TRAC, the Transactional Records Access Clearinghouse, has posted Part 2 of its series on IRS audits--or lack thereof--of large financial-services corporations.
On Monday, TRAC (which filed Freedom of Information Act requests and then analyzes the data it receives) showed that the IRS devoted only 15 percent of its big company revenue agents to the financial-services companies, even though those companies filed 75 percent of the tax returns.
Today it shows that the IRS deliberately decided to soft pedal audits of financial services firms. "Only 15% of large financial services companies were audited in 2008 compared with 64% of all other large corporations," the TRAC report says. The audits of financial companies the IRS did perform "appear less thorough than those of other industries," it adds. It goes on to ask whether the lax treatment contributed to the massive fraud that powered the industry's profits: