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DOCUMBNT RESUME
04268 - [B3414668]
Repetitive IRS Audits ol Taxpayers Are Jus.ifiedl GGD-77-74;
B-137762. November 18, 977. 33 pp. + 5 appandices (22 pp.).
Report to Pep. Al Ullman, Chairman, Joint Committ e on Taxation4'
Sen. Russell B. Long, Vi'e Chairmar; by Elmer B. -taats,
Comptroller General.
Issue Area: Tax Administr ltion (27 0).
Contact: General Governe, t Div.
Budget Function: Get eral overnmint (B00).
Organization Concerned: ILternal Revenue Service; lepartment of
the Treasury,
Congressional Relevance: .. use Coamsittee on Ways ark1 means;
Sen-ate Coii-ttee on P1'anee; coint Comaittee on Taxation.
*Sean Russell B. Long.
The Internal Revelue Service (IRS) audits ti relatively
small number of individual ltaxpayers each year. Overill,
taxpay-ers who have been audited repetitively by the [tRS were
audited because their returlis fit the usual selectic11 criteria.
However, IRS shol Id reduce -he number of rpetitivei1 audited
taxpayers. Find:.ngs/Conclueions: All returns are -e'ected for
audit through the sane systAm and the system generally protects
against selectioL abuse. Repetitive audits are likC all audits
in terms of iecommended tax 1ncreapes, indicating that taxpayers
were not repeatedly selectedjunless tax adjustments wtIre
probable. About 60% of repetitive audits resulted frow-. high
s:ores under the computer-geiuratea audit selection prog'ram,
unllowable items on the retu:'n, or selection hy an auditor as a
resilt of auditing another yer's
k sreturn. Recommendations: The
Commissioner of Internal Revenue skould include repetit .ve
audits in the planned study of factors contributing to 'oluntary
taxpayer compliance with the ti\x las. hen classifying raturns
for audit potential, the Commicsioner shoalM discontinue the
practice of not selecting returns because earlier audits did not
change the tax amount, unless iforhation about the prevlous
issues is available to make a more informed audit/no-audit
decision. He should make changes in the taxpayer contact
procedure to prevent unnecessary repetitive audits and require I
written explanation and supervisory approval before auditihg a
return originally obtained for iuformation or refe.ences
purposes. (Author/Sc')](ViewImageLocal?handle=hein.gao/gaobaawho0001&div=1&collection=&method=preview&ext=.png&size=3)