WASHINGTON, April 14, 2008
IRS Auditing Fewer Big Companies
Top-Earning Companies Less Scrutinized, Focus Shifted To Small, Mid-Sized Businesses
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(AP / CBS)
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The Syracuse University-based Transactional Records Access Clearinghouse described what it said was a "historic collapse" in audits for corporations holding assets of $250 million or more. About 26 percent of them were audited in the 2007 budget year compared with 34 percent in 2006 and 43 percent in 2005.
The IRS did not dispute the numbers, based on agency data. But it strongly disagreed with suggestions it was easing oversight of the biggest corporations.
Enforcement revenues from large companies rose by one-third in 2007 from the previous year, from $10.6 billion to $14.2 billion, said IRS Deputy Commissioner Barry Shott, who heads the Large and Mid-Size Business Division.
While the number of examinations has declined, "what we are doing is focusing our resources better on where the noncompliance is," Shott said in an interview with The Associated Press.
Shott said the focus in recent years has been on tax shelters and `extraordinarily complicated" partnerships and S corporations where shareholders, rather than the company, must report income or losses. Last year the IRS examined 17,700 S corporations, compared with 14,000 the previous year, and 12,200 partnerships, compared with 9,800.
But the TRAC report concluded that the IRS also was concentrating on regular small and mid-sized companies to boost audit numbers.
"Moving the focus of the corporate auditors away from the large corporations and toward the smaller ones has been quite effective when it came to increasing the overall number of these kinds of audits but actually was counterproductive in financial terms," the researchers said.
The new IRS commissioner, Douglas Shulman, said in a response that he intends to make "targeting noncompliance with our tax laws ... a high priority."
According to IRS statistics, 15 percent, or 4,473, of companies with $10 million to $50 million in assets were examined in 2007. That compares with 12.3 percent, or 3,535 companies, that were audited in 2005.
In the same two years, the percentage of audits of corporations in the $50 million to $100 million range fell from 16.4 percent to 11.4 percent. For corporations in the $100 million to $250 million range, the percentage dropped from 17.5 percent to 12.1 percent .
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Mid-size business tax expert
Among the largest corporations above $250 million in assets, 3,424 were audited in 2007, down from a peak of 4,859 in 2005.In the IRS' zeal to show Congress improved numbers in corporate audit, it is America's small and medium businesses that are taking it on the chin.
Dean Zerbe,Mid-size business tax expert
TRAC also questioned the financial benefits of the shift. The group said that last year the government uncovered $682 in additional recommended taxes for every revenue agent hour spent auditing the smallest corporations, compared with $7,498 in additional taxes for audits of the largest corporations.
Dean Zerbe, national managing director for Houston-based alliantgroup, which provides tax services for medium-sized companies, said his fear was that "in the IRS' zeal to show Congress improved numbers in corporate audit, it is America's small and medium businesses that are taking it on the chin."
Shulman told the Senate Finance Committee last week that audits of businesses in general rose from 52,000 in 2006 to 59,500 in 2007.
He acknowledged that audits of the largest corporations were down. But he said that "in times of flat budgets, the agency cannot increase activity across the board, but must address the areas where there is growth and potential risk."
Shott also cited a new program where larger companies work with the IRS during the year so there will not be disputes at tax-filing season. Participants in this program rose from 17 in 2005 to 73 this budget year, he said.
The returns of these companies do not show up in enforcement statistics, he said, but the collaboration can avoid controversies that can go on for years.
Having more money was not necessarily an advantage for individual taxpayers. The IRS said that last year it audited 9.25 percent of those with incomes of more than $1 million, compared with 6.3 percent in 2006. For those earning less than $100,000, the chances of getting audited were less than 1 percent.
The tax agency said total enforcement revenues in the 2007 budget year, from collections and appeals activities, were $59.2 billion, up from $48.7 billion the previous year.
© MMVIII The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.
Best-selling author Mitch Albom on his first nonfiction work since "Tuesdays with Morrie."
