Wednesday, April 14, 2010
If the nation’s largest corporations were inclined to fudge their tax returns, they would face pretty good odds (about 3-to-1) of getting away with it, since the IRS is now spending less time auditing such businesses. Syracuse University’s Transactional Records Access Clearinghouse has found the IRS has cut back noticeably (33%) over the past five years on audits of corporations with assets of $250 million or more.
Whereas tax auditors went through 72% of large businesses’ returns in 1990 and 43% as recently as 2005, they only examined 25% in 2009. This means that currently 75% of large corporations are not getting audited—“even though the highest levels of misreported tax dollars per auditor hour are found among the biggest business organizations,” writes WebCPA.
But while big business is escaping closer scrutiny, small companies are enduring more audits. The IRS is spending more time (34%) compared to 2005 going over the returns of small businesses (less than $5 million in assets).
-Noel Brinkerhoff
Is the IRS Really Increasing Audits of the Wealthy? (by David Wallechinsky and Tyler Schenk-Wasson, AllGov)
IRS Audit Rate for Millionaires Plunges (by Noel Brinkerhoff, AllGov)
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