Pace of IRS Corporate Audits Said to Be Slower

The pace of corporate audits by the Internal Revenue Service continued to decline in the first six months of fiscal 2004 despite IRS pledges to crack down on tax violators, an analysis of government data shows. The IRS said the findings were premature.

Syracuse University’s Transactional Records Access Clearinghouse, or TRAC, said Monday that the IRS carried out 7,794 corporate audits from October 2003 through March 2004, down 26% from the pace set in fiscal 2003. It said actual hours spent on examining corporate tax returns were running 30% below the 2003 rate.

IRS spokesman Terry Lemons questioned the findings, saying it was “wrong to make any kind of sweeping projections” based on the first six months of the year.

Many audits of large corporations are closed during the third and fourth quarters of the year, Lemons said. He predicted that the total audit rate would be up this year, “in stark contrast to what TRAC has.”