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Tuesday, April 9, 2013

TRAC: IRS to Reduce Audits of Big Businesses by 18%

TRAC-IRS The Transactional Records Access Clearinghouse at Syracuse University has released a report, IRS Audits Slump, Staff Down Long-term Impact Uncertain:

The IRS plans to expend 18% percent less effort auditing businesses with assets of $10 million or more compared with just two years ago, according to a very timely IRS planning document.  

For the same period, the IRS also projects a 14% drop in the amount of available time for the specialized revenue agents it needs to conduct these audits in FY 2013 — the year ending on September 30 — compared to what it was in FY 2011.  

These declines — neither of which take into account the probable impact of the sequestration cuts in the months ahead — were described in a special agency report now being made available to the Transactional Records Access Clearinghouse (TRAC) on a monthly basis. This series of internal IRS management reports — the last one covers the period ending in January 2013 — are provided by the IRS thanks to a court order granted TRAC as a result of a suit filed under the Freedom of Information Act.

IRS Large Business and International Division Direct Examination Staff Years

 
FY 2011
FY 2012
FY 2013
Change 2013 v. 2011
  Annual Plan
Total 3,567 3,320 2,935 -18%
Individual 189 173 306 62%
Corporations 1,103 1,043 807 -27%
Partnership 191 196 159 -17%
Subchapter S Corp 184 180 115 -37%
Coordinated Industry Cases 1,083 1,081 1,011 -7%
Other 816 647 537 -34%
  Actual Revenue Agent Years
Total 3,319 3,155 2,852 -14%
Individual 258 214 283 9%
Corporations 864 912 762 -12%
Partnership 211 215 179 -15%
Subchapter S Corp 185 225 205 11%
Coordinated Industry Cases 1,011 952 865 -14%
Other 790 637 559 -29%

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Comments

Corporate America's investment in the LB&I commissioner pays dividends.

Posted by: Jake | Apr 9, 2013 5:23:28 PM

Either that, or the IRS thinks as I do that they would see a much better ROI by auditing individuals and imo, partnerships. And a potential goldmine of auditing trust returns.

Posted by: the real anon | Apr 10, 2013 5:11:18 AM

I assume this is in large part because the IRS will now have to expend an enormous amount of resources to enforce the ACA tax.

Posted by: Ann in L.A. | Apr 10, 2013 5:54:41 AM

Further proof of the effects of "Starve the Beast." We have a government that is too small to do the job for a modern society of 310 million people. Smaller government is all the rage, when what we really need is a right-sized government.

Posted by: Publius Novus | Apr 10, 2013 6:32:11 AM

"Either that, or the IRS thinks as I do that they would see a much better ROI by auditing individuals and imo, partnerships."

Partnership FY2011: 191 FY 2012: 196 FY2013: 159 Change 2013 v 2011: -17%

So there's that...

Posted by: jason | Apr 10, 2013 7:33:11 AM

Hence why I said in my opinion. I'd say a large amount of partnership returns I've seen are wrong.

Posted by: the real anon | Apr 11, 2013 6:08:14 AM