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Don't cut back on TCMP audits - beef them up instead! Says GAO.

In January, it was reported the Internal Revenue Service was going to scale back its use of taxpayer compliance measurement program (TCMP) audits. (See JofA, Jan.93, page 21.) However, the General Accounting Office said the TCMP audit program should be improved, not cut back. The GAO argued downsizing the TCMP would result in less precise and thus less effective compliance information.

The IRS had planned (among other changes) a 50% decrease in the number of TCMP audits and an end to the line-by-line "fine-tooth-comb" style examination of each item on a return.

The GAO's recommendation to the IRS was to drop the proposed TCMP changes. Instead, the GAO recommended any future changes in the program follow these criteria. The data produced should

* Consistently measure nationwide compliance.

* Help the IRS choose returns for audit and allocate audit time and money.

* Provide statistics on noncompliance for existing enforcement programs.

Further, the GAO said it wants the IRS to take less time to produce final TCMP results and to conduct the next TCMP with tax returns for 1993 or earlier.

The IRS has deferred the changes it originally planned in TCMP audits of 1992 returns and has agreed to adopt the GAO's data criteria in developing a new program.
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Title Annotation:taxpayer compliance measurement program, General Accounting Office
Publication:Journal of Accountancy
Article Type:Brief Article
Date:Jun 1, 1993
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Next Article:GAO: How to stop false dependent claims.

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