Small Businesses Hit Harder by Audits

Although tax day has come and gone, small businesses increasingly may face a follow-up by Uncle Sam, according to a new report by the Transactional Records Access Clearinghouse at Syracuse University.

Since 2005, the IRS has cut back the number of hours spent auditing large corporations with more than $250 million in assets by 33 percent, the report shows. However, that figure jumped 30 percent among small companies with fewer than $10 million in assets, reported AOL Small Business.

The study contends a "perverse quota system" may be driving the trend, causing agents to pursue audits among smaller companies with fewer assets, which typically take less time. "These quota pressures may well influence revenue agents and their managers when making their decisions about which business will be audited and which will not," the study said.