Over the past five years, the number of hours that Internal Revenue Service employees spend auditing corporations in which no extra tax was recommended has risen 40 percent, according to a new report by the Transactional Records Access Clearinghouse (TRAC).
Using records obtained through the Freedom of Information Act, TRAC has evaluated how much time the IRS spent auditing corporations in eight different brackets. Of those, the number of hours of auditing that bore no fruit increased the most in the highest category--those businesses pulling in $250 million or more a year, where "nonproductive" auditing hours rose 114 percent. It is these gargantuan businesses that tend to produce the most extra income for the Treasury.
"The forty percent (40%) increase in the number of corporate audit hours that bore no fruit is troubling primarily because the misdirection of the agency's enforcement resources ultimately could weaken the long-term interest of corporations in paying their taxes," the report states.
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