The fiscal year 2007 audit rate for the nation's largest corporations has plunged to its lowest level in the past two decades, according to a new report.

The audit rate is now less than half what it was in fiscal 1988, according to data from the Internal Revenue Service analyzed by Syracuse University's Transactional Records Access Clearinghouse. TRAC found that the rate of audits for corporations with $250 million or more in assets dropped dramatically in the past few years, from 43 percent in fiscal year 2005 to 34 percent in fiscal year 2006, hitting an all-time low of 26 percent in fiscal year 2007.

Not only is the number of audits declining, but the thoroughness is dropping as well. The typical amount of time auditors spend on large corporate audits is down by 20 percent over the last five years.

The IRS has cut back on Coordinated Industry Case audits, in-depth examinations the agency reserves for the largest corporations. Over the last five years, the number of CIC cases has dropped by 33 percent, from 528 to 353.

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