watchdogs and raising new questions about Commissioner John Koskinen’s previous testimony regarding budget cuts and the need for an increase in the budget for the IRS.  The Chairman of the House Oversight and Reform Committee responded sharply:

“Now, less than three months later, without that increase, you have announced plans to increase enforcement activities. The inescapable conclusion is that your testimony to Congress was inaccurate, reflecting either an attempt to exaggerate IRS’s budget needs or a management failure in understanding the needs of your organization.”

What does this mean for US taxpayers?  It doesn’t take a leap of logic to understand that an addition of 700 additional auditors will increase the number of audits the IRS is performing from here forward.  Recently, news outlets had proclaimed that your audit risks were below 1%.  US taxpayers are on notice: the IRS intends to increase revenues, and an IRS audit is the primary tool for accomplishing this goal.

Recent court victories against (then) presidential candidate Rand Paul and last week against taxpayer Bernhard Gubser have emboldened the agency, and enforcement of Offshore audits related to FBAR compliance are sure to significantly increase.  More than a million taxpayers filed an FBAR in 2015, and the agency perceives a genuine opportunity in pursuing those who have either failed to come into compliance, or who applied under the Streamlined program claiming “non-willful” conduct.  Recently, the IRS returned several streamlined applications requesting clarification, while simultaneously changing the streamlined application form to make the task of qualifying as “non-willful” substantially more difficult.

The result is clear: When the IRS hires 700 new auditors the US taxpayer faces a greatly increased chance of facing an IRS audit.

Protect yourself.  If you have been contacted by the IRS with questions about an OVDP or streamlined application, or if you have received an IRS audit notification we invite you to call us for a free consultation at 866-631-3470.


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To set up a free, no-obligation consultation with one of our knowledgeable San Diego based estate planning, business and tax lawyers, or learn more about our tax preparation, accounting and business advisory services call us at 866-631-3470 or contact us.