Now that IRS audit formulas have been updated to incorporate data from a recent set of random audits they will be doing fewer no-change exams on filers. For tax year 2006 returns, the no change rate is 13% down from 18% five years ago. And the average additional tax recommended per examination also went up 16%.

But the IRS could be even more efficient, according to Treasury inspectors. They found that revenue agents didn't do a very good job of screening tax returns that IRS computers flagged as audit targets. The Service will train its agents better so fewer returns with low audit potential are selected. That way, the Revenue Service can better use its limited resources and stop wasting the time of compliant filers.