The IRS is Trying to Overhaul its Program for Examining Taxpayer Returns
| The IRS is Trying to Overhaul its Program for Examining Taxpayer Returns |
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The IRS is trying to overhaul its program for examining taxpayer returns, but more must be done to reduce taxpayer burden, the Treasury Inspector General for Tax Administration (TIGTA) said in an audit released on March 24, 2011. Click here for a copy of the full audit report. As described in the audit, the IRS's Correspondence and Discretionary Examination (CDE) Program conducts examinations exclusively by mail to reduce operational costs and minimize the burden on taxpayers. “However, taxpayers have expressed concerns with the length of the examination process, the lack of consideration given to information they send to the IRS, and treatment by IRS employees,” TIGTA said. Auditors determined that the IRS's progress to date could ultimately lessen taxpayer burden and increase taxpayer rights and entitlements. Significant improvements were noted in certain areas. “However, audit findings showed that IRS employees did not always adhere to established procedures and/or guidelines when processing correspondence that taxpayers submit for examinations of their tax returns,” TIGTA said. In a statistical sample of cases where taxpayers agreed to additional tax assessments, 28 of 62 cases contained errors. The majority of these errors related to the untimely closing of cases. In cases where the taxpayer did not agree with an additional assessment, agency employees did not always consider the taxpayer's correspondence before closing the case. “It is critical that examiners follow all established procedures, including taking fully into consideration the information that taxpayers provide,” said J. Russell George, the inspector general.
This audit was initiated at the IRS Oversight Board’s request for TIGTA to assess whether recent IRS efforts to identify weaknesses and take actions in its Program actually improved results. The overall objective was to determine whether the IRS’s reengineered Program resulted in a more responsive and less burdensome process for taxpayers.
The Report concluded that when IRS employees do not adhere to IRS guidelines and procedures, it is simply an error. TIGTA continues to believe that when these errors occur, taxpayers are at risk of not receiving their rights, entitlements, and protection of due process when they question the accuracy of tax liabilities resulting from Program examinations.
McLaughlin & Quinn, LLC Partner Thomas P. Quinn, Esq. concurs with the TIGTA Report. Tom states that “we frequently encounter IRS auditors who simply do not follow the established audit guidelines. Failure to follow these guidelines increases the costs and burdens on taxpayers, most of whom have made every attempt to be in full compliance with the law.” Managing Partner F. Moore McLaughlin IV, CPA, Esq. adds “all we ask is that the IRS auditors play by the rules and allow the taxpayers a level playing field. I hope that the IRS takes this report seriously and adopts these well-reasoned recommendations.”
For more information on this report, or if you or your client are involved in an IRS and need assistance, please contact either Tom Quinn, Esq. at This e-mail address is being protected from spambots. You need JavaScript enabled to view it or by phone at 401-421-5115 ext. 218 or Moore McLaughlin, CPA, Esq. at This e-mail address is being protected from spambots. You need JavaScript enabled to view it or by phone 401-421-5115 ext. 212.
Click here to read the entire Report. |
