Industry-by-Industry Corporate Audit Rates:
- Audit rate for large corporations varies markedly by industry
Financial services
Communications, technology, and media
Retailers, food, pharmaceutical and healthcare
Natural resources and construction
Heavy manufacturing and transportation
Large corporations are few in number but control most business assets
Financial services ranks 2nd on total receipts among large corporations
Financial services ranks 1st on net income among large corporations
Industries with more companies experience fewer audits
- Audits of businesses continue their downward slide
Audits of corporations drop overall
Audits of largest corporations up in 2004 but audit scope unclear
IRS efforts to go after "pass-through" entities plummet
Little IRS attention to corporate negligence and fraud
- Correspondence audits boosts audit rates for individual over business returns
Business receipts dwarf income of individuals
Corporate share of federal income tax collections declining
- IRS tax prosecutions finally turn up after a long decline
IRS plays small role in criminal prosecution of corporate fraud
IRS prosecutions of tax, money laundering, monetary and drug offenses
Number of IRS criminal investigators do not explain trends
- Audits of individuals -- trends differ for regular vs. correspondence audits
Audit trends for high income individuals
IRS results in document matching and in finding math errors on returns
Levies, liens and seizure activity resuming
Details on audit rates by examination classes (includes correspondence audits)
Details on audit rates by examination classes (excludes correspondence audits)
- Long term declines in number of IRS staff by position
Fewer revenue agents available to audit complex returns
