The IRS seems to targeting medium-sized businesses for audits these days, this from a new report by the Transactional Records Access Clearinghouse (TRAC) as reported in Inc.com. Having been through one in our business many years ago, I will keep all of these entrepreneurs in my thoughts and prayers!
"(M)id-sized businesses, defined as those with assets between $10 million and $50 million, experienced a much higher degree of scrutiny, with 1,390 audits, up 40%."
Smaller businesses have not seen as many audits, but those they do see tend to be more thorough.
"Through the first six months of the fiscal year, the IRS audited 3,757 (small) businesses, down 45%. However, the time spent on each audit increased 17%."
Why are medium enterprises in the IRS cross-hairs these days? It seems that the IRS must be trying to meet some "performance" goals again. "The tax agency has said it expects 2004 collections to exceed $40 billion, a 10% increase over 2003."
Medium businesses are large enough to make collection efforts more efficient for the IRS and small enough to be an easier target to go after. "TRAC attributes the shift in attention away from the largest companies to mid-sized companies to the fact that they take less time and resources to perform."
What is the forecast for all of this? Well, if the IRS has its way, more fun for all of us.
"Meanwhile, the IRS has been fighting for additional resources. The Bush administration requested $4.6 billion this year in funding for IRS enforcement, compared to $4.2 billion in the 2004 budget."
What a colossal waste of time, energy and brainpower. The IRS code is so complex and ambiguous that it just begs for mischief and leads to too many honest mistakes. The fast-growing tax industry is a duplicitous partner in all of this, as well. It is time to pull the current system out by its roots and put in place a simpler, fairer approach that is does not become the vehicle for government meddling in our economy.
