The Federal Board of Revenue (FBR) will electronically examine income tax returns filed for tax year 2026 through a new automated system and give taxpayers an opportunity to correct errors before facing possible legal action.

The system, called Computerised Risk Management (CRM), will identify potential mistakes and discrepancies in tax returns and notify taxpayers through the IRIS portal.

The FBR has introduced the procedure through S.R.O. 2098(I)/2026, amending the Income Tax Rules, 2002, by adding a new Rule 38B for electronic scrutiny and notification of issues detected by the automated system.

Under the new rules, the system will examine returns submitted under Section 120(2A) of the Income Tax Ordinance, 2001. It may issue online notices highlighting possible factual or legal errors and allow taxpayers to explain the differences or make corrections.

Taxpayers will be given at least seven days to respond to an initial notice. If they fail to reply within that period, the system will send a reminder giving them another minimum of seven days to take corrective action or explain the discrepancies.

The relevant Inland Revenue officer may also issue advance notices identifying issues found in a taxpayer’s return.

The FBR will maintain a record of discrepancies, notices issued and responses received through a dedicated dashboard. These details will also be shared with the Inland Revenue officer responsible for the taxpayer’s case.

The officer will review the response, or the absence of one, and determine whether further action is necessary under the applicable tax laws.

The automated system will also handle data analysis, cross-matching, identification of discrepancies and electronic communication with taxpayers. The FBR will implement these functions through a Change Request Form (CRF).