Due to the decrease in resources and the possibility of even greater decreases the IRS is shifting its audit focus for businesses.
The IRS plans to utilize less resources for the large major corporations (assets $250 million plus), it appears that they these companies will be easier to audit since they must file Schedule UTP to flag their uncertain tax positions.
This will free up precious resources for pass-through entities (S firms, partnerships). The IRS has little fondness for these firms. The initial targets are planned to be those with assets between $10 million and $250 million.
Just for an added twist firms involved in international operations and financial products will also be added to those under the microscope. The IRS hired 600 international auditors last year and plans to add another 300 this year. This has the possibility to impact only a few of my clients.