Put the IRS to work with Mandatory Audits

Discussion in 'Economics' started by PocketChange, Jun 13, 2010.

  1. Excerpts from: http://trac.syr.edu/tracirs/newfindings/current/

    74% of corporations reporting assets > $250M are not audited.
    The IRS since FY 2005 has cut back by a third (33 percent) the hours it spends examining their books.

    This has occurred even though IRS auditors uncover the largest dollar amounts of tax under-reporting in the books of these large corporations. On an hour-by-hour basis, IRS audits of all corporations show that 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.

    The number of the largest companies that are escaping any IRS examination at all has ballooned — up 74 percent since FY 2005. In concrete terms, this means that three out of four corporate returns reporting assets of $250 million or more last year were not audited by the IRS.

    In sheer numbers, IRS audits of large corporations fell from 4,693 in FY 2005 to only 3,675 in FY 2009.

    Even among the biggest of the big corporations — those with assets of $5 billion or more the audit rate has declined 17 percent over the last two years, from 78 per 100 returns filed in 2007 to only 64 per 100 returns during FY 2009.

    The dramatic collapse in the auditing of those corporations with assets of $250 million or more has occurred during a period of increasing national concerns about growing federal deficits, growing public distrust of big business and intense worry about the extent of white collar crime personified by executives like the investment adviser, Bernard Madoff.

    The IRS has over 13,000 revenue agents.

    Tax collection statistics

    Summary of Fiscal Year 2007
    Type of Return Number of Returns Gross Collections
    to the nearest million US$
    Individual Income Tax 138,893,908 1,366,241,000,000
    Employment Taxes 30,740,592 849,733,000,000
    Corporate Income Tax 2,507,728 395,536,000,000
    Excise Taxes 989,165 53,050,000,000
    Estate Tax 55,924 24,558,000,000
    Gift Tax 286,522 2,420,000,000

    Total 173,351,839 2,691,538,000,000

    In 2009 there were 14,683 tax returns filed by large corporations with assets in excess of $250M. 11,008 were not audited... 75% of these "Too large to fail or audit" corporations are on the honor system.

    According to the IRS we only have 2.5M tax paying corporations paying less than 400B in taxes... How can we justify a 700B bailout?

    The IRS should be required to conduct a mandatory audit of all Individuals and Corporations with assets in excess of $10M.
  2. Bob111


    they are busy... auditing and penalizing average joe the plumber returns..
  3. BSAM


  4. Yep... and creative accounting and fraud are rampant.
    According to the IRS our corporations pay only an average of $157K.

  5. Solution:
    Don't tax corporations.