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Tax Administration: IRS' Use of Information Gathering Projects

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Report Type Reports and Testimonies
Report Date Feb. 5, 1998
Report No. GGD-98-39
Subject
Summary:

The Internal Revenue Service (IRS) each year audits tax returns to determine whether taxpayers have voluntarily complied with the tax laws and paid the proper amounts owed. In selecting returns for audit, IRS' computers assign a score to each filed return to help find those having audit potential--that is, those for which an audit would be likely to change the reported tax because of noncompliance. Because such computer-aided selection techniques rely solely on information on filed returns, IRS collects information from other sources to identify potential taxpayer noncompliance. Information gathering projects are one method the agency uses to collect information on noncompliance and to spot returns with audit potential. This report provides information on the (1) number of information gathering projects nationwide and in IRS' Georgia District during fiscal years 1994 through 1996, (2) descriptions and results of information gathering projects in Georgia during fiscal years 1994 through 1996, and (3) controls and procedures IRS has in place for information gathering projects.

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