The Treasury Department said in a May report about the proposal that tax audit rates would not rise for those earning less than $400,000 since the “compliance proposals are designed to ameliorate existing inequities by focusing on high-end evasion.”
A spokeswoman for Mr. McCarthy pointed to calculations from Republicans on the House Ways and Means Committee that compared historical audit data.
In the past decade, tax audit rates have fallen for higher-income earners and have stayed relatively stable for lower-income earners, which the Treasury Department attributed to the I.R.S.’s diminished resources and inability to retain specialized auditors needed to examine the filings of the wealthy.
The I.R.S. examined 1.4 million individual income tax returns in 2010, about 1 percent of the total number filed. In 2018, the latest year with available data, audits decreased to 370,000, or about 0.2 percent.
The Congressional Budget Office estimated that the bill would return enforcement to its 2010 levels. Doing so would indeed result in about 1.2 million more audits, and about 580,000 of those would affect people making less than $75,000.
But that is because a vast majority of tax filers — about 70 percent — make under that threshold. Looking at what fraction of returns are examined by income group, rather than the sheer number, shows that wealthier taxpayers would have a better chance of being audited than lower-income earners under the Democrats’ proposal.
Under 2010 levels of enforcement, about 0.5 percent of returns reporting between $1 and $75,000 in income would be audited, as would 1 percent of those with more than $75,000 in income. In comparison, those rates were 0.3 percent and 0.1 percent in 2018. For those making more than $10 million, more than 20 percent of returns would be examined under 2010 levels, compared with 5.3 percent in 2018.