TaxProf Blog

Editor: Paul L. Caron, Dean
Pepperdine University School of Law

Saturday, March 9, 2019

Millionaires And Corporate Giants Escaped IRS Audits In FY 2018

The Transactional Records Access Clearinghouse at Syracuse University has released Millionaires and Corporate Giants Escaped IRS Audits in FY 2018:

The latest data reveal that 97 out of every 100 taxpayers reporting over a million dollars of income were not audited last year. And for these millionaires the puny number of IRS audits has been cut in half since 2010.

TRAC 1

More than half of the 633 largest corporations in the country - those with over $20 billion in assets - were not even audited last year. This is the first year that the audit rate has slipped below 50 percent. As recently as 2010, nearly all such returns (96%) were being examined by IRS.

TRAC 2

For years, Congress has imposed severe funding and staffing cuts on the agency. Then, in December of 2017, Congress enacted sweeping changes to the tax laws through passage of the Tax Cuts and Jobs Act (TCJA) which imposed many new demands on the IRS. Without adequate resources to meet its tax administration and enforcement needs, IRS's efforts to meet these new demands only exacerbated existing problems.

Back in June of 2010 IRS had just over 100,000 employees on the payroll. By June 2018, staffing had fallen by 22 percent to just 79,071[3]. And despite the additional responsibilities IRS was assigned to implement the 2017 tax changes, IRS had 3,000 fewer employees than it had in June 2017 before this act was passed. See Table 1.

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