Hey Congress, Why Don’t You…? Audit Every Year

Sheila Billingsley writes:

I have a controversial suggestion for Congress: audit tax returns every year.

I prepare tax returns for a large tax company. One of the biggest sources of stress for taxpayers is whether or not they will get audited. Many of them do everything right but are still very scared of an audit because they have heard horror stories about the IRS.

In some other countries, the government does a quick audit of the tax returns every year, matching up wages with reported income, etc. This is a great idea. It gives immediate closure to taxpayers who are doing the right thing and speeds up payment of taxes. Because audits would be done for every person, it would help catch tax cheats.

As a tax preparer, I think it would also help eliminate fraud at the tax prep level. When you read about tax fraud committed by preparers, it is clear that it is the same people doing it over and over. Most of us do a good job. But some preparers make their money by making promises that they can save money or get bigger refunds by cheating a little bit. If taxpayers knew that this would be more difficult, they would not want to participate so there would be less business for fraudulent preparers. And if those preparers knew there was a bigger chance of getting caught, they would probably think twice before proposing a fraud scheme.

I realize that this would result in an increase in administrative costs up front to the IRS. But I think the savings in the long run would be worth it.

I also know that some people will not like the idea at first because it’s scary to be audited. But if the IRS checked everyone’s return every year, there would be no reason to worry later.

Other countries do this successfully. I think we should give it a try.

Kelly Phillips Erb

Kelly Phillips Erb is a tax attorney, tax writer, and podcaster.

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