9 Pages Posted: 3 Jan 2012
Date Written: September 2, 2011
The IRS Audit Techniques Guides (ATGs) focus on developing highly trained examiners for a particular market segment or issue. A market segment may be an industry such as construction or entertainment, a profession like attorneys or real estate agents or an issue like passive activity losses, hobby losses, litigation settlements or executive compensation — fringe benefits. These guides contain examination techniques, common and unique industry issues, business practices, industry terminology, interview questions and procedures and other information to assist examiners in performing examinations.
The ATGs have significantly improved audit efficiency and compliance by focusing on taxpayers as members of particular groups or industries. These groups have been defined by type of business (artists, attorneys, auto body shops, bail bond industry, beauty shops, child care providers, gas stations, grocery stores, entertainers, liquor stores, pizza restaurants, taxicabs, tour bus industry, etc.), technical issues (passive activity losses, alternative minimum tax), and types of taxpayer or method of operation (i.e., cash intensive businesses). As examiners focus on the tax compliance of a particular industry, they have gained experience on specific issues to be examined for a particular type of business, whether or not the issues are set forth on a tax return. Examiners often spend the majority of their time auditing taxpayers in the particular market segment for which the examiner has become a specialist. Some may specialize in examining the construction industry while others may specialize in examining restaurants.
Keywords: ATG, audit technique guides, IRS, badges of fraud, cash intensive business, IRS examination, audit, examination, tax fraud, indirect method of proving income, bank deposit analysis
Suggested Citation: Suggested Citation
Rettig, Charles P., IRS Audit Techniques Guides and Current Tax Enforcement Priorities (September 2, 2011). Journal of Tax Practice and Procedure, p. 25, August-September 2011. Available at SSRN: https://ssrn.com/abstract=1978605