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A stunning new analysis by the Transactional Records Access Clearinghouse (TRAC) at Syracuse University shows how the IRS targets smaller corporations, while larger corporations that would yield more unpaid tax dollars go unaudited.

Big corporations still get away with it. A stunning new analysis by the Transactional Records Access Clearinghouse (TRAC) at Syracuse University shows how the IRS targets smaller corporations, while larger corporations that would yield more unpaid tax dollars go unaudited.

It’s worth reading the whole thing, but I share some highlights:

  1. Among corporations with assets over $250 million, the IRS reduced the number of audits by 22 percent and the number of hours spent auditing by 33 percent between 2005 and 2009. In an era of high deficits and higher concern over corporate malfeasance, there are no excuses. Congress even increased the number of full time auditors available for such work by 6 percent.
  1. While the time spent auditing large corporations dropped a third, time spent auditing small and midsized corporations increased. Hours went up 30 percent for small and 13 percent for midsized tax audits.
  1. Unsurprisingly, audits of smaller corporations reveal less unpaid revenue for the work. Misreported tax dollars among the giants came to $9,354 per auditor hour, eight times higher than uncovered for the small and mid-size firms.

Like so many other things, the trend might be reversed by the Obama administration. But time is running out. Tax day presents yet another chance for the Obama team to show which side it’s on. This isn’t even about closing loopholes, just enforcing existing law. What are they waiting for?
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This piece originally appeared at the Campaign for America's Future.

Originally posted to Eric Lotke on Mon Apr 12, 2010 at 10:12 AM PDT.

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Comment Preferences

    •  Thanks nt (0+ / 0-)

      To paraphrase Warren Ballentine: "We may have come here in separate boats but we're in the same one now"

      by OHknighty on Mon Apr 12, 2010 at 10:14:52 AM PDT

      [ Parent ]

    •  Eric - I had the same initial thought (1+ / 0-)
      Recommended by:
      laker

      But as I read more about the issue it appears that the IRS is spending more time at the largest companies working with the internal tax staffs to resolve issues prior to the big companies actually filing their returns. Audits are only one measure of enforcement. In addition, all of the big company returns are reviewed. The story in the NYT also stated that the amount recovered per hour, per auditor, over the same time period rose from $6,900 to $9,700 so the IRS is doing something right. It certainly makes you think we should hire more auditors. We pay the average auditor less than $50 hour so that's a great return on investment.

      "let's talk about that"

      by VClib on Mon Apr 12, 2010 at 11:24:36 AM PDT

      [ Parent ]

  •  "Accountability is for peasants!" (1+ / 0-)
    Recommended by:
    laker

    This is just one more example of government being "owned" by the wealthy. The "non-enforcement" of laws which impact the wealthy and influential is most often the RULE rather than the exception. My friend was an auditor for the Army Corps of Engineers. His job was to audit the contracting Corporations who actually did the work. He routinely found flagrant padding of bills, but his supervisors would then "negotiate" the problem so as not to "hurt" the contractor. Typically, 20% of the fraud would be disallowed, the rest was paid in full by the taxpayers.  

  •  While your overall conclusions may be true.. (0+ / 0-)

    hours audited especially with large companies is not a good metric today as with automated auditing tools and records of large companies, there can be more efficient auditing with the same or less hours...

    One should look at the number of entities audited and the dollars per audit as a metric not the number of hours...

    You could have 1 person with a good automated auditing tool find more exceptions than a team of 10 people combing through manual records did 10 years ago...

    Obama - Change I still believe in

    by dvogel001 on Mon Apr 12, 2010 at 12:17:32 PM PDT

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