Recently I was speaking to a former IRS agent who had been employed in the IRS Office in Albany, New York for seven years about forty years ago. He told me that the IRS treated large multinational corporations differently than small companies and individuals, and justified his assertion with the following anecdote.
A staff of fifteen IRS agents, assistant agents, and supervisors were assigned to audit the tax returns of this one particular multinational corporation, requiring three years of work on the part of the agents. After the agents audited three years of the corporation's tax returns, entailing three years of time, often a majority of the agents would be reassigned for an additional three years to audit the following three years of tax returns of the corporation, in total resulting in six years of work in one location for the agents. Then the agents who had been assigned to this one corporation for six years would be assigned to another large corporation and location, with other agents brought in to replace them at this client for the next three-year audit term. In essence, this multinational corporation was continually being audited by the IRS.
The former IRS agent told me that while auditing one of the year's tax returns of this particular corporation, the team of agents had found an additional two hundred million of taxable income and reported such to the corporation's tax director. Upon hearing their report, the corporation's tax director called the District Commissioner of the Albany IRS Office and informed him that unless he removed the requirement to recognize the additional $200 million of taxable income, that the corporation would move its corporate headquarters to Greenich, Connecticut.
According to the IRS agent who had worked on the assignment, in response to the corporation's threat, the District Commissioner waived the adjustment of $200 million of additional taxable income proposed by his team of IRS agents. Presumably, the District Commissioner of the IRS feared that if the corporation had moved to Greenich, Connecticut, that the staff at the Albany Office would be significantly reduced, no longer warranting his position as District Commissioner in Albany.
You be the judge of the veracity of this story.