Audit Reengineering



Courtesy of IRS and Tax Talk Today



[This is an excerpt from the Tax Talk Today Webcast, of Tuesday, May 11, 2004, IRS EXAMINATION PROGRAM CHANGES]

This is a direct quote from a statement by William P. Marshall, Project Director, Examination Reengineering, also with the IRS Small Business/Self-Employed Division (SBSE). He is talking about who will be targeted for audit in the upcoming round of examinations. Auditors are being trained now:

Well, we continue to have 74 percent of the IRS-wide tax gap attributable to SBSE taxpayers. So, for 2005, we're going to continue to focus on those areas that we believe are the most noncompliant. So, in order of priority, tax avoidance transactions will continue to be the number one item for us. We'll have high income high-risk taxpayers, high income non-filers, unreported income cases, and for the first time in a number of years, we're going to get back to what I call the criminal examination workload, which will include corporations, Sub-S corporations, and partnership returns.

I think it might be important to point out, too, we've been spending a lot of time over the last year working with the Office of Professional Responsibility, so LMSB, WI, and SBSE, even CI, have all worked together to try to do a better job of dealing with practitioner behavior, which while we run into those situations that are trying to defeat the system, hinder, delay the examination process, I think from our standpoint we haven't done everything we could possibly do to deal with that, and we have committed to handling more of those situations, and being more responsive than we have in the past.