This study examines tax audit practice in Ethiopia (the case oj federal govern ment), andrninves tigates key proble ms in tax audit operation regardin g th e appropria teness oj auditrntyp e used, audit rat e, aptness oj audit case selection metho d~ and audit examinationrntechniques used, and the experience and capability oj audit staff resources.rnThe study adopts mixed method approach in order to achieve the research objec tiv"srnand to answer research question s. Specifically, the techn iqu es used in th e study includernsurvey with tax audit ors and in ves tigators, in-depth interviews with tax officials andrntaxpayers , and documentary analysis.rnWith these research l1letho d~, the results oj the study reveal th at tax audit programrnremains undeveloped with slight range oj tax audit activities peljormed targe ting al'llyrnsp ecific risks. The tax audit program is a toddler tool in improving vo l untaryrncompliance and increasingJuture revenue peljorllJance through educating and helpingrntaxpayers to understand th eir tax obligations. The study also shows low audit coverage,rnthe absence oj compliance ris k-based alldit case selection strategy, scarcity oj allditrnresources, tax auditors in particular, and absence oj projicient and experienced teLrrnauditors. In the end, the s tudy Jonvards the possible measures to be taken by thernEthiopian Revenue and Custo ms Authority to mitigate problems in tar audit operatioll.