The Virginian-Pilot 
                             THE VIRGINIAN-PILOT 
              Copyright (c) 1995, Landmark Communications, Inc.

DATE: Wednesday, October 25, 1995            TAG: 9510250435
SECTION: FRONT                    PAGE: A13  EDITION: FINAL 
SOURCE: ASSOCIATED PRESS 
DATELINE: WASHINGTON                         LENGTH: Short :   48 lines

IRS WILL DROP RANDOM AUDITS THE 30-YEAR-OLD PROGRAM IS ENDING DUE TO BUDGET CUTS.

If you live in mortal fear of a random tax audit, you may be able to relax a bit - at least for a while.

Bowing to the will of Congress, the Internal Revenue Service says it will drop a feared and hated program of conducting the exhaustive and random audits of tens of thousands of taxpayers each year.

IRS spokesman Frank Keith said Monday the agency decided to ``indefinitely postpone'' the Taxpayer Compliance Measurement Program that was scheduled to start Dec. 1 for 153,000 taxpayers - marking an end to what he said is a 30-year-old program. The audits had been delayed two months while Congress reviewed the IRS budget.

The comprehensive audits, which take up to 30 months, were designed to spot trends to help the IRS target regular audits to where they'll do the most good.

But the Republican-run Congress is moving in a House-Senate conference committee to cut the IRS' 1996 budget from $8.2 billion to $7.4 billion, prompting the agency to cut back on its enforcement programs. Eliminating the TCMP audits will save the IRS $1.5 billion, according to Keith.

``From our point of view as tax administrators, it's a regrettable decision, but unfortunately a necessary one,'' he said.

But taxpayers who underwent the random scrutiny, which required them to prove every item on their return - even producing marriage and birth certificates - have long decried the practice.

House Speaker Newt Gingrich, R-Ga., has compared TCMP audits to the Inquisition.

The battle to end the random full audits was led by former IRS Commissioner Fred T. Goldberg. Organizations representing tax professionals and the National Taxpayers Union Foundation also sought to end the audits.

In defending the program, the IRS cited numerous revenue-raising innovations that came as a result of the TCMP audits, including requiring taxpayers to list Social Security numbers for dependents and get Social Security or taxpayer identification numbers from day-care providers.

KEYWORDS: U.S. INTERNAL REVENUE SERVICE by CNB