Tax Administration: IRS' Use of Random Selection in Choosing Tax Returns for Audit

Pursuant to a congressional request, GAO reviewed the Internal Revenue Service's (IRS) use of random audits during fiscal years 1994 through 1996, focusing on the: (1) number of audits selected overall and at random for tax returns filed by all taxpayers and by IRS employees across the nation and in Georgia; (2) profile of the taxpayers subjected to random audits by state, type of taxpayer return, taxpayer income level, and taxpayer occupation; (3) results of the random audits in terms of the number of audits for which additional taxes were recommended as well as the amount of these additional taxes and the number of referrals to IRS' Criminal Investigation Division; (4) known burdens imposed on taxpayers subjected to random audits; and (5) alternatives that IRS might have used other than random selection to meet its objectives.