With over 220 million business and personal tax returns filed every year and only about 30,000 tax auditors, the IRS is badly outnumbered. That’s one reason the agency is pushing so hard for an electronic filing system, why the IRS puts such a heavy emphasis on computerized audits, and why the agency is now pushing hard to hasten the audit process.
In IRS’s reports relative to its Examination Reengineering Project, there appears to be evidence that the agency intends to speed up the audit process as much as possible, especially when dealing with business audits. The Exam Reengineering Project is the IRS’s undertaking to re-write the way the agency conducts audits.
Now on its face, speeding up an audit might seem like good news. After all, who wants to spend weeks or months being dragged through a grueling examination of his books and records? On the other hand, haste makes waste,especially when you’re dealing with a process expressly designed to separate you from your money.
The reengineering project calls for the IRS to get first appointment closures in all office audit situations. This means, very simply, that when you go to your first meeting with the IRS, the agent will be ready to write and present his audit report when that first meeting is finished. While this certainly will end the pain of an audit more quickly, it will likewise begin the pain of collection equally as fast.
Fight Temptation: Never Be Rushed Through an Audit!
It is rarely to the advantage of the citizen to speed through an audit. Never forget that in all but a few narrow audit scenarios, the burden of proof is always on the citizen. You must prove your return is correct. If you don’t have adequate records or a proper explanation of a given item claimed on your return at the time of the audit, an auditor on the fast-track will want to simply disallow the item rather than afford you more time to gather the evidence needed to prove your case.
While the IRS may wish to accelerate the audit process, you have to take such reasonable time as is necessary to produce the evidence you need to prove the correctness of your tax return. Don’t be bluffed or intimidated into conceding an issue just because you don’t have sufficient proof on the spot.
And, never agree to sign an audit report that you know is not correct. However fast the IRS may wish to conduct an audit, that never translates to a loss by you of your appeals rights unless you sign and accept an audit report, thereby agreeing to pay what the IRS says is owed.
IRS Numbers Presented At Audits Are Usually Wrong, Admits GAO
The IRS’s audit results are wrong between 60to 90 percent of the time. Reports of Treasury Inspectors making anonymous visits to IRS Taxpayer Assistance Center report a staggering rate of error by IRS personal assisting citizens with the preparation of their returns.
What makes anyone think the IRS’s accuracy rate will increase if the agency simply works faster?