The audit examined the process by which the IRS Office of Chief Counsel develops tax guidance, including a pilot guidance program to request and evaluate public submissions before considering changes to existing regulations.

The Senate Finance Committee requested the review after news articles questioned whether the pilot program was putting special interest before the public's interest when developing tax guidance.

The audit makes seven recommendations to IRS, including expanding written procedures for developing and monitoring the guidance business plan, issuing more frequent updates to and establishing a reasonable expectation in the Priority Guidance Plan, and improving recordkeeping.

"We believe the pilot program does not present an increased risk of influence by special interest groups in the selection of guidance projects," TIGTA Inspector General J. Russell George said. "The pilot program did not directly create tax guidance or circumvent existing internal controls."

Additional highlights and the full audit can be found on www.tigta.treas.gov. Details of the recommendations, and the IRS's response, can be found in the PDF file, "The Public Guidance Program Needs Additional Controls to Minimize Risks and Increase Public Awareness."

For more information:

• The letter of request from the Senate Finance Committee
• TIGTA's March 2003 audit of the published guidance process
• March 2007 New York Times article on the published guidance program