Real Clear Politics:  IRS: The Small Business Bully:

President Barack Obama and Governor Mitt Romney continue to tussle
over tax rates and deductions. Ignored, however, have been questions
about tax collection and enforcement — tools presidents use to achieve
their economic policy goals. Hit a wall ramming your tax hike or cut
through Congress, simply increase or decrease tax enforcement and
audits.

Under the Obama Administration, the IRS has
placed small and medium-size businesses — the engines of job creation — in
its auditing crosshairs.

According to IRS statistics,
from 2009 to 2011, the coverage rate (number of audits as a percentage
of total returns filed) for corporations with assets between $10 million
and $50 million has increased 32%. The coverage rate for
corporations with assets between $50 million and $100 million has
increased at the same rate. Some businesspeople file individual returns,
and those with incomes higher than $1 million have experience a 94% increase in their coverage rate, and a 29% increase in
the actual number of exams since 2009. Those with incomes $200,000 and
higher have seen a 36% increase in their coverage rate.

So, has ratcheting up audits on small and medium-size businesses produced more revenue bang for the IRS’s buck? Hardly.

Using 2011 IRS data, the Transactional Records Access Clearinghouse
(TRAC) at Syracuse University found that audits of a company with
assets between $10 and $50 million yielded $702 in recommended
additional taxes per hour. For large corporations with assets of $250
million or more, the recommended additional taxes are $9,173 per hour.
Yet while the coverage rates of companies with assets between $10 to $50
million are up 32%, rates for companies with assets of $250
million or higher are up just 7.4%.

In short, for every hour the IRS spends auditing a small or medium
business, it would have recouped $8,471 more dollars auditing a large
corporation. Nevertheless, the IRS continues to aggressively increase
audits on small and medium companies over their larger counterparts. …

Tax collections and enforcement can be just as redistributive as tax
rates. As the numbers show, the IRS is increasingly placing job creators
under the auditing hatchet while shirking oversight of the billions in
new tax credits flowing to those claiming low-income status.

Put simply, the Internal Revenue Service is morphing into the Internal Redistribution Service.