Court filing
TIGTA Report 2022-16-069 — Reporting on IRS Coronavirus Response Funding Use Could Be Enhanced
Record facts
| Court | Treasury Inspector General for Tax Administration (TIGTA) |
|---|---|
| Filed | 2022-09-22 |
Summary
A final audit report of the Treasury Inspector General for Tax Administration, Report Number 2022-16-069, issued September 22, 2022 to the Commissioner of Internal Revenue. It evaluates the controls the IRS put in place over the $3.1 billion in appropriated funds received for coronavirus response efforts, updating an earlier interim report through September 30, 2021. The report states that as of that date the IRS had spent $1.7 billion, or 55 percent, with $1.4 billion still available, and that quarterly updates to Congress on CARES Act and Consolidated Appropriations Act, 2021 spending were not routinely provided as required. It adds that the updates given did not compare budgeted amounts to actual spending by requirement area, while a review of 93 procurement actions found funds generally used for their specified purpose.
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Full text
1
Reporting on the Use of Coronavirus
Response Funding Could Be Enhanced
September 22, 2022
Report Number: 2022-16-069
TIGTACommunications@tigta.treas.gov | www.treasury.gov/tigta
TREASURY INSPECTOR GENERAL FOR TAX ADMINISTRATION
HIGHLIGHTS: Reporting on the Use of Coronavirus Response Funding Could Be Enhanced
Final Audit Report issued on September 22, 2022
Report Number 2022-16-069
Why TIGTA Did This Audit
This audit is one in a series of
audits being conducted by TIGTA
as part of our oversight of the IRS’s
response to the coronavirus
pandemic. The overall objective
of this audit was to evaluate
controls implemented by the IRS
to ensure that the $3.1 billion in
appropriated funds received for its
coronavirus response efforts is
adequately tracked and used only
for its specified purpose.
TIGTA previously issued an
interim audit report that addressed
the status of the IRS’s coronavirus
response funding as of
September 30, 2020. This report
provides updated information
through September 30, 2021.
Impact on Tax Administration
The IRS received $3.1 billion for its
coronavirus response efforts. Key
components of the response
include issuing Economic Impact
Payments to provide Americans
with economic relief and funding
IRS programs that focus on
helping taxpayers understand and
meet their tax obligations.
What TIGTA Found
As of September 30, 2021, the IRS has spent $1.7 billion of the
$3.1 billion in appropriated funds it received for its coronavirus
response efforts, with $1.4 billion still available for use.
Our review identified several areas in which reporting over
coronavirus response funding could be enhanced. Specifically, TIGTA
found that quarterly updates were not routinely provided to
Congress, as required, on how the IRS spent Coronavirus Aid, Relief,
and Economic Security (CARES) Act and the Consolidated
Appropriations Act, 2021 funding. In addition, updates that were
provided contained limited information and did not allow for a
comparison of budgeted amounts to actual spending by requirement
area. The updates also contained inconsistent information on
staffing needs.
TIGTA’s review of 93 procurement actions using coronavirus response
funds found that generally the funds were used for their specified
purpose. Each of the four enacted appropriations that provided the
IRS a total of $3.1 billion to address coronavirus response efforts
specified the amount of supplemental funding provided, the period
of availability, and the intended purpose of the funding. Additionally,
because the funding from the Consolidated Appropriations Act, 2021
and a portion of the CARES Act were supplemental appropriations to
the IRS’s regular annual appropriations accounts, these supplemental
funds are available for any purpose for which the regular
appropriations are available.
What TIGTA Recommended
TIGTA recommended that the Chief Financial Officer evaluate the
feasibility of expanding the information captured in the IRS’s financial
tracking system to include tracking budgeted and dedicated staffing
by spend plan requirement area for future sources of supplemental
funding.
The IRS agreed with this recommendation and plans to develop a
plan for tracking and reporting on budget, spending, and staffing
associated with future sources of supplemental funding.
U.S. DEPARTMENT OF THE TREASURY
WASHINGTON, D.C. 20024
TREASURY INSPECTOR GENERAL
FOR TAX ADMINISTRATION
September 22, 2022
MEMORANDUM FOR: COMMISSIONER OF INTERNAL REVENUE
FROM:
Heather M. Hill
Deputy Inspector General for Audit
SUBJECT:
Final Audit Report – Reporting on the Use of Coronavirus Response
Funding Could Be Enhanced (Audit # 202110624)
This report presents the results of our review to evaluate controls implemented by the Internal
Revenue Service (IRS) to ensure that the $3.1 billion in appropriated funds received for its
coronavirus response efforts is adequately tracked and used only for its specified purpose.
