Academic journal article Journal of Accountancy

IRS Slipping on Enforcement

Academic journal article Journal of Accountancy

IRS Slipping on Enforcement

Article excerpt

Will more taxpayers cheat on their taxes as the threat of being audited by the IRS decreases? New data, which shows a steady decline in IRS enforcement activities, begs the question but offers no answers.

IRS statistics, published by Transactional Records Access Clearinghouse (TRAC) at Syracuse University, reveal that the face-to-face audit rate for individual taxpayers fell to less than half a percent (.46%) in 1998. In 1981 the audit rate was 1.59%, more than three times as high.

Corporate audit rates also decreased over the last several years. Companies that filed 1120 return forms had an almost 3-out-of-100 chance (2.90%) of being audited in 1992. In 1998 the likelihood the IRS would audit a company's tax return was even more of a long shot; it audited only 2 out: of every 100 (2.04%) corporate tax returns filed.

Prosecution of federal tax fraud has also fallen since the early 1980s. An examination of U.S. court records by TRAC indicated the number of federal tax prosecutions fell from 1,431 in 1981 to 766 in 1998. …

Search by... Author
Show... All Results Primary Sources Peer-reviewed

Oops!

An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.