IRS now using new NRP Audit Program
July 9, 2004
By Jim Harnsberger, Sr. Tax Analyst

Over the next several months the IRS will begin using its new NRP Audit Program in an effort to begin implementing changes at IRS designed to crack down on taxpayers who may be cheating on their taxes.

The NRP Audit Program (National Research Program) will replace the outdated TCMP type audits; and it is expected to involve as many as 30,000 small business returns during this initial stage.

The purpose of the NRP audits also includes information gathering techniques that are designed to aid in future enforcement, especially aimed at those taxpayers making more than $100,000 or who own and operate a business.

In this new initiative at IRS, tax returns will be selected using a “random” selection method for evaluation. An increase in the number of correspondence audit examinations is expected from this effort, as well as more focused substantiation audits.

Most taxpayers have now begun to see the first signs of these examinations which is likely to continue well into 2005. Most business owners are advised to consider a complete review for potential audit issues to ensure accuracy in all filings.

San Diego based Tax Smart America, a leading tax services company has developed effective counter measures in response to these potential audits; that when employed will reduce the likelihood of an audit in the first place; or the ability to comply with the audit should the return be selected for substantiation measure issues. This “business method” is a part of an ever-growing list of Intellectual Property Assets employed by the company under a business methods patent filed with the USPTO.

The company recently introduced FREE AUDIT REPRESENTATION to any business owner or investor in real estate as a part of its efforts to expand market awareness about the new developing audit trends at IRS.

One of the most significant areas seen by Tax Smart America that has a benefit to business owners is the substantial number of errors and omissions resulting in virtually every business return having a higher degree of probability to recover or reduce prior year taxes through filing amended returns; which as it turns out further reduce the chance of audit selection.

For more information you may contact Tax Smart America, a subsidiary of Smart America Group Enterprises Inc. (SAGE) at 619 469-5800.