The Treasury Inspector General for Tax Administration previously issued an interim audit report
that addressed the status of the IRS’s coronavirus response funding as of September 30, 2020.
This report provides updated information through September 30, 2021. This review is part of
our Fiscal Year 2022 Annual Audit Plan and addresses the major management and performance
challenge of Administration of Tax Law Changes and Pandemic Relief Benefits.
Management’s complete response to the draft report is included as Appendix IV
Copies of this report are also being sent to the IRS managers affected by the report
recommendation. If you have any questions, please contact me or Bryce Kisler, Acting Assistant
Inspector General for Audit (Management Services and Exempt Organizations).
Reporting on the Use of Coronavirus Response Funding Could Be Enhanced
Table of Contents
Background .....................................................................................................................................Page 1
Results of Review .......................................................................................................................Page 2
Status of Coronavirus Response Funding ...................................................................Page 2
Timely and Comprehensive Information on Planned and
Actual Coronavirus Response Spending Was Not
Routinely Provided to Congress .....................................................................................Page 4
Recommendation 1: ...................................................................Page 6
Coronavirus Response Funds Reviewed Were Generally
Used for Their Specified Purpose ...................................................................................Page 7
Appendices
Appendix I – Detailed Objective, Scope, and Methodology ................................Page 8
Appendix II – IRS Coronavirus Response Funding ..................................................Page 10
Appendix III – Coronavirus Response Funding Spend Plan
Requirement Areas ..............................................................................................................Page 11
Appendix IV – Management’s Response to the Draft Report .............................Page 13
Appendix V – Abbreviations.............................................................................................Page 16
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Reporting on the Use of Coronavirus Response Funding Could Be Enhanced
Background
In Fiscal Year (FY) 2020, as part of the Coronavirus Aid, Relief, and Economic Security (CARES)
Act, Title II and Title V, the Internal Revenue Service (IRS) received $750.7 million in appropriated
funds for spending related to its coronavirus response efforts.1 The IRS received an additional
$15 million as part of emergency supplemental appropriations for FY 2020 under the Families
First Coronavirus Response Act (FFCRA), for a total of $765.7 million.2 The IRS had the option of
using any of the CARES Act funds in either FY 2020 or FY 2021, while the FFCRA funds can be
spent through FY 2022.
In December 2020, as part of the Consolidated Appropriations Act, 2021 the IRS received further
appropriated funding of $509 million to carry out the recovery rebates, also referred to as
Economic Impact Payments (EIP), and to address coronavirus-related tax administration issues.3
The Consolidated Appropriations Act, 2021 funds were to remain available until the end of
FY 2021.
Both the CARES Act and the Consolidated Appropriations Act, 2021 include a reporting
requirement that 1) a spend plan must be submitted to Congress detailing the expected use of
the coronavirus response funding and 2) quarterly reports are required to be submitted to
Congress detailing the actual expenditure of coronavirus response funding.4 In addition,
transfers of funding between appropriations require advance congressional notification.
In March 2021, as part of the American Rescue Plan Act of 2021 (ARPA), the IRS received
$1.8 billion for the administration of the advance payments of the Child Tax Credit (CTC), the
provision of taxpayer assistance, and the furtherance of integrated, modernized, and secure IRS
systems.5 Unlike the other appropriated funding, the ARPA did not outline specific reporting
requirements relating to this supplemental funding. However, all coronavirus response funding
the IRS received was included in its reports that the Department of the Treasury (hereafter
referred to as the Treasury) provided to Congress.
Figure 1 illustrates the process used in reporting on the $3.1 billion in appropriated funding the
IRS received during FYs 2020 and 2021 for the coronavirus response efforts.
1 Pub. L. No. 116-136, 134 Stat. 281 (codified as amended in scattered sections of 2, 5, 12, 15, 20, 21, 29, 42, and
45 U.S.C.). Funding designated for Taxpayer Services, Enforcement, Operations Support, and an Administrative
Provision. Funds will remain available until September 30, 2021.
