I assume too, a lot are like the mail I got from Revenue Canada - I simply forgot to include a specific form for an investment account so pretty simple - the computer spits out a notice, they ask me for more money ($C162). Presumably the same with the IRS. Counts as an audit, no doubt, but there is no dispute about it. There are probably a dozen like this for every millionaire pushing the limits of deductibles.
Problem solved, I changed options so the bank sends me a paper form, I won’t have to look through online notices in the bank app for the tax form. (the default) I won’t forget it next year.
As I understand, this relates to capital gains vs. earned income. Funny thing, if you make money by selling things that have appreciated in value like stocks, you pay about 1/4 as tax on appreciation. Guess how the major political donors make a lot of their money? OTOH if the company hands you $40B in stock options (as happened to Elon Musk with Tesla last year) then that’s income, and you pay earned income tax rate (making Musk pretty much the largest ever taxpayer in a single year, about $20B.) Although, to be fair, when your dilemma is what to do about $40B in earned income this year, does it really matter if the government gets half?