In a new report, TIGTA (Treasury Inspector General for Tax Administration) says that IRS audits have led to a substantial number of recommended adjustments to items reported on S corporation returns. (TIGTA Ref. No. 2012-30-062, 6/21/12)
But the number of audits closed with no recommended adjustments (i.e., no-change audits) is higher than it should be. A too-high no-change percentage means too many compliant taxpayers are being burdened by unnecessary audits.
The TIGTA report includes suggestions for improving the means of selecting S corp returns for audits.