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Tax Administration: Audit Trends and Results for Individual Taxpayers

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Report Type Reports and Testimonies
Report Date April 26, 1996
Report No. GGD-96-91
Subject
Summary:

Compared to the 1960s and 1970s, the audit rate--the annual percentage of individual tax returns that the Internal Revenue Service (IRS) has audited of the total number of tax returns filed--has dropped, falling below one percent in fiscal year 1993. Although IRS believes that its audits promote voluntary taxpayer compliance, no one knows their actual impact, particularly in light of a decreasing audit rate. Data are available, however, on trends in audit rates across the country and on the results of these audits, such as the type of tax returns being audited and the productivity of the audits, measured by additional taxes recommended per return and per direct audit hour. This report discusses (1) the trend in IRS' audit rates for individual returns and (2) the overall results of IRS' most recent audits of individual returns.

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