2 Pub. L. No. 116-127, 134 Stat. 178 (codified in scattered sections of 7, 26, 29, and 41 U.S.C.). Funds will remain
available until September 30, 2022.
3 Pub. L. No. 116–260, 132 Stat. 1182 (2020). Funds will remain available until September 30, 2021.
4 The Secretary of the Treasury is responsible for this reporting.
5 Pub. L. No. 117-2, 135 Stat. 4 (codified in scattered sections of 7, 12, 15, 19, 20, 26, 29, 42, and 45 U.S.C.). Funds of
$1,464,500,000 will remain available until September 30, 2023, for necessary expenses for the IRS’s administration of
the advance payments of the CTC, the provision of taxpayer assistance, and the furtherance of integrated,
modernized, and secure IRS systems. Funds of $397,200,000 will remain available until September 30, 2022, for
necessary expenses for the IRS to carry out advance payments of the CTC.
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Reporting on the Use of Coronavirus Response Funding Could Be Enhanced
Figure 1: Process Used in Reporting on Coronavirus Response Funding
Source: Treasury Inspector General for Tax Administration (TIGTA) analysis of the CARES Act; the FFCRA;
the Consolidated Appropriations Act, 2021; and the ARPA.
TIGTA previously issued an interim audit report that addressed the status of the IRS’s
coronavirus response funding as of September 30, 2020.6 This report provides updated
information through September 30, 2021.
Results of Review
As of September 30, 2021, the IRS has spent approximately 55 percent of its coronavirus
response funds. Our review identified several areas in which reporting over coronavirus
response funding could be enhanced. Specifically, we found that Congress was not routinely
provided quarterly updates, as required, on how the IRS spent CARES Act and the Consolidated
Appropriations Act, 2021 funding. In addition, updates that were provided contained only
limited information and did not allow for a comparison of budgeted amounts to actual spending
by requirement area.
Status of Coronavirus Response Funding
As of September 30, 2021, the IRS has spent $1.7 billion (55 percent) of the $3.1 billion in
appropriated funds it received for its coronavirus response efforts, with $1.4 billion still available
for use. Specifically, the IRS has spent:
•
$750,119,312, or 99.9 percent, of the CARES Act funding by its FY 2021 deadline.
•
$502,124,498, or 98.6 percent, of the Consolidated Appropriations Act, 2021 funding by
its FY 2021 deadline.
•
$14,988,400, or 99.9 percent, of the FFCRA funding and has until the end of FY 2022 to
spend the remaining $11,600.
6 TIGTA, Report No. 2021-16-026, Interim Report – Status of Coronavirus Response Funding (May 2021).
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Reporting on the Use of Coronavirus Response Funding Could Be Enhanced
•
$453,224, 311, or 24.3 percent, of the ARPA funding and has until the end of FY 2022 to
spend $206,306,864 and the end of FY 2023 to spend the remaining $1,202,168,825.
Figure 2 provides a status of the IRS’s coronavirus response funding received, funds obligated,
and funds remaining as of September 30, 2021.
Figure 2: Status of IRS Coronavirus Response Spending
Source: IRS Coronavirus Response Funding Report to the Office of Management and Budget through
September 30, 2021. (Note: EIP3 refers to the third round of Economic Impact Payments.)
In our interim audit report, we stated that a spend plan was submitted to Congress describing
the IRS’s planned use of the $765.7 million in coronavirus response funding it received in
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Reporting on the Use of Coronavirus Response Funding Could Be Enhanced
FY 2020. On December 7, 2021, Congress was provided updated coronavirus response funding
spend plans as of September 30, 2021. These spend plans identified all coronavirus-related
funding received through the CARES Act; the FFCRA; the Consolidated Appropriations Act, 2021;
and the ARPA. The spend plans specified the intended use of the funding by requirement area
and provided an estimated cost for each area. Appendix III outlines the major requirement
areas listed in the IRS’s spend plans.
Timely and Comprehensive Information on Planned and Actual Coronavirus
Response Spending Was Not Routinely Provided to Congress
In our interim report, we noted that updates were not routinely provided to Congress, as
required, on how the coronavirus response funding that the IRS received through the CARES Act
and the Consolidated Appropriations Act, 2021 was spent. We also found that Congress was
not provided a quarterly report of the IRS’s actual coronavirus response funding expenditures
(hereafter referred to as a “spending report”) through June 30, 2020, as required. The first
quarterly spending report was provided to Congress in December 2020 for expenditures
through September 30, 2020.
