The IRS Conspiracy Theories Don't Hold Up to Math
During last week's first-of-many hearing into the IRS scandal, one subplot emerged: Conservatives presented anecdotes to argue that the IRS didn't just target Tea Party groups seeking tax exempt status but a broader swath of conservative individuals and organizations. But the anecdotal evidence does not stand up to the data on tax audits.
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The stories at the hearing took a particular form. A member of Congress heard from a constituent that he'd been audited following activism against the president. The Wall Street Journal's Peggy Noonan used a representative example in a column:
The Journal's Kim Strassel reported an Idaho businessman named Frank VanderSloot, who'd donated more than a million dollars to groups supporting Mitt Romney. He found himself last June, for the first time in 30 years, the target of IRS auditors. His wife and his business were also soon audited. Hal Scherz, a Georgia physician, also came to the government's attention. He told ABC News: "It is odd that nothing changed on my tax return and I was never audited until I publicly criticized Obamacare."
Noonan mentions, in total, three people and organizations. While a transcript of the hearing isn't available, there were probably three more people mentioned by members of Congress. Meaning that we're presented with some six unusual, suspicious examples of conservatives being audited — out of the 1.5 million audited for the 2011 fiscal year.
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Given the confluence of statistics and politics, it was only natural that The Times' Nate Silver get involved, which he did on Friday afternoon. His argument: "a handful of anecdotal data points are not worth very much in a country of more than 300 million people." And then, to rub in a little salt, he mentioned Noonan's 2012 prediction that Romney would win, based on how many yard signs she was seeing.
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By comparing audit rates to turnout by economic group, Silver estimates that about 381,000 Romney supporters were audited for 2012. That estimate is (pardon the expression) conservative, focused as it is on the subset of taxpayers who are also voters. But Silver's broader point is apt: Romney supporters are probably slightly more likely to be audited, based on their income relative to the broader population.
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Using data from three sources — USA Today, a small business tax site, and Forbes — we put together an overview of who gets audited.
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The first thing worth noting is that audits on the whole have declined over the last few years. In 2010, 1.58 million individuals were audited. In 2012, 1.48 million.
Of those audited in 2011, the vast majority were people who earn less than $200,000 a year. Which makes sense — the vast majority of Americans make less than $200,000 a year.
But despite there being fewer total audits of millionaires, millionaires consistently get audited at a much higher percentage than others. Those who make under $200,000 actually get audited less than the average.
The rates at which millionaires get audited has increased consistently since 2004, with 2011 seeing a new high in terms of percent of millionaire returns audited and total number of audits. (And USA Today indicates that 2012 went up even more.) But note: There were still only 36,000 millionaires who received audits in 2011.
Those millionaires, Silver points out, voted for Romney by a 55 to 42 percent spread. Or, rather, people making over $250,000 annually voted at that rate — it's likely that the super wealthy supported Romney even more strongly. So if Obama somehow mandated audits for every Romney-leaning millionaire, and if each of the people noted by Noonan or during Friday's hearings were millionaires, and if the IRS somehow had a way of flagging every opponent of the president — we're still tens of thousands of examples short of a conspiracy. What we have instead is a number of suggestive anecdotes, the fertile birthplace of conspiracy theories.
Luckily for Obama, coincidence is not an impeachable offense. Not yet, anyway.
Photo: A millionaire Obama opponent who appears not to have been audited. (AP)
