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The most dreaded of audits - soon to be shelved?

Of the various audit types used by the IRS, the Taxpayer Compliance Measurement Program (TCMP) audit, in which taxpayers are picked randomly without regard to what they have claimed on their returns, has the reputation for being the most intensive--and the most burdensome to the taxpayer. The IRS now says it will change the way it operates the TCMP audit.

The IRS uses the TCMP to collect data on which to base its (undisclosed and secret) audit selection criteria. This is why TCMP audits historically have been done with a fine-toothed comb. Joint filers, for instance, had to provide a marriage certificate and those claiming dependent exemptions had to provide children's birth certificates. The examining agent had to cover a 12page list of items. The courts held taxpayers had to cooperate with TCMP auditors.

Now IRS officials say TCMP audits will be conducted in the same way as regular audits. The number of taxpayers audited by TCMP in 1992 will be only 25,000 (down from 56,000 in 1990, for instance).

Auditors will have the discretion to bypass clearly documented items. The 12-page checklist will no longer be used. The reason for the change? The IRS now has computer programs that allow it to develop the data needed for audit selection criteria from returns audited in the regular way. TCMP may even be dropped altogether in the future.
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Title Annotation:Taxpayer Compliance Measurement Program
Author:Wagenbrenner, Anne
Publication:Journal of Accountancy
Article Type:Brief Article
Date:Jan 1, 1993
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