Tax Administration:

Audit Trends and Taxes Assessed on Large Corporations

GGD-96-6: Published: Oct 13, 1995. Publicly Released: Oct 13, 1995.

Additional Materials:


Office of Public Affairs
(202) 512-4800

GAO reviewed the results of the Internal Revenue Service's (IRS) efforts to audit the tax returns of about 45,000 large corporations, focusing on: (1) audit trends for fiscal years 1988 through 1994; (2) the portion of taxes recommended by agents that were eventually assessed; and (3) the profiles of audited large corporations compared with those of nonaudited corporations.

GAO found that: (1) for every dollar invested in large corporation audits, IRS ultimately assessed $15 in additional taxes for the years 1988 through 1994; (2) IRS invested more hours in directly auditing large corporations but recommended less additional tax per hour invested in 1994 compared to 1988; (3) in 1994, large corporations appealed 66 percent of the additional taxes that IRS recommended in its audits; (4) between 1988 and 1994, IRS assessed 27 percent of the recommended additional taxes either after agreement or resolution in appeals; (5) IRS believed that the assessment rate was not an accurate measure of audit effectiveness, since various factors outside the audit could lower the rate; (6) the assessment rates ranged from 20 to 38 percent for four asset classes and from 0 to 103 percent by IRS district, but the reasons for the disparities were unclear; (7) the rates for audits closing without any adjustments has rapidly increased, raising questions about how IRS selects returns for audits; and (8) audited corporations tended to report higher average incomes, tax liabilities, and other tax amounts than nonaudited corporations.

Jul 18, 2018

Jul 17, 2018

Jul 16, 2018

Jun 28, 2018

May 31, 2018

May 24, 2018

May 10, 2018

Apr 17, 2018

Apr 5, 2018

Looking for more? Browse all our products here