TREASURY INSPECTOR GENERAL FOR TAX ADMINISTRATION

Office of Audit

Highlights

FISCAL YEAR 2019 STATUTORY AUDIT OF COMPLIANCE WITH NOTIFYING TAXPAYERS
OF THEIR RIGHTS WHEN REQUESTED TO EXTEND THE ASSESSMENT STATUTE

Final Report issued on August 7, 2019

Highlights of Reference Number:  2019-30-054 to the Commissioner of Internal Revenue.

IMPACT ON TAXPAYERS

The IRS is required by law to notify taxpayers of their rights when requesting an extension of the statute of limitations for assessing additional taxes and penalties.  Taxpayers might be adversely affected if the IRS does not follow the requirements to notify both the taxpayers and their representatives of the taxpayers’ rights related to assessment statute extensions.

WHY TIGTA DID THE AUDIT

TIGTA is required by law to annually determine whether the IRS complied with Internal Revenue Code Section 6501(c)(4)(B), which requires that the IRS provide notice to taxpayers of their rights to decline to extend the assessment statute of limitations or to request that any extension be limited to a specific period of time or specific issues.

WHAT TIGTA FOUND

TIGTA’s review of a statistical sample of 60 closed taxpayer audit files with assessment statute extensions found that the IRS was compliant with Internal Revenue Code Section 6501(c)(4)(B).  However, 13 of the taxpayer audit files lacked documentation to support that employees followed the IRS’s internal procedures for further explaining the taxpayers’ rights to the taxpayers.

In addition, TIGTA’s review found instances in which the audit files lacked documentation to support that the IRS complied with procedures requiring the notification of a taxpayer’s representative when an authorization for third‑party representation exists.  Seven of the taxpayer audit files did not contain documentation to support that the taxpayers’ representatives were provided with the required notifications.

WHAT TIGTA RECOMMENDED

TIGTA made no recommendations in this report

READ THE FULL REPORT

To view the report, including the scope, methodology, and full IRS response, go to:

https://www.treasury.gov/tigta/auditreports/2019reports/201930054fr.pdf.

 

Phone Number   /  202-622-6500

E-mail Address  /  TIGTACommunications@tigta.treas.gov

Website             /  https://www.treasury.gov/tigta