Investigation Sought of IRS Audits in State

Rep. Howard P. “Buck” McKeon (R-Santa Clarita) said he will seek a congressional investigation into why Californians are called in for face-to-face audits by the Internal Revenue Service at roughly twice the rate of the rest of the nation. McKeon, who has previously pushed IRS reform legislation, was responding to a report on IRS audit rates released Saturday by a watchdog group. The report found that in Southern California, the nation’s audit capital, 1.6% of taxpayers were called in for face-to-face audits in 1996, compared with 0.66% nationwide. The IRS has defended its practices, saying that audits are triggered by objective criteria that are applied the same way to taxpayers across the country. The agency, already under close congressional scrutiny, said the audits are triggered by income tax returns that claim unusually large deductions, that report income that doesn’t square with W-2 or 1099 forms, or that have other signs of underpayment of taxes.