New York (June 21, 2002) - Hold on to your shoebox receipts - the Internal Revenue Service is resuming random audits this year of up to 50,000 taxpayers for their 2001 taxes.
IRS Commissioner Charles Rossotti told the Wall Street Journal that the random audits are key to helping the agency determine what kinds of red flags should trigger targeted audits. The agency uses data from the audits to update a secret formula it will use to pick audit targets in the future, the paper said.
Random audits were last done in 1988, and both Congress and taxpayer groups have opposed them. Regular IRS audits have declined in recent years. The IRS said it conducted 731,756 audits in the fiscal year ended Sept. 30, 2001, down from 1.9 million in fiscal 1995.
The random audits are initially planned for only one year, but the IRS said it might resume conducting them every few years.
-- Electronic Accountant Newswire staff
