|(09 Apr 2018)
The Internal Revenue Service (IRS) reports that nationally there are now 616 corporate giants. These are companies that reported $20 billion or more in assets.
As recently as FY 2010 virtually every (96%) corporate giant received an IRS audit. By FY 2016, this had fallen to only three out of four (76%). And last year, during FY 2017, the audit rate tumbled to a mere two out of every four - or roughly half (54%). This means that nearly half of these corporate behemoths escaped any IRS audit.
What are the revenue implications of allowing these 285 corporate giants to escape an audit? Some inkling of the magnitude of lost revenue to the federal coffers is suggested by the sizable amount of unreported taxes turned up in the 331 audits that were conducted of these largest firms. In total, these few hundred audits resulted in uncovering $10.4 billion in federal taxes that had not been reported. This amount was more than turned up in the combined 933,785 audits last year of tax returns filed by all individuals.
Congressional cutbacks to IRS's budget have severely trimmed the ranks of available IRS revenue agents. Fewer auditors mean that fewer audits can be conducted. New responsibilities for implementing the December 2017 tax reform act impose many new demands on the agency. Without adequate resources to meet already existing needs, IRS's efforts to meet these new demands can only exacerbate existing problems.
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