IRS keeps cut­ting back on au­dits of mil­lion­aires and big busi­nesses

Accounting Today - - Tax Practice -

Syra­cuse, N.Y. — The In­ter­nal Rev­enue Ser­vice is sub­ject­ing a rel­a­tively small per­cent­age of wealthy tax­pay­ers to tax au­dits, and less than half of the big­gest cor­po­ra­tions in the U.S. are now be­ing au­dited, ac­cord­ing to a new report. The report, from Syra­cuse University’s Trans­ac­tional Records Ac­cess Clear­ing­house, found that 97 out of ev­ery 100 in­di­vid­ual tax­pay­ers who re­ported over $1 mil­lion in in­come weren’t au­dited last year, based on IRS statis­tics. In fis­cal year 2010, such au­dits turned up $5.1 bil­lion in un­re­ported taxes. Now with just half the au­dits, the gov­ern­ment un­cov­ered only $1.9 bil­lion in un­re­ported taxes in fis­cal 2018. TRAC’s re­search also found that more than half of the 633 largest cor­po­ra­tions in the coun­try, those with over $20 bil­lion in as­sets, weren’t au­dited last year. This is the first year the au­dit rate has slipped below 50 per­cent, TRAC noted. As re­cently as 2010, 96 per­cent of such re­turns were be­ing ex­am­ined by the IRS.

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