IRS audits of big corporations drop to 20-year low

It's difficult to know where to begin in responding to this item. While taxpayers fret over whether they can take a deduction for their home office, fearing that such a move could trigger an audit, the IRS has quietly all but stopped bothering with corporate tax returns.

The Wall Street Journalreports (subscription required) on a new study showing that IRS audits of companies with $250 million or more in assets have dropped to a 20-year low. But don't worry. The Journal is making up for it by auditing smaller companies at record rates: "The drop in audits of such large corporations comes as the audit rate for smaller businesses is sharply increasing. The increase in audits of smaller businesses means that, overall, corporate audits are on the rise."

For a look at the implications of this madness, check out this great piece from Gary Weiss. 39% of large companies paid no corporate income taxes between 1996 and 2000.

I wonder what percentage of elementary school teachers paid no taxes between 1996 and 2000.