Tax audits of corporations are increasing across the country at both the federal and state levels, according to a new survey by KPMG.

With all the recent publicity about major corporations that have managed to avoid paying federal income taxes, that’s probably no surprise (see 30 Major Corporations Avoided Federal Income Taxes).

The majority of the 890 corporate tax executives surveyed said federal and state tax audits increased in the past 12 months, and the majority of them also believe audit activity will increase over the next year too.

Nearly two-thirds of those polled said federal tax dispute activity had increased in the past 12 months, while more than one-third said the total number of state tax audits in jurisdictions in which they do business has also increased.

KPMG is warning companies of all sizes to be prepared for a potential tax audit in advance of receiving an audit notification. That’s probably good advice, especially as the IRS has been looking to tools like its expanded CAP program to encourage greater corporate tax compliance.