In late August 2013, the Treasury Inspector General for Tax Administration (TIGTA) released a report that found that IRS correspondence audit practices should be strengthened.
TIGTA found that many taxpayers who faced IRS tax audits and were found to have underpaid their federal taxes in one year were not audited for other years. TIGTA’s investigation found that if the IRS audited taxpayers for other years, then the agency would find that a significant percentage of those taxpayers owed money for other years as well.
Accordingly, TIGTA is recommending that the IRS develop procedures to determine how current year correspondence auditing results should be used to determine if returns from prior and/or subsequent tax years should also be audited. The IRS reportedly agrees with the TIGTA recommendations and has indicated that the agency will develop new procedures that will be added to the Internal Revenue Manual for implementation.
The TIGTA report also concluded that the IRS correspondence tax audit process was more economical than face-to-face IRS tax audits or other auditing methods.
This is not the first time that the IRS has considered the possibility of auditing additional years of tax returns if one year is found to contain an error. If you are an Oklahoma taxpayer who is facing an audit, or you are interested in this topic about auditing of additional tax years then our Oklahoma City tax lawyers invite you to read our FREE blog post, “IRS Vows to Do Better (Auditing Additional Years of Your Income)” for more information.