IRS Auditing of Big Corporations Plummets: Potential Annual Revenue Loss $15 Billion

Source: Syracuse University, Transactional Records Access Clearinghouse (TRAC), 2016

Very timely enforcement information obtained from the Internal Revenue Service show that total revenue agent audit hours aimed at larger corporations — those with $250 million or more in assets — dropped by more than one third (34%) from FY 2010 to FY 2015.

In the same period, the resulting additional taxes the agents uncovered that has been lost to the government dropped by almost two thirds (64%) — from $23.7 billion down to $8.5 billion — according to IRS data provided the Transactional Records Access Clearinghouse (TRAC) as result of several Freedom of Information Act (FOIA) lawsuits. See Figure 1.

Unless there has been a dramatic improvement in the way big corporations complied with complex requirements of the tax laws over the FY 2010 – 2015 period, this would mean that the potential loss to the government now amounts to at least $15 billion per year.