183 Penalty rates and probability of fraud detection are among the most important factors shaping taxpayer’s compliance. While the first of those factors may be directly controlled by tax authorities the second is usually indirectly influenced by the amount and efficiency of resources employed to detect tax evasion (Allingham, Sandmo 1972, p. 330). In order to increase fraud detection rate tax authorities may implement diversified strategies. They include inter alia the application of various methods to select taxpayers for tax audits. In most of the cases these methods are used interchangeably or complement each other. Although applied quite often in practice by tax authorities they are comparatively rarely addressed by the economists in their publications. In fact, literature sources on this topic are sparse and published mainly by the OECD. One of the methods used to select taxpayers for tax audits is based on the so-called external risk areas. In Poland, this method was introduced shortly after accession to the European Union as a tool of the external risk management strategy in the public administration. Both this strategy and audit targeting tools have evolved tremendously since its first implementation. This article attempts to evaluate the application of external risk areas to select taxpayers for tax audits in Poland. The author uses various indicators to measure the efficiency of tax audits and compare this efficiency taking into account different tax audit selection methods. https://ijbed.org/details&cid=183 https://ijbed.org/cdn/article_file/2020-12-23-22-34-44-PM.pdf Volume 08 Issue 02 22 2020-11-01 2020-12-23 no Tax compliance tax audit selection methods external risk management public administration none 5742 61 1 Małgorzata Magdalena Hybka Department of Public Finance Poznań University of Economics and Business, Poland