Our subsequent work found that Congress was again not routinely provided quarterly updates,
as required, on how the CARES Act and the Consolidated Appropriations Act, 2021 funding that
the IRS received was spent.7 The IRS provides coronavirus spending information to the Treasury,
which in turn provides the spending reports to Congress. The Treasury Office of Budget
acknowledged that quarterly reports were not always provided to Congress when required.
However, the Treasury Office of Budget informed us that the Treasury had frequent meetings
with congressional stakeholders as well as provided weekly coronavirus response funding
obligation and outlay reports to the Office of Management and Budget. Figure 3 indicates the
timing of the IRS spending reports issued to Congress.
7 The FFCRA and the ARPA did not specifically include a quarterly reporting requirement.
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Reporting on the Use of Coronavirus Response Funding Could Be Enhanced
Figure 3: Analysis of IRS Quarterly Coronavirus Spending Reports Issued to Congress
Source: TIGTA analysis of IRS quarterly coronavirus spending reports.
The Treasury Office of Budget further advised us that it provided coronavirus response funding
information through various channels in addition to the quarterly spending reports. For
example, the Treasury Office of Budget periodically provided Treasury-wide coronavirus
response spending reports to Congress. Our review of these reports indicated that they were at
a very high level and included only total coronavirus funding and spending by appropriation but
did not include a breakdown of funding or spending specifically for the CARES Act and the
Consolidated Appropriations Act, 2021.
Coronavirus spending reports did not allow for a comparison of budgeted amounts to the
actual spending and contained inconsistent information on staffing needs
The IRS is not reporting actual expenditures or staffing needs by requirement area. Our interim
report identified that, in developing its various coronavirus response spend plans, the IRS
identified requirement areas in which the funds would be used and included a cost estimate for
each requirement. Specifically, the September 30, 2020, updated CARES Act and FFCRA spend
plan identified 18 requirement areas. We previously reported that the IRS should consider
reporting actual expenditures by requirement area as well to provide IRS management and
Congress with complete information to compare budgeted amounts to actual spending at the
requirement area level. However, our subsequent work identified that the actual expenditures
for the Consolidated Appropriations Act, 2021 and the ARPA were again only reported at the
appropriation level.
Our interim report also noted that, although the IRS included an estimate of the full-time
equivalent (FTE) employees needed for its coronavirus response efforts in its May 27, 2020,
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Reporting on the Use of Coronavirus Response Funding Could Be Enhanced
spend plan, the FTEs needed to accomplish each requirement area and information on the FTEs
budgeted and realized by requirement area were not included in any of its subsequent budget
updates. We reported that the IRS should consider improving its coronavirus response funding
reporting by including information on FTEs (budgeted and dedicated) by requirement area in its
quarterly spending reports. This additional tracking would allow IRS management and Congress
to better validate the reliability of FTE estimates. Our subsequent work identified that the IRS
reported no information on FTEs needed or utilized by requirement area on its spend plans or
spending reports submitted after our interim review.
The Government Accountability Office’s Standards for Internal Control in the Federal
Government notes that management needs to have quality information to make informed
decisions and evaluate the entity’s performance in achieving key objectives and addressing
risks.8 It further defines quality information as information that is complete, reliable, and
provided on a timely basis.
Because the IRS does not track either coronavirus response funding and spending or FTEs
(budgeted and dedicated) by the requirement areas outlined in the coronavirus spend plan in its
financial tracking system, it requires significant effort to gather and report this type of
information. The IRS also noted that the congressional reporting requirements for coronavirus
response funding do not specify a reporting format.
The lack of timely and comprehensive information on planned and actual spending of
coronavirus response funding reduces the ability of stakeholders to meet their oversight
responsibilities. In addition, by not tracking actual expenditures by requirement area, neither
the IRS nor external stakeholders are able to validate the reliability of estimates, quickly identify
requirement areas with potential shortages or surpluses of funds, or timely reallocate funds as
needed.
Recommendation 1: The Chief Financial Officer should evaluate the feasibility of expanding
the information captured in the IRS’s financial tracking system to include tracking budgeted and
dedicated staffing by spend plan requirement area for future sources of supplemental funding.
