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Tuesday, April 13, 2004

These are Taxing Times--Or Not... 

It's tough to predict which pieces of horrible news (drops of water, blasting from a firehose) will cause a bit of scandal or unwanted attention for the White House. Doubt it will be this one, but why not?

Corporate Risk of a Tax Audit Is Still Shrinking, I.R.S. Data Show
By David Cay Johnston
New York Times, 12 April 2004

Since taking office, the Bush administration has repeatedly promised to get tough with tax cheats, saying it has ended a long slide in enforcement of tax laws.

But an independent analysis of new Internal Revenue Service data released today shows that tax enforcement has fallen steadily under President Bush, with fewer audits, fewer penalties, fewer prosecutions and virtually no effort to prosecute corporate tax crimes. The audit rate for the 11,200 largest corporations, which pay nearly all corporate income taxes, has fallen by almost half over the last decade, as has the audit rate for unincorporated businesses.

David Burnham, a director of the Syracuse University research organization that reviewed the government data, said that "President Bush and the I.R.S. commissioner have been running around talking about how they are going after corporate scofflaws, but the I.R.S. data suggest that the effort against corporate scofflaws is continuing to decline."

Today, the I.R.S. has about half the law enforcement resources for each tax return that it did in 1988, the Syracuse researchers said. The university's Transactional Records Access Clearinghouse will post the data at trac.syr.edu.

President Bush has maintained a hard-line stance on white-collar crime, which typically involves tax cheating. In September 2002, he said that his administration was sending "a clear message to every dishonest corporate leader: you will be exposed and you will be punished."

A few weeks ago, he said his administration had responded strongly to corporate crimes, saying "we're not going to tolerate dishonesty in the boardrooms of America."

The I.R.S. data reviewed at Syracuse showed that in the 15-month period that ended on Dec. 31, 2003, convictions had been obtained against six corporate officers in five cases in which the I.R.S. was the lead investigative agency. That was barely more than one-half of 1 percent of such cases, indicating that the law enforcement focus remains on individuals.

Separate data from the Justice Department show a long trend down in federal tax prosecutions. The department, citing United States court records, says that total federal tax prosecutions declined to 483 in 2003 from 1,431 in 1981....

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