Pursuant to a congressional request, GAO analyzed the impact of the Internal Revenue Service's (IRS) Actuarial Audit Program on small business sponsors of defined benefit pension plans.

GAO found that: (1) IRS initiated its small pension plan audit program to identify abusive tax practices; (2) IRS did not address issues and questions needing immediate resolution when it initiated the program or provide definitive guidance for examining defined benefit plans; (3) in July 1991, IRS implemented the Actuarial Resolutions Program to provide taxpayers with an opportunity for quick resolution of their cases; (4) IRS data showed that most audited plan returns were those of highly paid professionals; (5) in many cases, IRS did not find sufficient evidence to support lower interest rate or retirement age assumptions; and (6) IRS may be unable to support its assumptions for computing allowable pension contributions.