WASHINGTON (AP) — A new government report says the Internal Revenue Service audits less than 1 percent of large partnerships, drawing criticism from Congress.
The Government Accountability Office says the number of large businesses organized as partnerships has more than tripled since 2002, yet hardly any get close scrutiny by the IRS. 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.
Democratic Sen. Carl Levin of Michigan said many of the largest hedge funds and private equity firms are escaping IRS scrutiny.
The report says the audit rate has been persistently low since at least 2007.