The Federal Board of Revenue (FBR) is launching an automated system to identify errors in income tax returns for the 2026 tax year. The Computerized Risk Management (CRM) system will electronically review filings and notify taxpayers of possible discrepancies or errors before any legal action is taken.
The FBR introduced this mechanism by adding Rule 38B to the Income Tax Rules, 2002, via S.R.O. 2098(I)/2026. This new rule covers the electronic scrutiny of returns and the notification of issues found by the automated system. The system is designed to process returns filed under Section 120(2A) of the Income Tax Ordinance, 2001.
Taxpayers may receive online notices through the IRIS portal highlighting possible factual or legal errors. According to the new rules, taxpayers will have at least seven days to respond to these notices, explain discrepancies, or correct their returns. If no response is received within that timeframe, the system will send a reminder granting another period of at least seven days.
The rules also permit the relevant Inland Revenue officer to issue advance notices regarding discrepancies in a return. A dedicated dashboard will record all identified issues, notices sent, and taxpayer responses, sharing this data with the relevant Inland Revenue officer. That officer will then review the responses—or the lack thereof—to decide if further action is needed under the Income Tax Ordinance, 2001.
The FBR plans to implement the automated scrutiny, data matching, discrepancy identification, and electronic communication process using a Change Request Form (CRF).
