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The Internal Revenue Service’s scrutiny of the largest U.S. companies has fallen dramatically since 2010, due to a combination of shrinking IRS budgets and a rise in the number of large corporations, according to a new report from Syracuse University researchers.
The largest American companies — those that reported more than $20 billion in assets— are classified as “corporate giants” by the IRS. In 2010, when the IRS first began using that classification, 96 percent of the country’s 447 corporate giants were audited. In 2017, the IRS only audited 54 percent the 616 companies that now qualify for the designation. Researchers blame this drop in audits on a nearly 40 percent increase in the number of giants, combined with a nearly 35 percent fall in the number of IRS agents scrutinizing them. As a result, the U.S. Treasury could be missing out on billions of dollars in tax revenue it is rightfully owed by corporate America every year.
“Audits, and the thoroughness of those audits, have really gone down,” Susan Long, the lead author of the report and the co-director of Syracuse University’s Transactional Records Access Clearinghouse (TRAC) project, told Newsweek. “The IRS is really stretched for resources. This is a long standing problem.”
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