The Internal Revenue Service has announced plans to return to its practice of selecting random tax returns for audits this fall. Beginning in October, the Service will target approximately 50,000 income tax returns from 2006.
The random audit process had been discontinued five years ago when the IRS began its mission to be recognized as a kinder, gentler agency.
Traditionally, a random audit is a full-blown audit where the chosen taxpayer is subjected to an examination of every item on the tax return and must provide justification for each item. In this go-round, the IRS has indicated that many of the randomly audited taxpayers will not face the rigorous line-by-line audit.
It is expected that approximately 8,000 returns will be examined by the IRS and will require no action on the part of the taxpayer. Approximately 9,000 taxpayers will be able to respond to audit inquiries by mail. The remaining 30,000 or so taxpayers will be required to face their inquisitors and explain information on their tax returns, however the IRS has indicated that substantiation for every single number on the return might not be required.
The taxpayers selected for random audits are not suspected scofflaws. The tax returns are selected completely randomly and the audits are used to gather information about taxpayer norms.