TRAC-Reports
IRS Turns Away From Auditing Big Business
(12 Apr 2010) A special new TRAC report -- based on data extracted from the IRS under the Freedom of Information Act -- shows that in the face of growing federal deficits the agency's audits of the nation's largest corporations have sharply dropped in the last few years. The decline in audits of large corporations is surprising because (1) the highest levels of misreported tax dollars per auditor hour are found among the biggest business organizations and (2) since FY 2005, Congress has provided the IRS with the funds it needs to hire an increasing number of revenue agents trained to handle these very complex returns. To read the report, go to
http://trac.syr.edu/tracirs/newfindings/current/
One key TRAC finding is that for corporations with assets of $250 million or more the IRS in the last five years has cut back on the number of audit hours by 33%. The decline in audit rates was startling. In FY 2005, the returns of 43 out of a hundred of these large businesses were audited. In FY 2009, the audit rate had dropped to 25 out of a hundred. A key outcome is that more and more of the largest corporations are not being audited at all.

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