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IRS Audits
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Audit activities help ensure taxpayers pay the right amount of tax and help address the net $385 billion tax gapthe difference between the amount of taxes paid voluntarily and on time, and the amount owed. Audit programs in Internal Revenue Services (IRS) Wage and Investment division (WI) mainly cover refundable credits reported on the Form 1040, Individual Income Tax Return. The hundreds of thousands of taxpayers whom WI interacts with annually during audits make it critical to apply the tax law fairly. Unfair selection would increase burden on taxpayers and reduce public confidence in IRS. This book reviews and describes the WI process for selecting tax returns for audit, and determines how well WIs audit selection procedures support its mission and goal to apply the tax law with integrity and fairness to all. This book also describes IRSs processes and controls for selecting Small Business/Self-Employed (SB/SE) taxpayers for audit; and determines how well SB/SEs selection processes and controls support its mission to apply the tax law with integrity and fairness to all.
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