The Washington Post reports that:

"Only 0.73 percent of business tax returns were audited in the fiscal year that ended Sept. 30, down from 0.88 percent in the previous year, TRAC found. In 1997, 2.62 percent of business tax filers could expect to be audited.

"There was also a dramatic slide for corporations with assets of at least $250 million. Among those, audit rates slid to 28.98 percent last year from 33.68 percent in 2002. In 1995, more than half of such companies were audited.

"From 1999 to 2003, the number of civil negligence penalties aimed at corporations fell to 12 from 62. Civil fraud penalties dropped to 170 last year from 247 in 1999. Tax prosecutions fell last year to 538, from 563 in 2002. Ten years ago, the IRS and Justice Department prosecuted more than 1,000 cases.

The New York Times also covered the report:

"The severe drop in audits of corporations raises questions about corporate income tax receipts, which have fallen to historically low levels when counted as a portion of the economy. In 2003, the receipts were a little more than 1 percent of the economy. From 1996 through 2000, no corporate taxes were paid by 60 percent of large corporations, according to a report two weeks ago by the General Accounting Office.

It is sad that the trend began at the end of the clinton administration. Although that might be due to a Republican congress cutting funds for IRS audits.

Also, I saw the 14% increase in audits on private citizens last year.