October 2021 Short Bits

AUDIT DECREASES

For 2020, the IRS audit numbers dropped, continuing a downward trend. The Service concluded nearly 510,000 audits resulting in taxpayers paying an additional $12.9 billion in taxes, with a focus on those who didn’t file and those with certain abusive transactions. Last year’s audit count is down from 2019 figures, where 771,000 audits were wrapped up, resulting in an additional $17 billion in tax revenue. These recent numbers reflect another downward trend at the IRS—staff size. In 2020, the Service had nearly 76,000 full-time equivalent positions, down from over 90,000 in 2010.

ITEMIZED DEDUCTIONS

Fewer taxpayers are itemizing deductions on their personal tax returns. Using data from 2019 federal tax returns, nearly 17 million returns claimed $637 billion in itemized deductions, while over 140 million returns took $2.4 billion of standardized deductions. This large disparity is primarily caused by the 2017 tax reform laws that hiked the standard deduction and pared down itemizations. Taxpayers with adjusted gross income (AGI) of $250,000 and above had the highest average itemized deductions amount—more than $75,000, while taxpayers with under $15,000 of AGI had the lowest—just over $22,000.

AMBULANCE RIDES

In December 2020, Congress passed the “No Surprises Act,” prohibiting most surprise out-of-network billing for plan years starting in 2022. But it excludes ground ambulance services. According to a recent Kaiser Family Foundation study, ambulances bring three million privately insured people to an emergency room each year. Local fire departments and governmental agencies provide nearly two-thirds (62%) of the rides. About half (51%) of emergency and 39% of non-emergency ambulance rides included an out-of-network charge that may put privately insured patients at risk for getting a surprise bill.