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IRS Audits: Workpapers Lack Documentation of Supervisory Review

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Report Type Reports and Testimonies
Report Date April 15, 1998
Report No. GGD-98-98
Subject
Summary:

The Internal Revenue Service (IRS) requires its auditors to examine a taxpayer's books and records in sufficient depth to fully develop the relevant facts and correctly apply the tax laws to these facts. IRS auditors are to document these activities and their conclusions in audit workpapers. In a December 1997 report (GAO/GGD-98-38), GAO reviewed workpapers for a random sample of 354 IRS audits to measure how often IRS auditors used the financial status audit techniques and what these techniques produced in tax adjustments. GAO discovered two procedural issues that extended beyond the objectives of that assignment: (1) the adequacy of audit workpapers and (2) documentation of supervisory review of those workpapers. This report evaluates the condition of IRS workpapers, including documentation of supervisory review, that GAO found in doing its work for the December 1997 report.

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