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Enforcement "Improvement" Update

This November is the mid-point in the five-year term of IRS Commissioner Mark Everson. Mark continues to focus on his three primary objectives:

  1. Better serving of taxpayers
  2. IRS modernization
  3. Enhanced enforcement activities (or audits)

He claims good progress in all three areas, but we are looking here at what has happened in the area of enforcement - "to ensure everyone pays their fair share." Key items from the fiscal year that ended September 30, 2005:

  • Enforcement revenues (from collection, examination, and document matching) increased by 10% to a record $47.3 billion.
  • Total individual returns audited increased by over 20% compared to 2004.
  • Audits of individuals with incomes over $100,000 is at 1.58%, double what it was four years ago.
  • Audits of small businesses organized as corporations more than doubled over 2004.

Alarming to you as an individual? It does not need to be. Just -

  1. Work with a competent tax professional. (That cost is minimal compared to the value of a weekend spent preparing your own return.)
  2. Allow your tax professional to guide you to remain compliant with the law.
  3. Sleep well at night!

The IRS article also lists improvements in customer service including improvements in their toll-free tax advice accuracy rate (89%) and customer satisfaction with their toll-free service (95%).

"Tax software is no substitute for tax knowledge."

Any views expressed herein are based on our best information. The content of this web site was written as general information without specific individual information and thus may not apply in all situations. This material was not written, and cannot be used by the taxpayer for the purpose of avoiding penalties that may be imposed on the taxpayer.

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Janelle Ogg, EA
Richard Ogg, EA