IRS auditing only half of giant corporations
The Internal Revenue Service audited only about half of the companies that it defines as “corporate giants” last fiscal year, compared to nearly all of them back in 2010, according to a new study.
A new report from Syracuse University’s Transactional Records Access Clearinghouse, or TRAC, found that in fiscal year 2017, the IRS audited only 54 percent of corporate giants -- that is, companies with $20 billion or more in assets -- compared to 76 percent in fiscal year 2016 and 96 percent in fiscal year 2010. That amounted to audits of 331 of the corporate giants in 2017, compared to 415 in fiscal 2016 and 431 in fiscal 2010. While the number of audits has dropped, the number of corporate giants available to be audited has grown even more, from 447 in 2010 to 616 in 2017.
The 331 audits that were conducted of the corporate giants last year uncovered $10.4 billion in federal taxes that had not been previously reported. That amount exceeded the amount uncovered by the combined 933,785 audits conducted last year of tax returns filed by all individuals.
The reduction in audits is largely due to budget cuts at the IRS, which have severely reduced the number of available IRS revenue agents who could audit both corporations and individuals. TRAC pointed out the IRS’s new responsibilities for implementing the new tax law will also 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,” said the report.