WASHINGTON Jan 4 The U.S. Internal Revenue
Service may be missing out on billions of dollars in uncollected
taxes by auditing too many lower-income individuals and
businesses with costly, in-person exams, a U.S. government
watchdog said on Friday.
In an effort to close the gap between taxes owed and taxes
paid - estimated at $450 billion in 2006 - C ongress asked the
Government Accountability Office to study IRS enforcement.
The GAO found the IRS could have collected $1 billion a year
more in 2007 and 2008 by auditing more taxpayers with income
The agency also could be more efficient by doing more
correspondence audits through the mail rather than face-to-face,
or "field," audits, the GAO said.
The IRS said in a response included in the GAO report that
changes "will take years to implement, not months."
An IRS spokesman declined to comment further.
Correspondence audits account for about 75 percent of all
individual tax return audits.
These audits have been criticized the Taxpayer Advocate Nina
Olson. The IRS can issue "robo" correspondence audits that limit
dialogue between a taxpayer and the agency.