Tax Administration

IRS Preparer Penalty Data Inaccurate and Misleading Gao ID: GGD-90-92 August 15, 1990

Pursuant to a congressional request, GAO reviewed the Internal Revenue Service's (IRS) administration of the return preparer penalty program to determine whether IRS imposed preparer penalties appropriately and consistently.

GAO found that IRS preparer penalty statistics did not accurately reflect preparer noncompliance because IRS: (1) procedures allowed multiple penalties to be abated in one transaction; (2) excluded nonmaster file assessments from preparer penalty statistics and did not accurately account for preparer penalty activity; (3) could not differentiate between different types of penalties; and (4) entered miscoded or erroneous data into its master files.


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