IRS Falls Short on Hiring Targets, Focusing 63% of New Audits on Middle-Class Earners

Last April, the IRS launched a strategic plan to recruit 20K new agents and intensify “enforcement on wealthy individuals and corporations.” A year later, little progress has been made, with 63% of new tax audits targeting individuals earning under $200K annually — while a smaller portion is aimed at the highest earners.

• The IRS had missed its goal of bringing on 3,833 revenue agents last year, adding just 34. Additionally, staffing levels experienced an 8% decline between 2019 and 2023.
• Despite offering $125K salaries, the IRS’ struggle to attract mid-career professionals due to limited resources and stiff competition from the private sector underscores the broader challenges in the financial sector, which are prompting a turn to innovative AI solutions.

Inequality stat overload: By the end of 2023, the wealth of the top 1% of earners reached a record $44.6T, largely driven by rising equity values. That’s 49% higher than the end of 2020, even though the S&P 500 grew by just 27% during that same period. While the percentage of US households holding stocks has grown to a record 58%, the bottom 50% of US households collectively hold only 1% of US equities and mutual funds. The Average Joe still has a long way to go.

While the IRS focuses on auditing the middle class, a seismic shift in wealth is on the horizon as millennials are set to inherit over $90T — discover what this means for the future of wealth management.