The IRS Has Made Limited Progress Developing the Methodology to Comply With the Treasury Directive to Not Increase the Audit Rate for Taxpayers With Incomes Below $400,000 Due to Planning and Implementation Challenges

The Deputy Commissioner should accelerate discussions with the Treasury Department to finalize the audit rate methodology for the 2022 Treasury Directive.

The Deputy Commissioner should document, in a formal and comprehensive manner, the processes, related requirements, pertinent discussions, and meetings regarding the development of the methodology established to ensure compliance with the 2022 Treasury Directive.

The Deputy Commissioner should use RTF data to produce counts of filing data above and below the $400,000 threshold, rather than relying on SOI sampling data that support the IRS Data Book.

The Deputy Commissioner should establish procedures and controls to ensure that the appropriate field in AIMS is updated to include the taxpayer’s reported TPI plus unreported income identified during the examination in order to develop a measure of post-audit TPI.

Establish procedures and controls to ensure that the appropriate field in AIMS is updated to include the taxpayer’s reported TPI plus unreported income identified during the examination in order to develop a measure of post-audit TPI.