Sure it's easier, but it seems like the return on investment must be lousy. Is it really easier to audit 1 million people who end up owing an average of $100, or 10 people who end up owing $20 million?

Depends on the fee structure.

If those poor people end up owing $100, but the IRS can slap $500 of wrongful filing fees on them, and then come up with a 15 year payment plan at 30% interest, they get $25k.

Rich people would just pay the fine and move on, or claim bankruptcy and become rich again in a few years.

Can a private (or corporate) entity take the IRS to court?

As a non-American, I always assumed a big reason of why the rich aren't taxed/audited as much was because tying the funds up in infinite legality was cheaper than actually paying taxes.

The IRS cannot charge a 30% interest rate. They charge short term plus 300bps. There's some other fees, but they cap out too.

The difficulty of auditing someone is totally dependent on the complexity of their tax return. If someone just adds up the numbers wrong and pays the wrong amount of tax, how hard is that to catch? Whereas if someone reports thousands of different stock transactions over a five-year period, and those don’t quite add up, that could easily be a more expensive audit than a thousand automated ones.

I would bet that it's much easier to predict costs in both time and money for auditing a poorer person than a wealthier one.

Is this the "run the government like a business" I keep hearing so much good stuff about?

You can just as easily file this one under "every organization has finite resources to allocate".

As long as they're all legitimate audits, that seems like a reasonable way to prioritize work. I too tackle the lower-hanging fruit first when I begin a task. If this is the methodology that generates the most revenue, then it is generating the most potential benefit to those who rely on government services -- largely, those drawing SS/Medicare/Medicaid/SNAP/EITC.

This report is based upon data from during the Obama administration only.

"Audit rates were calculated per 1,000 income tax filings, over the four tax years from 2012 to 2015."

also more likely to be breaking the law