Tax Administration

IRS Could Reduce the Number of Unproductive Business Nonfiler Investigations Gao ID: GGD-88-77 May 24, 1988

Pursuant to a congressional request, GAO reviewed the Internal Revenue Service's (IRS) efforts to detect business nonfilers, focusing on ways IRS could reduce the number of unproductive investigations.

GAO found that, of 1,976 business nonfiler investigations IRS closed in fiscal year 1987: (1) 298, or 15 percent, involved cases in which IRS erroneously issued multiple employer identification numbers (EIN) to businesses which filed their returns under only one EIN; and (2) 369, or 19 percent, involved cases in which businesses did not follow IRS regulations to file returns even though they owed no taxes. GAO also found that, in 317 cases, or 16 percent, IRS did not accurately update its master file with the results of its investigations.

Recommendations

Our recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.

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