Economists find that every extra dollar spent on auditing the top 10% of taxpayers yields $12 in revenue.
A new paper from economists at the Department of Treasury, Harvard University, and the University of Sydney looks at the return on investment from IRS audits from 2010 through 2014.
They find that while it's much more expensive to audit the wealthiest tax payers, it's still a hearty return on investment.
Auditing the top 1% yields $4.25 per dollar spent, and that number soars to $6.29 when auditing the top 0.1%.
The findings illustrate how much money might be sitting untapped in what the IRS calls the tax gap — the chasm between taxes owed and taxes paid.
Persons:
—, it's, Amy Hanauer, Hanauer, what's
Organizations:
Service, Department of Treasury, Harvard University, University of Sydney, Treasury Department, Taxation, Economic, Republican, IRS, Office