Summary: The Internal Revenue Service (IRS) abates hundreds of thousands of small business tax assessments annually because either the business or IRS made an error in calculating the taxes. Preventing these errors would eliminate the need for abatements and save IRS time and money. IRS officials said that abatement data could help them provide services to small business. The officials said that such data might help them find ways to prevent errors that result in abated tax assessments. IRS has some data on tax abatements for small business. IRS' master files contain information on taxpayers' accounts, including abatements. IRS also has paper documents on each abatement transaction. In 1999, IRS developed a data file on all abatements that it extracts and updates from the master files quarterly. However, GAO found many problems with IRS' electronic abatement data. GAO identified several steps that IRS could take to improve existing data on such tax abatements and to obtain additional data on the volume, nature, and burden of tax abatements for small businesses. However, IRS needs to weigh the potential costs and benefits. If IRS begins obtaining data step-by-step, insights into the potential benefits of improving and/or collecting additional data can be gained and informed judgements can be reached about how much data to gather and how to minimize the costs to obtain it.