Wednesday, November 23, 2011
GAO Report on Adoption Tax Credit Audits and Delays
Excerpt: As of August 2011, 68 percent of the nearly 100,000 returns on which taxpayers claimed the adoption credit were sent to correspondence audit. However, of the approximately 35,000 returns on which audits have been completed as of August, IRS only assessed additional tax about 17 percent of the time. The equivalent rate for all correspondence audits in 2010 was 86 percent. The time it has taken IRS to audit these predominantly legitimate adoption credit claims has resulted in considerable delays in the payment of the related refunds. For the 2012 filing season, IRS has options that might allow it to reduce the number of costly audits and issue refunds faster while still maintaining a robust enforcement strategy. One option is for IRS to immediately send a letter to taxpayers who submit returns without any documentation requesting it before initiating an audit.
GAO report is available now: http://gao.gov/products/GAO-12-98
Accounting Today Article, IRS Faulted for Adoption Tax Credit Refund Delays :
Ethics, Transparency, Support
~ What All Adoptions Deserve.