Management’s Response: The IRS agreed with this recommendation and plans to
develop a plan for tracking and reporting on budget, spending, and FTE associated with
future sources of supplemental funding. This will include development of a financial
coding structure that will allow for reports to be pulled directly from the financial system.
The IRS will evaluate the feasibility of this process with the Inflation Reduction Act.
However, IRS management disagreed that they did not routinely provide timely and
comprehensive information to Congress. IRS management stated that, in most cases
when the Treasury did not provide a quarterly report to Congress in the form of the
spend plan, it was because it provided coronavirus obligation updates to Congress
through different channels on or around the same time that a quarterly report was due.
Additionally, IRS management did not agree with TIGTA’s concerns that the level of
detail included in the reports to Congress was insufficient and stated that the level of
detail required for coronavirus spending reports was never prescribed by Congress.
8 Government Accountability Office, GAO-14-704G, Standards for Internal Control in the Federal Government
(Sept. 2014).
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Office of Audit Comment: We recognize that the IRS and the Treasury provided
periodic information on coronavirus spending information to Congress through
various channels and responded to ad hoc requests for information on spending.
However, we do not believe these actions negated the IRS and the Treasury’s
responsibility to provide legislatively mandated quarterly reporting on the
CARES Act and the Consolidated Appropriations Act, 2021 spending in a
consistent manner.
For example, although the Treasury Office of Budget did periodically provide
Treasury-wide coronavirus response spending reports to Congress, our review of
these reports indicated that they were at a very high level and included only total
coronavirus funding and spending by program. The reports did not include a
breakdown of funding or spending specifically for the CARES Act and the
Consolidated Appropriations Act, 2021 as is contained in the mandated quarterly
reports we reviewed.
Coronavirus Response Funds Reviewed Were Generally Used for Their
Specified Purpose
Our review of a judgmental sample9 of 93 procurement actions from the population of
procurement actions awarded between April 1, 2020, and September 30, 2021, found that
coronavirus response funds were generally used for their specified purpose. Each of the
four enacted appropriations that provided the IRS a total of $3.1 billion to address coronavirus
response efforts specified the amount of supplemental funding provided, the period of
availability, and the intended purpose of the funding. Additionally, because the funding from
the Consolidated Appropriations Act, 2021 and a portion of the CARES Act were supplemental
appropriations to the IRS’s regular annual appropriations accounts, these supplemental funds
are available for any purpose for which the regular appropriations are available. Appendix II lists
the specified purpose for each enacted appropriation.
During our review, we identified purchases totaling $29 million that were made in
September 2021 for almost 13,000 laptops, various peripherals, and contractor support related
to the IRS’s planned FY 2022 new hire initiative. We raised concerns to IRS management
regarding the timing of these purchases occurring near the end of the period of availability for
funds expiring in FY 2021.
After notifying the IRS of our concern, IRS management provided further documentation related
to these purchases. However, due to the timing, we were unable to properly evaluate it. The IRS
has agreed to further evaluate the timing of these purchases and to take action to resolve any
issues that may arise. We will continue to monitor the IRS’s use of coronavirus-related funding.
9 A judgmental sample is a nonprobability sample, the results of which cannot be used to project to the population.
Our judgmental sample was comprised of an initial sample of 50 procurement actions from a population of
1,474 procurement actions awarded between April 1, 2020, and June 30, 2021, and a follow-up judgmental sample of
23 procurement actions from a population of 1,402 procurement actions awarded between April 1, 2021, and
September 30, 2021.
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Appendix I
Detailed Objective, Scope, and Methodology
The overall objective of this audit was to evaluate controls implemented by the IRS to ensure
that the $3.1 billion in appropriated funds received for its coronavirus response efforts is
adequately tracked and used only for its specified purpose. To accomplish our objective, we:
•
Identified and reviewed relevant policies and procedures over the tracking and reporting
of coronavirus response funding by the IRS.
•
Analyzed the methodology used by the IRS in 1) developing its coronavirus response
funding spend plan and 2) monitoring the plan’s execution.
•
Reviewed any guidance provided by the Chief Financial Officer on developing estimates
for the coronavirus response spend plan.
