Because of a successive round of budget cuts the number of IRS audits of business tax returns has declined in recent years. “Syracuse University’s Transactional Records Access Clearinghouse, or TRAC, analyzed the IRS’s records from fiscal year 2010 through fiscal year 2015 and found revenue agent hours aimed at corporations with $250 million or more in assets have declined 34 percent, while unreported taxes uncovered by IRS that would otherwise have been lost to the government dropped 64 percent.” This drop in the number of audits will potentially lead to a loss in revenue for the government. Congress has recently earmarked more money to the IRS to improve customer service, combat identity theft, and improve cybersecurity. It has not earmarked much money to the IRS for auditing tax payers.
See Michael Cohn, IRS Business Audits Plummet Due To Budget Cuts, Accounting Today, March 16, 2016.
