IRS misdirects audit resources, study finds

The IRS yields $9,354 per auditor hour when examining larger firms, versus $1.025 at smaller firms, the group found. 

Since 2007, audits of firms with more than $5 billion in assets have have declined by 17 percent. Meanwhile, the number of revenue agents available to work these types of cases grew by 6 percent since 2005. 

“The findings that the IRS appears to have misdirected its workforce is underlined by the fact that while audit hours aimed at the largest entities were cut sharply, the hours the agency chose to focus on other [smaller] corporations increased,” TRAC stated. “For example, since 2005 the audit hours for small companies (less than $10 million in assets) jumped by 30 percent and the hours devoted to examining mid-sized companies (assets of $10 million to less than $250 million) increased by 13 percent.”

TRAC based its findings on information extracted from the IRS under the Freedom of Information Act.