Enforcement: Information Reporting & Verification

Section 3 of the IRS Data Book presents data on information reporting and verification, which, along with examinations, are critical tools for identifying and resolving taxpayer errors. In addition to receiving information on self-reported income and tax on returns filed by taxpayers, the IRS gathers independent information about income received and taxes withheld from information returns, such as Forms W–2 and 1099 filed by employers and other third parties. With its Automated Underreporter Program, the IRS matches these information returns to tax returns and contacts taxpayers to resolve discrepancies. In the Automated Substitute for Return Program, the IRS uses information returns from third parties to identify nonfilers; construct tax returns for certain nonfilers based on that third-party information; and assess tax, interest, and penalties based on the substitute returns. To further verify the accuracy of reported information, the IRS also checks for mathematical and clerical errors before refunds are paid.

Two charts that show data regarding the IRS Information Reporting Programs, the Automated Substitute for Return Program and the Automated Underreporter Program for fiscal year 2018. The graphs show that the IRS closed more than 3.0 million cases under the Automated Underreporter Program resulting in more than $5.3 billion in additional assessments. It closed 599,000 cases under its Automated Substitute for Return Program, resulting in $685.7 million in additional assessments.

View chart details (XLS). For additional graphs from this section, download the PDF of this year’s Data Book.

Highlights of the Data

  • In Fiscal Year (FY) 2018, the IRS received almost 2.7 billion third party information returns; 86.9 percent were filed electronically (Table 14).
  • The IRS closed more than 3.0 million cases under the Automated Underreporter Program, resulting in more than $5.3 billion in additional assessments (Table 14).
  • For Tax Year 2017 individual income tax returns processed during FY 2018, the IRS sent almost 2.0 million notices to taxpayers for more than 2.4 million math errors identified on their returns (Table 15).

Index of Data Book Tables

Enforcement: Information Reporting and Verification: Tables 14 & 15

Table 14: Information Reporting Program, Fiscal Year 2018 (XLS)

Table 15: Math Errors on Individual Income Tax Returns, by Type of Error, Fiscal Year 2018 (XLS)

 


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