The Internal Revenue Service audits fewer than 1 percent of large business partnerships, according to a recent government report.
That means some of Wall Street’s largest hedge funds and private equity firms are largely escaping close scrutiny by the IRS, said Sen. Carl Levin, D-Mich.
The Government Accountability Office says the number of large businesses organized as partnerships has more than tripled since 2002, yet hardly any get audited. In 2012, only 0.8 percent were subjected to field exams in which agents do a thorough review of books and records.
The GAO defines large partnerships as those with more than 100 partners and more than $100 million in assets.
“Auditing less than 1% of large partnership tax returns means the IRS is failing to audit the big money,” said Levin, who chairs the Senate subcommittee on investigations….more