GAO report - Streamlined audit process for corporate tax returns 

September 23: The U.S. Government Accountability Office (GAO) today publicly released a report addressing whether the IRS's streamlined corporate audit process is meeting its goals.

Reason for GAO report

In the report, the GAO notes that IRS audits of corporate tax returns are costly and create years of uncertainty about a large corporation's actual tax liability. The IRS developed the compliance assurance process (CAP) in 2005. Under this process, the IRS and taxpayers agree on how to report tax issues before the return is filed; compliant and cooperative taxpayers can get a streamlined IRS review of their tax return in a phase called compliance maintenance. GAO was asked to assess this process.

The GAO report [PDF 880 KB]:

  • Describes the goals and potential benefits of the process
  • Assesses the IRS's efforts to determine whether these goals are met
  • Assesses the IRS's readiness to move more taxpayers into compliance maintenance
  • Describes the IRS's efforts to coordinate the process with its existing compliance processes

GAO recommendations

The GAO report recommends that the IRS:

  • Evaluate the process
  • Develop measures and targets for the goals
  • Consistently capture data to track goal progress
  • Track resolution of tax issues and resource savings
  • Develop a plan to expand compliance maintenance
  • Verify that audit staff understand attempts to clarify related guidance

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