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WASHINGTON – According to a new study, if the IRS resources had been increased by less than half, the federal government could have raised $ 34.3 billion in taxes from its largest companies.
That's nearly 20% of the estimated gap between corporate tax payments and their liabilities between 2002 and 2014.
The Kaley School of Business's report from Indiana University is the first to quantify the amount of corporate income generated during the audit process lost for every dollar According to the school, the number of tax auditors has fallen by about a third since 2010. "The scope of the exams is significantly reduced," said Casey Schwab, Associate Professor of Accounting at the Business School. "The IRS still seems to be targeting the most aggressive positions, but it can not test so many positions within the return. They just do not have the resources.
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Researchers examined the confidential IRS audit data of major listed companies for tax filing from 2000 to 2010. They estimated that the government could have raised $ 34.3 billion in additional taxes from these submissions if they had had additional resources of $ 13.7 billion.
And this estimate The loss of revenue may be only a fraction of the amount that would have resulted had the study included audit data from other companies, individuals and foreign taxpayers.
Changes in IRS funding, however, are likely to affect companies' audit rate
and researchers wanted to see how the IRS used its reduced resources to conduct audits.
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They concluded that the IRS with decreasing resources less potential disagreements determines and jeopardizes lower tax savings.
However, the IRS levies a larger share of the unpaid taxes that it questions. This could mean that auditors with fewer resources focus on the inconsistencies that are more difficult for taxpayers to defend.
"The findings suggest that they focus on the weakest positions and those that they believe can achieve them most for the purse throughout the collection," said Bridget Stomberg, a professor of accounting the Kelley School of Business.
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The IRS's budget has been targeted in recent years for a variety of reasons. Some proponents of the cuts argue that they force the IRS to become more efficient and focus on the core tasks. However, some critics of the cuts claim that they are a politically motivated response to measures such as the revision of the Conservative Group's request for tax exemption by the IRS.
The authors of the report said that the IRS is more efficient than the tax recovery authorities of Other developed countries spend on average less administrative cost of revenue.
Nevertheless, the Tax Policy Center estimates that the federal government did not incur corporate taxes of $ 41 billion between 2008 and 2010.
If companies pay less taxes, Schwab said what could possibly spur the economy.
"On the other hand," he said, "there is an idea that everyone should pay their fair share."
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