Scared of an IRS audit? Don't worry: Just become a large corporation

New Report Shows "Historic Collapse" in Audit Rates of Largest Corporations

A report released by Transactional Records Access Clearinghouse (TRAC) at Syracuse University highlights a disturbing trend in Internal Revenue Service (IRS) audit rates of large corporations. Audit rates for corporations with $250 million or more in assets (large corporations) are at a historic low at 26 percent. Analyzing IRS data — portions of which had to be obtained through Freedom of Information Act (FOIA) requests — TRAC also found that the decline in audit rates has been accompanied by declines in audit quality.

The new data released by TRAC underscore a disturbing trend in tax enforcement. The number of hours per audit spent on the largest corporations has declined 20 percent, while the numbers of both field audits and revenue agent hours spent on such audits have declined by 30 percent. That audit rates and audit quality have fallen is especially troubling given that audits of large firms return an average of $7,498 per hour. This is significantly higher than the next-highest dollar-per-hour audit rate, which is $1,559 for firms with assets between $100 million and $250 million.

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