Are Current Resources Being Appropriately Shifted to ATS Auditing?
As noted earlier, FTB has already shifted auditing resources from standard audits to ATS-related audits. The Legislature may want to consider directing additional shifts in resources to ATS activity. Such shifts would allow FTB to develop a comprehensive ATS plan more quickly than it otherwise could. However, redirecting staff from standard audits could result in revenue losses in the current and budget years, even though future audit revenues would likely increase as a result. This is because ATS audits require more initial investment in resources than other types of audits and it can take more years to close out these audits and realize the revenues. Should Auditing Resources Be Increased? The federal government has proposed to increase spending on tax compliance during the next year—including spending on ATS enforcement—by increasing its auditing resources. Based on our analysis, FTB might benefit from additional resources in the ATS area as well, in order to allow for the hiring of
