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Brillyant comments on Open thread, Oct. 03 - Oct. 09, 2016 - Less Wrong
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Why doesn't the U.S. government hire more tax auditors? If every hired auditor can either uncover or deter (threat of chance of audit) tax evasion, it would pay for itself, create jobs, increase revenue, punish those who cheat. Estimated cost of tax evasion per year to the Federal gov is 450B.
Incompetent government tropes include agencies that hire too many people and becoming inappropriate profit centers. It would seem that the IRS should have at the very least been accidentally competent in this regard.
I think that in many cases uncovering a potential tax evasion might not be enough to get that money, it might require prosecution and large scale evidence collection. Maybe it's not worth it unless amount of evaded taxes is large?
Generally the numbers suggest that an additional tax collector brings in a lot more money than he costs.