Study Shows IRS Stepping Up Small Business Audits

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A study from Syracuse University’s Transactional Records Access Clearinghouse reveals that in the last five years, the number of hours the IRS spends auditing small businesses has increased by 30%.  Small businesses are defined in the study as those businesses with assets of $10 million or less.  In the same time period, the study shows that the IRS has dropped audits of businesses with assets of $250 million or more, by 33%.

The report points out: “The decline in audits of large corporations is surprising because (1) the highest levels of misreported tax dollars per auditor hour are found among the biggest business organizations and (2) since FY 2005, Congress has provided the IRS with the funds it needs to hire an increasing number of revenue agents trained to handle these very complex returns.”

A full copy of the report can be found here.

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