How Does The IRS Ensure Tax Credit Compliance?

Tax credit compliance is ensured by the IRS through the audit and review process. Every year the IRS looks at a sampling of returns submitted by taxpayers. The purpose of this process is to determine whether taxpayers are properly filing their tax returns and look for trends and common mistakes.

IRS Review Process

When a taxpayer, whether an individual or business, files their tax return with schedules for credits, the IRS takes note. These returns in it of themselves do not trigger a special review process but will be scrutinized to ensure compliance with the regulations. When information that is incorrect appears on a taxpayer’s form, the IRS will send a follow-up request for clarification or additional supporting material.

IRS Maintains Vigilant Watch

The IRS’s vigilance in this area helps to make sure that a taxpayer does not attempt to take a credit that they do not deserve. A review can be performed at anytime of a taxpayers return and if there is any indication that a taxpayer is not complying with the rules, an audit will be conducted. An IRS audit can involve all past, present and future filings of a taxpayer.


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