Each year from 1995 through 1998, the Internal Revenue Service (IRS) abated about $30 billion in tax, penalty, and interest assessments in the tax accounts of individuals and businesses. Abatements reduce assessments and can occur for various reasons, from correcting errors made by IRS and taxpayers to providing relief from penalties when taxpayers have reasonable cause for failing to comply with tax requirements. The process for making abatements is important for ensuring the equitable treatment of taxpayers across IRS' 10 service centers and 33 district offices. This report describes (1) IRS' process for making abatements from initiation through final review in selected IRS locations--the Kansas City Service Center, the Fresno Service Center, the Kansas City District Office, and the Northern California District Office--and (2) IRS' efforts to improve the abatement process.

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