Internal Revenue Service: Challenges Remain in Combating Abusive Tax Schemes Page: 10 of 32
This report is part of the collection entitled: Government Accountability Office Reports and was provided to UNT Digital Library by the UNT Libraries Government Documents Department.
Extracted Text
The following text was automatically extracted from the image on this page using optical character recognition software:
addressing abusive schemes and to enhance the work planning process. In
this context, SB/SE developed a template for organizing information about
known schemes and known investors. The template took the form of a
matrix to be used to compare the risks presented by various schemes along
the lines of factors such as the number of cases available for IRS staff to
review but as yet unstarted, the number of promoters, the amount of
money involved, and the number of taxpayers participating. The matrix
organizes abusive schemes within the seven categories shown above in
table 1.
According to a summary of items in the matrix categories and IRS's work
with offshore credit cards covering October 2001 through mid-August 2003,
IRS identified about 131,000 participants in abusive schemes. This number
included 22,000 participants in the offshore credit card area and, according
to SB/SE, reflected the best available data, but not a potential universe. It
updated a previous summary covering October 1, 2001, through February
2003 that showed 72,600 potential participants. In that summary, SB/SE
noted that recaptured or potentially recaptured taxes from closed or
identified reviews totaled almost $1.6 billion, excluding undetermined
amounts from the credit card work. That summary also included the 22,000
participants in the offshore area, but IRS was not able to update this figure
for its later summary because new credit card information had just arrived.
IRS used an estimate in its fiscal year 2005 budget presentation of the
number of taxpayers it believes are involved in abusive schemes who are
likely to be identified through its various efforts. IRS estimated that more
than 400,000 taxpayers fall into this category, generally including the
approximately 131,000 participants it had identified as of mid-August 2003.
According to IRS officials, this estimate was included in materials provided
to the Department of the Treasury and the Office of Management and
Budget during budget discussions. It was used not as a basis for requesting
resources sufficient to examine the taxpayers, but to show that the abusive
scheme problem was large relative to current resources. According to IRS
officials, this estimate was developed during a series of meetings, but
documentation showing the basis for the estimate was not prepared at that
time.
We are unaware of a specific IRS or other policy that requires
contemporaneous documentation of a figure like the 400,000 estimate of
taxpayers IRS expects to identify as engaged in abusive schemes.
Nevertheless, documenting the basis for key numbers related to an
agency's programmatic efforts is in line with the thrust of managementGAO-04-50 Challenges in Combating Abusive Tax Schemes
Page 7
Upcoming Pages
Here’s what’s next.
Search Inside
This report can be searched. Note: Results may vary based on the legibility of text within the document.
Tools / Downloads
Get a copy of this page or view the extracted text.
Citing and Sharing
Basic information for referencing this web page. We also provide extended guidance on usage rights, references, copying or embedding.
Reference the current page of this Report.
United States. General Accounting Office. Internal Revenue Service: Challenges Remain in Combating Abusive Tax Schemes, report, November 19, 2003; Washington D.C.. (https://digital.library.unt.edu/ark:/67531/metadc291496/m1/10/: accessed March 29, 2024), University of North Texas Libraries, UNT Digital Library, https://digital.library.unt.edu; crediting UNT Libraries Government Documents Department.