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Thursday, March 29, 2007

IRS PLUCKING ONLY LOW-HANGING AUDIT FRUIT?

In a recent article, several IRS corporate auditors are complaining that the IRS' focus on closing corporate tax audits is forcing auditors to pick up the easy tax dollars (the low hanging fruit) but leaving more novel and difficult tax collection dollars behind (the fruit higher up on the trees). Purportedly, auditors are incentivized to close cases quickly by paying cash bonuses and promoting auditors based on their success in closing cases. Taxpayers who abuse the system through new strategies win because the auditors are trying to close cases quickly and have little incentive to engage in more time consuming and protracted disputes relating to new tax abuse methods.
IRS officials dispute this, claiming that these are simply complaints from older agents unwilling to adopt new approaches. They point out that more tax dollars have been collected through audits in recent years, and that this vindicates the IRS strategy of puttings its resources into auditing more companies and focusing on large-dollar tax issues.
To read the entire article, click here. [IRS Auditors Claim Billions Lost Under Pressure, http://www.accountingweb.com]
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