Three offices in the Internal Revenue Service's (IRS) Wage and Investment division (W&I) are responsible for selecting returns for audit. Most returns are selected via computer systems that automatically send notices to taxpayers based on certain criteria, such as the validity of dependents. W&I program officials annually review the criteria and apply updates to the following filing season's retu

For tax year 2001, an estimated 46 percent of taxpayers who deducted cash contributions misreported, resulting in an estimated $13.8 billion in underreported net income. Since this amount is in income, and not tax dollars, the tax gap from the misreported cash contributions was much less than $13.8 billion. About 79 percent of misreporting taxpayers overstated a total of $16 billion in contributi

The President's fiscal year 2010 budget request for IRS of $12.1 billion is a 5.2 percent increase of $603 million over the fiscal year 2009 appropriation, with increases for enforcement (7.6 percent), operations support (5.6 percent), and BSM (10.3 percent) and a 1.0 percent decrease for taxpayer services. The President's budget documents include legislative proposals aimed at reducing the tax g

The average U.S. effective tax rate on the domestic income of large corporations with positive domestic income in 2004 was an estimated 25.2 percent. There was considerable variation in tax rates across these taxpayers. The average U.S. effective tax rate on the foreign-source income of these large corporations was around 4 percent, reflecting the effects of both the foreign tax credit and tax de

AEITC use was low--only about 3 percent of EITC recipients potentially eligible for the advance received it in tax years 2002 through 2004, or about 514,000 of the 17 million potentially eligible individuals each year. About half of all recipients received $100 or less in AEITC and 75 percent received $500 or less for the year, with a total benefit paid of about $146 million each year. Several ef

Areas of individual taxpayer noncompliance that are promising targets for additional research to improve reporting compliance include: income/losses from partnerships and S corporations, income/losses from rental real estate, sole proprietor income/losses, income/losses from farming, other income--net operating losses, gambling income/losses, capital gains for assets other than securities, other

GAO noted that: (1) IRS has taken a number of actions to implement the Low-Income Taxpayer Clinic Program; (2) after passage of the Restructuring Act in July 1998, IRS (which had limited experience in operating grant programs) sought input from tax practitioners and others regarding the design and operation of the program; (3) it also developed a grant application package and selection and report

GAO noted that: (1) IRS met or exceeded its 1999 goals for several performance measures, but fell short of its goals in two key areas - taxpayers' ability to access IRS' toll-free telephone service and the quality of IRS' responses to taxpayers tax law questions; (2) certain features of IRS' methodology for measuring the quality of responses to tax law questions also warranted IRS' attention; (3)

GAO noted that it published 50 reports in 6 broad areas: (1) IRS management and budget; (2) individual and business tax issues; (3) customer service; (4) submission processing; (5) accounts receivable/collections; and (6) tax expenditures and preferences.

GAO noted that: (1) IRS estimated that 25.8 percent of EIC, or $4.4 billion, was overclaimed in tax year 1994; (2) this is a relatively high error rate, but the gross dollar amount is lower than that of some other taxpayer groups; (3) for example, underreporting of income by self-employed individuals accounted for nearly $30 billion of the estimated $128 billion in taxes owed but not voluntarily