GAO reports on IRS use of Form 990 data in return examination selection
GAO reports on IRS use of Form 990 data
The U.S. Governmental Accountability Office (GAO) released a report of its findings on reviewing the IRS’s use of Form 990 data.
The GAO was specifically asked by the minority leader of the House Ways and Means Committee to assess: (1) the IRS’s use of data to select returns for examination; and (2) the process that the IRS has established for selecting returns.
GAO analyzed the IRS examination data from fiscal years 2016 through 2019 including results from the largest Form 990 model, as well as model documentation for a generalizable sample. Of the returns examined (selected using the model), changes to the return were made in 87% of cases—noted to be similar to the change rate found under the prior return selection methods.
The GAO made 13 recommendations in its report, including that the IRS establish objectives; revise model documentation; fully document processing and using data in decisions; and regularly evaluate examination selection.
Read the GAO report: Tax Exempt Organizations: IRS Increasingly Uses Data in Examination Selection, but Could Further Improve Selection Processes, GAO-20-454 [PDF 7 MB] (June 2020)
For more information, contact a tax professional with KPMG’s Washington National Tax practice:
Ruth Madrigal | +1 202 533 8817 | email@example.com
Preston Quesenberry | +1 202 533 3985 | firstname.lastname@example.org
The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organization. KPMG International Limited is a private English company limited by guarantee and does not provide services to clients. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.