(CNNMoney) — The dreaded process of getting an audit could soon take place over a computer screen in the comfort of your living room. In what could be an indication of things to come, the IRS launched a pilot program at the end of last year that allows taxpayers to use two-way video conferencing for assistance with tax questions and problems. The Taxpayer Advocate Service, an independent watchdog arm of the IRS, is already calling for the agency to expand to IRS virtual audits. The IRS says it needs to evaluate the success of the pilot program before making a decision.

The pilot program is currently being tested in 12 locations, where taxpayers needing assistance can log into a computer enabled with video-conferencing. They can then talk to an IRS agent who pops up on the screen to discuss whatever issues they’re having — whether it’s help preparing a tax form or a question about a refund.

TAS is also piloting a virtual assistance program. And Nina Olson, the head of TAS, wrote in a blog post this week that this technology has the potential to “radically transform” the current audit process — eventually allowing taxpayers to use their personal computers to video conference with an IRS examiner. To schedule an audit, the IRS would send a taxpayer a sign-in code so they could then log in to the meeting from a home or office computer. Documents could be transmitted by simply scanning them with a computer’s built-in camera. This could one day replace the need for correspondence audits, which are the letters the IRS currently sends taxpayers in the mail asking questions or requesting more information.

To save costs, the IRS has become increasingly reliant on correspondence audits instead of summoning taxpayers for in-person meetings. But TAS says that these audits receive fewer responses and that many of the taxpayers dealt with these audits don’t understand how they work, default on payments and get hit with penalties. Plus, with correspondence audits a specific representative typically isn’t assigned to a case, leaving many taxpayers without a point person to ask questions or to contact with concerns.

“Virtual audits could eliminate the confusing paperwork and recreate a face-to-face meeting via computer. Doing this would also help taxpayers better understand why they are being audited and what additional information is needed”, said Olson. “It would also help the IRS obtain the accurate information it needs and help the agency view taxpayers as more than just tax returns.”

The IRS’s virtual assistance pilot program is scheduled to continue through the 2012 filing season and end in May. Office locations include Colorado Springs, Colo., Fresno, Calif. and Utica, N.Y. Once the program is completed, the IRS will evaluate its performance. So far, it said the pilot has allowed it “to maximize our current resources, by expanding hours of service in remote locations and balancing the workload in high-traffic areas.” But it wouldn’t say whether it is considering using this same technology for audits. “The initial focus of virtual delivery is on taxpayer service. We’re still in the middle of the pilot and still assessing the results,” the IRS said in a statement. “It’s premature to speculate about future steps.”

There is much more information on IRS virtual audits on the IRS website.


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