(Bloomberg) — The Internal Revenue Service audited 0.57 percent of businesses in 2014, the lowest rate since 2005.
The tax agency, which is shrinking amid budget cuts, conducted 57,211 business audits in the fiscal year that ended Sept. 30 compared with 61,020 a year earlier, according to statistics released Monday. The 2005 rate was also 0.57 percent.
"As with individual audit rates, we continue to see steep declines in corporate examinations as the IRS budget has declined during the last five years," IRS Commissioner John Koskinen said in a statement.
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The IRS said last week that it audited 0.86 percent of individual taxpayers in fiscal year 2014, the lowest since 2004.
One of the steepest declines came in audits of large companies. In 2014, the IRS audited 26 percent of corporations with assets exceeding $250 million, down from 34 percent a year earlier.
The IRS has also been trying to shift audit resources to large partnerships that are examined less often than large corporations.
President Barack Obama is seeking an 18 percent budget increase for the IRS, to $12.9 billion. He probably won't get it from the Republican-controlled Congress. Republicans say the agency can be more efficient in deciding which taxpayers to audit and in avoiding spending money on the bonuses, conferences and internal videos that generated controversy over the past few years.
"We deliberately lowered the IRS funding to a level to make them think twice about what they are doing and why they are doing it," Representative Ander Crenshaw, the Florida Republican who oversees the agency's budget, said at a Feb. 25 hearing. "They don't have a dime to spare on anything frivolous or foolhardy or mediocre."
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