IRS Collection Facts and Statistics

IRS Collections and Enforcement Data

We are going to examine the most recent data available on the IRS’ collections and enforcement, sourced from the 2015 Internal Revenue Service Data Book, which is a trove of data and statistics about all aspects of the IRS. While this information is not necessarily actionable for we taxpayers (or non-payers) it gives us all an excellent idea as to the scale and scope of the IRS, and also the American economy.

Gross Collections

  • In 2015 the IRS collected over $3.3 trillion dollars of taxes, up almost 10% from 2014, and is the highest gross collection amount in U.S. history.
  • The IRS processes over 243 million Federal Tax Returns, most of them electronically.
  • The top three states, in order, for most taxes paid: California, Texas, New York. The three states with the least amount of tax paid were Wyoming, Montana, Alaska. Comparing the top and bottom states, California paid 77 times more taxes than did Wyoming.

2015 Collections and Revenue by State

Rank State Gross collections (in thousands) Revenue per capita GSP
1 California $405,851,295 $10,408 16.6%
2 Texas $279,904,425 $10,204 17.1%
3 New York $269,716,999 $13,659 18.5%
4 Florida $177,389,488 $8,762 19.9%
5 Illinois $158,042,273 $12,310 20.5%
6 New Jersey $153,917,572 $17,226 26.6%
7 Ohio $140,981,150 $12,148 23.5%
8 Pennsylvania $136,108,810 $10,640 19.9%
9 Massachusetts $108,049,205 $15,927 22.6%
10 Minnesota $106,927,808 $19,504 31.9%
11 Georgia $86,446,602 $8,476 17.2%
12 Virginia $80,242,853 $9,590 16.7%
13 North Carolina $78,736,401 $7,846 15.4%
14 Michigan $77,948,414 $7,860 16.7%
15 Washington $73,334,437 $10,242 16.3%
16 Missouri $64,112,504 $10,551 22.1%
17 Maryland $63,936,798 $10,665 17.5%
18 Tennessee $62,708,662 $9,508 20.2%
19 Connecticut $59,174,581 $16,507 22.6%
20 Indiana $57,972,825 $8,767 17.5%
21 Wisconsin $51,748,831 $8,972 17.2%
22 Colorado $47,210,720 $8,664 14.8%
23 Arizona $42,631,316 $6,253 14.3%
24 Louisiana $42,628,150 $9,130 16.8%
25 Oklahoma $33,942,286 $8,687 18.9%
26 Kentucky $32,708,391 $7,392 16.8%
27 Arkansas $32,508,761 $10,917 26.3%
28 Oregon $31,219,148 $7,757 13.7%
29 Kansas $27,019,291 $9,295 18.1%
30 District of Columbia $25,583,750 $38,163 20.8%
31 Nebraska $25,103,770 $13,256 22.4%
32 Alabama $25,070,261 $5,165 12.0%
33 South Carolina $24,086,257 $4,921 12.1%
34 Iowa $23,969,391 $7,678 14.0%
35 Delaware $22,640,853 $23,982 34.2%
36 Utah $20,178,718 $6,747 13.6%
37 Nevada $18,450,072 $6,398 13.1%
38 Rhode Island $14,373,318 $13,616 25.5%
39 Mississippi $11,468,660 $3,836 10.7%
40 New Hampshire $11,314,985 $8,507 15.8%
41 Idaho $9,785,027 $5,920 15.0%
42 New Mexico $8,969,666 $4,312 9.9%
43 Hawaii $8,221,290 $5,769 10.3%
44 South Dakota $7,732,138 $9,013 17.0%
45 North Dakota $7,711,243 $10,189 14.4%
46 Maine $7,464,280 $5,615 13.5%
47 West Virginia $7,374,299 $4,005 10.4%
48 Montana $5,805,098 $5,625 12.7%
49 Alaska $5,717,640 $7,751 10.5%
50 Wyoming $5,284,146 $9,009 13.2%
51 Vermont $4,495,280 $7,180 15.1%
Puerto Rico $3,524,557 $1,015 N/A
TOTAL $3,283,920,138 $10,234 18.3%

Audits

The IRS audited 1.4 million tax returns in 2015. This may sound like a lot but this is only 0.7% of all tax returns and is a historically very low level. These audits yielded an additional $7.4 billion in taxes to the IRS.

graph of irs audits 2010 to 2015

Third Party Income Verification

  • The IRS receives information from party A about Party B, and visa-versa. Party A paid B (amount), and B received from A (amount). These numbers must match. If there is a mismatch, the IRS has a clue there may be under-reporting of income.
  • In 2015 the IRS received over 2.6 billion third-party information returns and had over 3.7 million cases in the Automated Underreporter Program, bringing in an extra $6.3 billion in tax revenue for the IRS.

Enforcement

  • In 2015 the IRS collected over $35 billion in past unpaid tax assessments. $14 billion of this was additional taxes for tax returns not filed on time. (Pro tip: even if you do not have the money to pay tax due, always file your tax returns on time to avoid the penalty for an unfiled tax return.)
  • Over a half a million tax liens were filed in 2015
  • Over 1.5 million levies (seizures of monies) were issued in 2015. This is an interesting ratio. The IRS must file a tax lien prior to a levy. This means the IRS levied the average lien three times! If you have a lien, you really should talk to a tax professional right away. The numbers are definitely not on your side regarding the likelihood of a levy (make that multiple levies).

2014 on left, 2015 on right. IRS Offer in Compromise, Lien and Levy data.

Tax Debt Forgiveness

The IRS accepted 27,000 Offers in Compromise, which is the name the IRS’s “pennies on the dollar” forgiveness program. The total amount the IRS forgave was $204 million, for an average of just $7555 per Offer in Compromise.

This is quite revealing because if you see or hear the commercials on TV or radio you would think the IRS settles for “pennies on the dollar” all the time. This is where so many tax relief companies do a bait and switch, saying you qualify when you absolutely do not.

The actual rate of IRS Offer in Compromise accepted compared to the number of people who filed a tax return was just 0.001% of tax returns filed for 2015! Many tax relief websites claim crazy large amounts of savings for clients and crazy high Offer in Compromise acceptance rates. It is worth repeating the reality that IRS makes a deal in 0.001% of tax returns.

You may as well just go buy a lottery ticket.