Department of Revenue-Audit Division

zzzDepartment ofRevenueAudit DivisionREPORT More Steps Needed ToHIGHLIGHTSPERFORMANCE AUDIT Better Manage LimitedResourcesSubjectTax audits help the Stateidentify additional tax The Audit Division helps ensure that therevenues that are owed State receives the tax money owed to it.to it. Audits also The Department reports that in fiscal yearencourage compliance 2004, the Division conducted more thanwith tax laws, and help37,000 audits and assessed a total ofinstill confidence in the$139 million in additional taxes. fairness of the taxsystem. The three major types of taxes that the type and by type of audit conducted. ForDivision audits are: example, division analyses show thatcorporate income tax audits result in $15Transaction privilege tax, commonly referred in assessments for each $1 spent, whileOur Conclusionto as sales tax. audits of individual income taxes result inThe Division lacks basic Individual income tax. $5 in assessments for each $1 spent. information needed to Corporate income tax.analyze how effectively ituses its audit resources,including the State’s 1 For every $1 spentAudit Assessmentsreturn on investment forauditing corporateFiscal Years 2002 through 2004each type of audit. Theincome tax returns,Division has improved its (Millions of Dollars)the Divisionaudit selectionprocesses, including generates $15.$80increasing its focus on$60high-liability andnoncompliant taxpayers. $40As it prepares to use a The return on ...