IRS Is ‘Outgunned’ in Audits of Major Companies, Agency Chief Says
, Bloomberg News
(Bloomberg) -- The IRS is outmatched in resources and expertise when it audits some of the largest companies in the country, the agency’s top official said.
“We do not have the resources to go after the bigs or the superbigs, as we refer to them, and we get outgunned routinely in that space,” IRS Commissioner Chuck Rettig told House Ways and Means Committee members on Thursday.
The Internal Revenue Service, which is in charge of implementing and enforcing the nation’s tax laws, has struggled for years to keep pace with increasingly complicated business structures created by teams of corporate lawyers and accountants. The IRS has also faced a series of budget cuts and a wave of retirements as older employees leave the workforce.
Rettig said this mismatch between corporations and the IRS means that lawmakers should consult with the agency when creating new tax policies -- to get input on the feasibility and enforceability of those ideas.
President Joe Biden has proposed giving the IRS an additional $80 billion over the next decade to overhaul the agency’s audit and enforcement teams so the agency can more effectively move against tax cheats. That funding is part of his roughly $2 trillion Build Back Better proposal that is stalled in the Senate, and it’s unclear if or when that funding could become law.
About 0.3% of corporate tax returns filed in 2018 were audited, according to the IRS’s most recent annual data book. That’s compared with a 1.4% audit rate in 2010, according to IRS data.
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