Pros and Cons of an IRS Auditing Career
An IRS auditor assists in the essential process of government revenue collection. Read the following tables for more pros and cons of this career.
| Pros of Being an IRS Auditor |
|---|
| Good salary (the median annual wage was about $51,000 as of May 2014)* |
| A bachelor's degree is usually the only education requirement* |
| Good career for people who like working with numbers* |
| Telecommuting is possible for some positions** |
| Cons of Being an IRS Auditor |
|---|
| Overtime may be needed during tax season* |
| Communicating with the public about tax discrepancies may involve conflict* |
| Tax code and laws may be complex* |
| Slower-than-average employment growth (6% decrease predicted between 2014 and 2024)* |
Source: *U.S. Bureau of Labor Statistics, **Multiple job postings (April 2012)
Essential Career Information
Job Description and Duties
As an IRS auditor, you work for the federal government and ensure that all revenue owed to the U.S. Department of Treasury is collected. You review tax returns and make sure that all deductions are legal. If more documentation is needed, you contact taxpayers by phone or mail. In some cases, you travel to a taxpayer's home or place of work to make sure all information reported is true. If a taxpayer has overpayed or underpayed, you issue a refund or collect what is owed. For each case you deal with, you need to keep accurate records.
An IRS auditor can work in different specialties that have similar job duties and educational requirements but are different in approach. You could work as a tax examiner, revenue agent or tax collector. A tax examiner reviews simple tax returns, which are usually from individuals and small businesses. In this position, you make sure all deductions claimed are lawful, and you collect dues as needed. A revenue agent is similar to a tax examiner, but in this position you examine more complicated tax returns, such as those submitted by large businesses and corporations. A collector is responsible for collecting overdue payments and settling debts. As a collector, you have the authority to take part of a taxpayer's working wages if he or she cannot pay what is owed.
Job Salary and Prospects
According to the U.S. Bureau of Labor Statistics (BLS) the median salary for tax examiners, collectors and revenue agents was about $50,610 as of May 2013. The bottom ten percent of these professionals earned a salary of roughly $30,700 or less, while the top ten percent earned $92,750 or more. Specific figures for IRS employment are not explicitly given. The BLS projected that employment of tax examiners, tax collectors and revenue agents would decrease by 6% between 2014 and 2024, which is much slower than the national average for all occupations.
Career Requirements
Education and Training Requirements
The BLS states that tax examiners, collectors and revenue agents usually need a bachelor's degree in accounting or a related area, such as business administration or economics, in order to work for the IRS. There are some exceptions, though. If you don't have a bachelor's degree, you may obtain employment as a tax examiner if you have at least one year of work experience in accounting, tax analysis or bookkeeping. Aspiring revenue agents who don't have a bachelor's degree need to complete at least some accounting coursework in addition to gaining relevant experience. To work as a collector for the IRS, a bachelor's degree is a must, and you can't substitute experience for a degree.
After being hired, you may need to complete up to two years of on-the-job training. Continuing education may be required throughout your career; up-to-date knowledge of tax codes, laws, collection methods and enforcement procedures is essential in this field.
What Do Employers Look For?
Depending on your specialization, some IRS auditing jobs require knowledge of international trade. This is because many U.S. businesses are international, and the IRS needs auditors to consider what actions, investments, properties and revenue are taxable from these international businesses. The following real job postings are examples of what was available as of April 2012:
- The IRS seeks general tax examiners across nationwide locations to work in the Large Business and International (LB&I) division. The position requires analyzing tax returns and accounting materials. New hires must undergo classroom and on-the-job training, which could last up to two years depending on the specialty area. A bachelor's degree in accounting or an equivalent combination of education and experience is required.
- The IRS needs an international tax examiner to handle various international tax issues for the LB&I division. Responsibilities may involve foreign tax credits, tax treaties and international mergers. Ongoing training is necessary to keep up with changes in the global economy and international tax laws. A bachelor's degree in accounting or an equivalent combination of education and experience is required, as is a period of on-the-job training.
- The IRS needs a tax law specialist to interpret and apply tax laws. The position requires conducting research and analyzing different cases. The job candidate needs to have previous legal or tax accounting experience that required knowledge of tax laws.
How to Beat the Competition
Auditors communicate regularly with citizens and businesses. Developing your interpersonal skills by taking speech and communications courses could help you stand out from the crowd. Strong customer service skills, whether you're an examiner or collector, are also helpful in obtaining the information needed from taxpayers. Being able to resolve issues diplomatically could make taxpayers more cooperative and may help bolster your status in your department.
Other Careers to Consider
Accountants and Auditors
If you like the idea of working as an IRS auditor but don't want to work for the federal government, you can become an accountant or auditor. Accountants and auditors work for private clients, such as businesses and individuals, and prepare all of their financial records. In these positions, you calculate taxes owed and prepare tax returns. Education requirements are similar to those required of IRS auditors - a bachelor's degree in accounting is often necessary. Accountants and auditors may see employment growth of 16% over the 2010-2020 decade, according to the BLS. These professionals earned an annual median salary of around $63,000 as of May 2011.
Personal Financial Advisors
If you want to give people advice regarding finances and taxes rather than examine tax returns and enforce tax laws, consider becoming a personal financial advisor. In this position, you meet with clients and determine their financial goals. You also provide advice concerning financial investments, like stocks, bonds, insurance, college funds and pension plans. Again, a bachelor's degree is usually required to get started. Licensure may be necessary if you sell stocks, bonds, insurance or investment advice. The BLS stated that personal financial advisors may see 32% growth in employment between 2010 and 2020. The median annual salary for personal financial advisors was $67,000 as of May 2011.
