Interesting SU findings on IRS audits

(Martin J. Whitman School of Management)

The Syracuse Post-Standard / Syracuse.com reports on some interesting findings from a research center at Syracuse University's Martin J. Whitman School of Management. The Transactional Records Access Clearinghouse found that IRS audits of large corporations (assets greater than $250 million) are down from a 64% audit rate in 1988 to a 26% rate in fiscal year 2007. The numbers were calculated based on IRS files obtained through the Freedom of Information Act.

The report found that while audits of large corporations have decreased, audits of smaller corporations have increased. The report warned that this could be a problem, because audits of large companies can collect more money for the government than large companies. The IRS did not deny the numbers, but disagreed with the analysis, saying that although audits for large companies are down, the collections from such audits have increased. It said audits of large corporations were down because IRS agents are meeting with the companies before taxes are filed. The idea is to come to an agreement beforehand, eliminating the need to go back an do an audit.

Researchers at Whitman responded with convincing statistics: of the smaller corporations, 34% of audits recommended no change in tax collections. Meanwhile, of the larger corporations, only 4% of audits recommended no change in tax collections in 2007.

This is something that Congress and the media should look into further. With the IRS making tax agreements instead of conducting audits, it sounds like the perfect opportunity for political favors. As a student journalist, I try to remain objective, but it has already been proven that political favors have run rampant in the Bush administration. The oil companies helped determine the nation's energy policy with Dick Cheney, and Halliburton was essentially handed the majority of on the ground defense contracts in Iraq and Afghanistan, no questions asked (only to later find that the company had overcharged the government millions while building substandard facilities).

It would be interesting to share the report with professors and students at Syracuse University's S.I. Newhouse School of Public Communications, and the Maxwell School of Citizenship and Public Affairs (ranked number 1 in the US for public affairs since 1995). That way scholars of policy as well as aspiring journalists could investigate further the potential connections between politics and corporate tax collection.

CONNECTING with Syracuse: Part I, Strathmore

I feel like I have come so far this semester learning about the city of Syracuse and the community. I have had the opportunity through several different classes and extra-curricular opportunities to experience new places in the area, meet new people, and get a better understanding and appreciation for my four year home away from home.

In PAF 315 - my public affairs class - I just wrapped up a housing survey in the Strathmore neighborhood. I worked as a consultant for the local non-profit agency Home HeadQuarters, Inc. through this class. Rating the condition of 200 randomly selected houses out of 1,955 in the neighborhood, I provided the agency with baseline information before they start a new loan program for Strathmore homeowners with in the next few weeks. The survey took at least 10 hours to complete, and involved me driving around and rating each of the 200 addresses on exterior conditions. There were 10 categories: roof, gutters, windows, doors, walls, porches/patios, foundations, garages, yards, and overall condition of the property. I submitted a final report to Home HeadQuarters and to my professor on April 2nd. I happy to say that I did well (which is a relief, because its worth 50% of the course grade!). The data that I collected will be entered into a national database of housing conditions in cities around the country.

I learned a lot in the process of this project. Talking to my supervisor/ contact person at Home HeadQuarters, I found out about the valuable service this agency provides to city neighborhoods. It basically acts as a middle man lending institution. Congressman James Walsh, R-Syracuse, secures money each year from the House for Syracuse housing. He decides what neighborhoods he wants the money to go to, and then gives the money to Home HeadQuarters to loan out home owners in those specified neighborhoods. Qualified residents can then apply for home improvement loans to fix up their property, increase their home's value, and contribute to the overall quality of the neighborhood. This is just one of the services that Home HeadQuarters provides. There are several different departments (find out more at homehq.org). An interesting note: Congressman Walsh will step down at the end of this term after 2 decades serving New York's 25th district (he assumed office in 1989). It will be interesting to see how funding for Syracuse housing will be impacted by the change.

With all the driving involved in this project, I was able to see parts of the city that I otherwise would have avoided. I was glad for the change in scenery and perspective. To get to Strathmore - one of the nicest and most stable neighborhoods in Syracuse - I had to drive through some of the less stable areas of the city. The South Side has seen an economic decline for decades, as evidenced by the condition of many of the houses. Peeling paint, sinking porches, and broken windows are the norm here. These are the blocks between S. State St, Midland Ave, S. Salina St, South Ave, and S. Geddes St. It's no secret that this area is struggling, but I had no idea how big the South Side was until I drove through it. It covers a huge rectangle more than 6 blocks wide and over a mile long, starting at the south edge of downtown and stretching to the Syracuse Valley. I was stunned. But at the same time, enlightened. With all of its visible challenges, this was a much different place than the land of no return that people at SU have made it out to be.

Sure, I would never want to drive through there at night, but I was reminded that this is still a community where people live and work. As I drove, I passed a community library (that I would later spend an afternoon doing community service at - more on that later), schools, banks, stores, and most importantly...homes. This hit "home" (pun intended) when one evening I was driving back to my campus apartment and passed a father throwing a football to his two little boys out front. The house had an American flag flying high on a pole in the front yard. I can't describe how I felt at that moment. "Moved" I suppose is the best way to put it. On the one hand, this was not the American dream I have read about in textbooks growing up. These people are doing their best to get by in a part of the city that has seen progress pass it by. They live in houses that once represented the best of the American city, whose past occupants helped build Syracuse into an industrial powerhouse during the first half of the 20th century. Now, like in other rust-belt cities in the Northeast and Upstate NY, industry is all but gone, and these houses and their occupants represent the extent of economic decline endured here. "Endured" is the key word. Despite the glaring lack of economic opportunity, people get by. Families spend quality time together, go to church, and stop to talk with their neighbors. And so I was moved and glad to see "how the other half lives". There is a lot those of us on the other side of I-81 (Syracuse University, suburbs, etc.) could learn from the residents of the South Side: about community, hardship, and endurance - how to make the best out of what you have.