•
Evaluated the status of the IRS’s coronavirus response funding as of September 30, 2021.
•
Reviewed the use of coronavirus response funding and determined whether the funds
were used for their specified purpose and spending was directly related to the IRS’s
coronavirus response efforts and consistent with the IRS coronavirus response spend
plan.
o Sample 1 – Selected a judgmental sample of 50 procurement actions with a
modification amount greater than $0, from a population of 1,474 procurement
actions awarded between April 1, 2020, and June 30, 2021, using coronavirus
response funding totaling $443 million. The 50 cases were randomly selected.
o Sample 2 – Selected a follow-up judgmental sample of 23 procurement
actions with a modification amount greater than $0, from a population of
1,402 procurement actions awarded between April 1, 2021, and
September 30, 2021, using coronavirus response funding totaling $378 million.
We selected all procurement actions identified as having Facilities Management
as the cost center and chairs/seating/furniture and flooring in the procurement.
o Sample 3 – Selected a judgmental sample of 20 procurement actions, from a
population of 397 procurement actions awarded between September 1, 2021,
and September 30, 2021, using the CARES Act and the Consolidated
Appropriations Act, 2021 appropriated funding totaling $75 million. These funds
were only available through FY 2021. We identified all procurement-funded
programs with a total $5 million or more in total modifications occurring during
our sample period and then selected all individual procurement actions greater
than $1 million in those programs for review.
o Other Sample Information: We utilized judgmental sampling because we wanted
to identify procurement areas with indications of improper use of coronavirus
response funding. We expanded our sampling to follow up on select areas. We
also focused on high-dollar transactions occurring at the end of FY 2021 using
the CARES Act and the Consolidated Appropriations Act, 2021 appropriated
funding. We did not include any actions with a $0 modification in the
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populations identified for our samples. We compared the procurement actions
selected in our samples and ensured that there was no overlap.
Performance of This Review
This review was performed with information obtained from the Office of the Chief Financial
Officer located in Washington, D.C., during the period May 2021 through May 2022. We
conducted this performance audit in accordance with generally accepted government auditing
standards. Those standards require that we plan and perform the audit to obtain sufficient,
appropriate evidence to provide a reasonable basis for our findings and conclusions based on
our audit objective. We believe that the evidence obtained provides a reasonable basis for our
findings and conclusions based on our audit objective.
Major contributors to the report were Bryce Kisler, Acting Assistant Inspector General for Audit
(Management Services and Exempt Organizations); LaToya George, Director; Anthony Choma,
Audit Manager; Kanika Kals, Lead Auditor; and Carolyn deGuzman, Auditor.
Validity and Reliability of Data From Computer-Based Systems
We performed tests to assess the reliability of the data from the Integrated Financial System.
We evaluated the data by 1) performing electronic testing of required data elements,
2) reviewing existing information about the data and the system that produced them, and
3) interviewing agency officials knowledgeable about the data. We determined that the data
were sufficiently reliable for purposes of this report.
Internal Controls Methodology
Internal controls relate to management’s plans, methods, and procedures used to meet their
mission, goals, and objectives. Internal controls include the processes and procedures for
planning, organizing, directing, and controlling program operations. They include the systems
for measuring, reporting, and monitoring program performance. We determined that the
following internal controls were relevant to our audit objective: the IRS’s policies and
procedures for estimating program costs related to its coronavirus response efforts, tracking
coronavirus response funding, and reporting to stakeholders on its coronavirus response
spending. We evaluated these controls by interviewing IRS management, analyzing statutory
reporting requirements, and reviewing documentation supporting the process used to estimate
and track coronavirus response spending through FY 2021.
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Appendix II
IRS Coronavirus Response Funding
This appendix presents the specified supplemental funding provided, the period of availability,
and the intended purposes of the funding for each of the four acts that provided the IRS a total
of $3.1 billion to address its coronavirus response efforts.
•
$750.7 million from the CARES Act, Title II and Title V, available through FY 2021.
o $500.7 million for the purpose of carrying out rebates to taxpayers (Title II
funding).
o $250 million for the purpose of administrative costs such as programming,
applications, and systems and service calls/taxpayer support (Title V funding).
•
$15 million from the FFCRA, available through FY 2022.
o $15 million intended for the continuity of operations, including initiatives to
“telework enable” customer service representatives.
