Audit activities help ensure taxpayers pay the right amount of tax and help address the net $385 billion tax gap—the difference between the amount of taxes paid voluntarily and on time, and the amount owed. Audit programs in Internal Revenue Service’s (IRS) Wage and Investment division (W&I) mainly cover refundable credits reported on the Form 1040, Individual Income Tax Return. The hundreds of thousands of taxpayers whom W&I interacts with annually during audits make it critical to apply the tax law fairly. Unfair selection would increase burden on taxpayers and reduce public confidence in IRS. This book reviews and describes the W&I process for selecting tax returns for audit, and determines how well W&I's audit selection procedures support its mission and goal to apply the tax law with integrity and fairness to all. This book also describes IRS’s processes and controls for selecting Small Business/Self-Employed (SB/SE) taxpayers for audit; and determines how well SB/SE’s selection processes and controls support its mission to apply the tax law with integrity and fairness to all.