ATR: IRS may still be targeting Conservative groups

[the_ad id=”25740″]

(Americans for Tax Reform) – Serious internal control flaws mean the IRS may still be unfairly selecting taxpayers for an audit “based on an organization’s religious, educational, political, or other views,” according to a pair of reports released by the Government Accountability Office (GAO) today.

As GAO notes, certain deficiencies increase the risk of unfair audit selection based on a taxpayer’s First Amendment rights. As the report finds:

“The control deficiencies increase the risk of selecting organizations for audit in an unfair manner-for example, based on an organization’s religious, educational, political, or other views.”

GAO audited Wage & Investment (W&I) and Small Business/Self-employed (SB/SE) divisions in response to a request from House Ways & Means Committee members led by Chairman Kevin Brady (R-Texas) and Oversight Subcommittee Chairman Peter Roskam (R-Ill.).

These requests were made in response to IRS targeting conservative groups. This targeting resulted in just one conservative non-profit being granted tax-exempt status over a three-year period.

As Chairman Brady and Roskam note, selection flaws mean the IRS is failing to apply tax law in a fair and equitable manner. The Ways & Means Committee summarized the findings of each report, as found below:

GAO Report on Small Business/Self Employed Unit

• GAO found that the IRS does not have strong internal controls and did not have consistent procedures for documenting audit selection decisions, which increases the risk of unfair audit selection.
• GAO concluded that “the lack of strong control procedures increases the risk that the audit program’s mission of fair and equitable application of the tax laws will not be achieved.”

GAO Report on Wage & Investment Unit

• Similar to the other business units, GAO found that the Wage & Investment unit did not always document how cases were selected for audit.
• GAO found that the IRS did not provide support for changes in selection processes and procedures.
• GAO also found that the IRS does not conduct continuous reviews of its audit selections, and instead only reviews it once a year.
• GAO concluded that internal controls should be strengthened to“provide greater assurance that W&I is fulfilling its mission to select tax returns with fairness and integrity.”

Americans for Tax Reform is a non-partisan coalition of taxpayers and taxpayer groups who oppose all tax increases. For more information, please contact John Kartch at jkartch@atr.org or visit the website www.ATR.org.