Final answer:
A correspondence examination is a method by which the IRS conducts an audit through mail for one or two specific questions on a return. This process gained particular attention post-2013 due to a congressional investigation into IRS practices. Tax compliance remains crucial as tax revenues are key for governmental financing.
Step-by-step explanation:
When the IRS examiner questions only a few items on a selected return, such as one or two issues, the examination is usually handled through a process known as a correspondence examination. This is a less invasive audit procedure where the IRS sends letters to taxpayers requesting additional information or clarification on specific points of the tax return. This type of inquiry might include requests for receipts or documentation regarding reported deductions or income.
The importance of the correspondence examination comes to light when considering the historical context of IRS scrutiny. In 2013, following an outcry from Congress over allegations that the IRS was targeting specific groups for extra scrutiny, the House Committee on Oversight and Government Reform undertook a thorough investigation into the agency's practices. Although the likelihood of being audited has decreased, especially for high-income individuals due to less governmental resources being allocated for such endeavors, the IRS still conducts audits to ensure compliance with tax laws and proper reporting of income, which is fundamental for financing governmental operations.
Every year, U.S. citizens and residents face their most direct interaction with the government when they file their income tax forms, such as the 1040EZ. The accurate reporting on these forms is crucial since the government relies on tax revenues to fund a variety of services and purchases crucial for the functioning of the country.