What does the Revenue Agent's Report declare?

The Revenue Agent's Report is a formal document that summarizes the findings of an examination of a taxpayer's return during an audit. It specifically outlines the changes proposed to the taxpayer’s return based on the auditor's review of the financial documents, accuracy of deductions, credits claimed, and any discrepancies found during the audit process. This report serves to inform the taxpayer of any adjustments needed to their tax liability and provides an opportunity for the taxpayer to clarify or contest the findings if necessary.

While the other options refer to important tax-related concepts, they do not encapsulate the primary function of the Revenue Agent's Report. Outstanding balances relate to amounts owed that do not directly stem from an audit's findings. New tax regulations are separate from the specifics provided in a Revenue Agent's Report, as those regulations pertain to changes in tax law rather than direct audit outcomes. Potential audit subjects are considerations for future audits and do not describe what is articulated in a Revenue Agent's Report regarding previous examination results.