In a recent report it has been revealed that IRS corporate auditors find an average of $9,354 in unpaid taxes owed by companies every hour they spent examining their tax returns. These are generally owed by the 14,000 or so of the largest companies in the United States in the 2009 fiscal year who pay about 86% of corporate income taxes.
But here’s the kicker – these corporate auditors may be axed soon, not because they have not been performing but simply because Congress has reduced the IRS annual revenue by about 5% this year.
Without these corporate auditors, how can the unpaid taxes be recovered? If the cost of keeping these corporate auditors on the IRS payroll exceeds the amount of taxes they could recoup, then the action by Congress can be considered sensible. But an IRS auditor makes at most $71 an hour. Based on a 2,080-hour work year, it would mean a loss of about $19 million in annual revenue for every senior corporate auditor axed by the IRS. So does it make sense to reduce the IRS budget?
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