Final answer:
An RAR, or Revenue Agent's Report, is issued by the IRS after an audit and details any adjustments made to a tax return. It can be issued regardless of whether additional taxes are owed. The IRS faces challenges in reducing tax evasion, which could be mitigated through increased monitoring and enforcement. The given statement is true.
Step-by-step explanation:
The term RAR refers to a Revenue Agent's Report, which is an official document issued by an auditor from the Internal Revenue Service (IRS) after the conclusion of an audit. The purpose of the RAR is to detail the findings of the audit, including any adjustments to the tax return that have been made. The issuance of an RAR does not depend on whether the taxpayer owes additional taxes; an RAR can be issued even if there are no changes resulting in additional tax liability.
The IRS is the agency responsible for collecting taxes and minimizing tax evasion. While free riding or tax evasion leads to significant losses for the US Treasury, enhancing enforcement activities could reduce the extent of unpaid taxes. However, these efforts would require the allocation of more resources toward monitoring and enforcement to efficiently tackle the issue of tax gaps caused by non-compliance.