This market is a false market cause the money is counterfit. Paul was right yet again the man blows me out the door. The MSM just talks about McCain Clinton, Obama.and there are better ones to pick from
Starting with Dr Paul. And we should keep in mind that the dollar isnt the only coinage around, there is the liberty doller. And so by using this gold and silver they cannot tell you what to do with your money
cause its international. free from tax. But we have a ways to go cause were all addicted to green backs and debt. Credit cards was a shame from the get go and we fell for them along with the risk. But all this risk was created on purpose long ago to keep you in there hands and look now all they have to do is sqeeze, And we will be tempted to beg them for food and housing.
So the solution is simple if you read Dr Pauls writtings. Because if you wake up after the blast your not going to want to be here.
For the people and by the people. Right? Right?
Better get some Preparation H folks. Big Business owns our goverment and they want us to be the ones to foot the bill for a 100 year War.
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Posted by apple2pie at 10:24 AM : Apr 14, 2008
Right On!! Couldn''t agree more!!!
ANYONE THAT TOOK OUT LOANS FROM 2000 TO 2007
REGARDLESS OF WHAT THERE CREDIT LOOKS LIKE RIGHT NOW, BECAUSE OF THIS MESS MOST HAVE LOST THEIR GOOD RATING.
THEY NEED TO COME OUT AND TELL ALL MORTGAGE COMPANYS
TO RE-FI EVERYONE NOW. NO EXCEPTION IF THEY HAVE A
MORTGAGE THAN TAKE 60% OFF THE BALLANCE AND RE-FI THEM AT 1 PERCENT OVER PRIME AND STOP ALL THE BLEEDING FOR ONCE..THAT IS ALL THAT HAS TO BE DONE, SIMPLE,FAST,AND IT WOULD STOP ALL FORCLOSEINGS,BURNINGS OF HOMES,AND STOP 10''''''''S OF MILLIONS FROM BEING ON THE STREET..
Corporte America commits income tax fraud on an unbelievable scale, but because Corporate America is "privileged", the IRS looks the other way.
Any wonder why the IRS is the most hated branch of government?
SIG HEIL, BUSH!!!!
sig heil, (more of the same) McCain!!!
Posted by liberalme at 10:11 AM : Apr 14, 2008
I absolutely agree that the big oil companies AND the military industrial complex should be audited.
No doubt about it.
"Transactional Records Access Clearinghouse described what it said was a "historic collapse" in audits for corporations holding assets of $250 million or more."
This all follows Bush Regime logic. Big companies, who can get away with millions of dollars here and there in shady right offs require minimal tax payer labor, meaning big payoffs for little expense. Spending more time on little businesses means, we have to spend more money, for more IRS agents, to get less of a return do to the thousands of dollars they might try to get away with.
I do believe they should do crash audits on specific groups, like one year dauditing 40% small businesses, the next year 40% large businesses, and mix it up with a little surprise like two years at 40% for big businesses, or none at all for maybe 3 or 4 years.
Taxes for the everyday Joe, they say, are the best lottery out there. You have a 98 in 100 chance of not getting audited, especially if you stay away from their red flags. The man power to find these couple hundred $$$ here and there on these people is easily not worth it.
Lets try Haliburton and Exxon for starters, I dare the IRS to conduct a through audit--how about Nike, a Vietnamese company that pays their "sweat shop" workers $59.00 a month--these companies profits are unimaginable, and the rest of us schmucks are paying the way for these corporations.--disgusting!
Of course they would disagree with suggestions that they were easing oversight. But we know the reason it is the neo cons and their buddies. It is coming neo cons talk big all you want but it is ending for you very soon.
- by slim1h2o April 14, 2008 10:03 AM EDT
- Top-Earning Companies Less Scrutinized, Focus Shifted To Small, Mid-Sized Businesses
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See all 20 CommentsNow,,there''s a shocker!,,,Not!