The IRS released its 2018 version of the IRS Data Book, which provides a snapshot of all activities conducted by the agency during the previous fiscal year. It covers activities that the IRS conducted between October 1, 2017, and September 30, 2018. It includes tax returns, appeals, exams, audits, levies, liens, and other tax-enforcement activities. The IRS generally releases its Data Book for the previous fiscal year in mid-May, providing additional insights into the agency’s activities over the previous months. Take a look at how the numbers have changed between 2017 and 2018.

Tax Liens Fall by 8%+

The total number of tax liens decreased in 2018 when compared to 2017.  The number in 2017 was 446,378, while just 410,220 were issued in 2018. This marks an 8.1% decrease between the fiscal years. Those totals represent the number of lien requests entered into the IRS automated system.

IRS Federal Tax Liens Filed 2017 vs. 2018

Enforcement Activity20172018% Change
Federal Tax Liens Filed446,378410,220-8.1%

Tax Levies & Seizures Rise

On the other hand, federal tax levies increased in 2018. The number of levy notices requested in 2017 was 590,249. In 2018, the number jumped to 639,025, representing an 8.3% increase. Tax levies reported in the 2018 IRS Data Book include all levies requested upon third parties by the Field Collection and Automated Collection System programs.

IRS Tax Levies & Seizures 2018 vs. 2017

Enforcement Activity20172018% Change
Notices of Levy Requested on 3rd Parties590,249639,0258.26%
Seizures323275-14.86%

The actual number of seizures conducted by the Field Collection program decreased. In 2017, 323 seizures occurred, while in 2018 the IRS only made 275 seizures.

Individual Returns Audited Slightly Decreases

The IRS audited nearly 900,000 Individual tax returns in the previous fiscal year. The represents a little more than half a percent of the total number filed for the 2017 calendar year. The number of tax returns audited in the fiscal year 2018 was lower than the number of returns audited in the fiscal year 2017. Of all individual income tax returns filed, the IRS audited approximately 0.55%. The number of audited income tax returns submitted by corporations was slightly higher at 0.9%. This number excludes S-corp returns. Nearly 75% of the audits were conducted via correspondence, while the remaining 24.8% were conducted in the field.

Federal Tax Audit Percentage 2017 vs. 2018 (Individual)

Fiscal Year
Returns FiledReturns Examined% Covered
2017149,919,416933,785.62%
2018150,043,227829,187.55%

Approximately 22,000 taxpayers didn’t agree with the determination made by the IRS examiner during an audit of their income tax return. However, nearly 30,000 of the audits resulted in additional refunds to taxpayers, which represented more than $6 billion in extra refund payments. The net revenue from delinquent collection activities increased to more than $40 billion, marking a 1.6% increase from the previous fiscal year.

Offer in Compromise Acceptance Rate Slightly Rises

During the fiscal year 2018, 59,000 taxpayers submitted offers in compromise. Again, an Offer in Compromise provides struggling taxpayers the ability to settle their existing tax debt for a lower amount than what they owe. Of those offers, the IRS accepted 24,000. This represents a 40.68% acceptance rate. The offers accepted resulted in the collection of $261.3 million throughout the fiscal year. In 2017, 62,000 offers in compromise were submitted to the IRS and 25,000 were accepted. This represents a slightly lower acceptance rate of 40.32%.

IRS Offer In Compromise Acceptance 2018 vs. 2017

Fiscal YearOffers Received Offers AcceptedAcceptance Rate
201762,00025,00040.32%
201859,00024,00040.68%

Although the IRS did report some major differences between the enforcement and activity rates in the fiscal year 2017 versus 2018, other areas remained fairly consistent. The number of audits increased only slightly, while the offer in compromise acceptance rate differed only minimally between the two years. It will be interesting to see how the numbers differ in the next fiscal year.

Sources: IRS Data Book 2017 & 2018