Highly Profitable Tax Auditors

While this story originates in the United States, it is just as applicable here, in Canada.

Reuters’ David Cay Johnston noted today that IRS auditors “assigned to the 14,000 or so largest corporations found $9,354 of additional tax owed for every hour spent testing tax returns in the 2009 fiscal year.” [bold italics are mine]

A few things to note.

These were the largest corporations.  It’s hard to say how this number might be affected  by choosing smaller companies.  My guess is that the smaller companies would have lesser amounts of additional tax found by the auditors, but if we’re talking about restaurants, this would be offset by higher amounts of tax evasion identified by the auditors.  In short, it’s probably a  reasonable estimate of taxes recoverable from restaurants in Canada.

Undoubtedly, this is the reason why the Canada Revenue Agency went out and hired 5,000 new tax auditors!

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