IRS audits of larger companies have dropped sharply over the past few years and are now at an all time low, according to a report by Transactional Records Access Clearinghouse (TRAC), a legislative and regulatory watchdog.
Since 2005, the IRS has cut examination hours of corporations with at least $250 million in assets by a third. Audits for this segment have declined by 22 percent over the same time period, meaning 3 out of 4 of these firms were not audited by the IRS in a given year. Twenty years ago, 2 out of 3 of these companies would have been examined by the IRS.
"The decline in audits of large corporations is surprising because (1) the highest levels of misreported tax dollars per auditor hour are found among the biggest business organizations and (2) since FY 2005 Congress has provided the IRS with the funds it needs to hire an increasing number of revenue agents to handle these very complex returns," TRAC stated in release.