•
$509 million from the Consolidated Appropriations Act, 2021 available through FY 2021.
o $175.3 million intended for costs relevant to EIP2 and tax law changes.1
o $333.7 million intended for costs relevant to business resumption, such as
taxpayer digital communications and information technology requirements to
address the impact of the coronavirus pandemic.
•
$1.8 billion from the ARPA, with over $397 million available through FY 2022 and over
$1.4 billion available through FY 2023.
o $1 billion from the appropriated amount intended for the costs relevant to
integrate, modernize, and secure IRS systems.
o $464.5 million intended for costs relevant to EIP3, such as EIP-related taxpayer
services and printing/postage/information notices.2
o $397.2 million intended for costs relevant to the Tax Year 2021 Advance CTC,
such as CTC-related taxpayer services and information technology requirements
to implement the Advance CTC.
1 EIP2 refers to the second round of Economic Impact Payments.
2 EIP3 refers to the third round of Economic Impact Payments.
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Appendix III
Coronavirus Response Funding Spend Plan Requirement Areas
This appendix presents the major requirement areas listed in the IRS’s spend plans for each act:1
•
CARES Act and FFCRA Spend Plan – 16 total requirement areas, including:
o $220 million for Service Calls and Taxpayer Support
o $149 million for Programming, Applications, and Systems
o $104 million for Printing/Postage/Information Notices Stimulus Rebate
o $91 million for Stimulus Return Processing
o $61 million for Verification and Collection
o $38 million for Paper Check Issuance
o $31 million for Other Needs Including Ensuring Facilities Are Safe for Employees
o $22 million for Continuity of Operations – CARES Act
o $15 million for Continuity of Operations – FFCRA
o $8 million for Special Act/Retention Incentive Awards and Overtime
o $8 million for Information Technology Additional Labor Needs
o $7 million for Expanded Fraud and Identity Theft Detection
•
Consolidated Appropriations Act, 2021 Spend Plan – 12 total requirement areas,
including:
o $154 million for Information Technology Requirements to Address the
Coronavirus Pandemic
o $144 million for Resolving the Return and Correspondence Backlog
o $76 million for Printing/Postage/Information Notices
o $59 million for EIP2 Telephone Service
o $20 million for Paper Check Issuance
o $20 million for Information Technology Systems Update
o $15 million for Wage and Investment Process Improvements
o $11 million for Electronic Personnel Folders Support
o $6 million for Space Alterations for Business Resumption
1 We listed the spend plan requirement areas as of September 30, 2021, with greater than $5 million in total funding
budgeted.
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•
ARPA CTC – eight total requirement areas, including:
o $148 million for CTC-Related Taxpayer Services
o $100 million for Information Technology Requirements to Implement the
Advance CTC
o $57 million for Secure Access Digital Identity
o $48 million for Printing/Postage/Information Notices
o $18 million for Printing/Postage for Postcards to Promote Understanding
o $14 million for Paper Check Issuance
o $9 million for Human Capital Office Support for Expanded Workforce
•
ARPA EIP3 – six total requirement areas, including:
o $191 million for EIP3-Related Taxpayer Services
o $121 million for Information Technology Requirements to Address Advance EIP3
o $105 million for Printing/Postage/Information Notices
o $23 million for Paper Check Issuance
o $20 million for Social Security Administration Support
•
ARPA Integrate, Modernize and Secure IRS Systems – five total requirement areas,
including:
o $260 million for Enhanced Taxpayer/Customer Experience
o $230 million for Data Integration
o $205 million for Systems Security
o $205 million for Legacy Systems Modernization
o $100 million for Infrastructure
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Appendix IV
Management’s Response to the Draft Report
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Appendix V
Abbreviations
ARPA
American Rescue Plan Act of 2021
CARES
Coronavirus Aid, Relief, and Economic Security
CTC
Child Tax Credit
EIP
Economic Impact Payment
FFCRA
Families First Coronavirus Response Act
FTE
Full-Time Equivalent
FY
Fiscal Year
IRS
Internal Revenue Service
TIGTA
Treasury Inspector General for Tax Administration
To report fraud, waste, or abuse,
call our toll-free hotline at:
(800) 366-4484
By Web:
www.treasury.gov/tigta/
Or Write:
Treasury Inspector General for Tax Administration
P.O. Box 589
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