TIGTA Semiannual Report to Congress, October 1, 2021 through March 31, 2022
Summary
This is the Treasury Inspector General for Tax Administration (TIGTA) Semiannual Report to Congress covering October 1, 2021 through March 31, 2022. The Inspector General's message states that TIGTA's Office of Audit completed 29 audits and its Office of Investigations completed 1,228 investigations, with monetary benefits totaling more than $3.4 billion. It says IRS hiring shortfalls, worsened by the COVID-19 pandemic, are resulting in millions of tax returns not being timely processed and refunds not being timely issued. As of November 20, 2021, the IRS reported 7.8 million cases in its Accounts Management inventory, with 56.8 percent of the inventory over-aged.
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Treasury Inspector General for
Tax Administration
(TIGTA)
TIGTA’s Vision
Maintain a highly skilled, proactive, and diverse Inspector General organization
dedicated to working in a collaborative environment with key stakeholders to foster
and promote fair tax administration.
TIGTA’s Mission
Provide quality professional audit, investigative, and inspection and evaluation services that
promote integrity, economy, and efficiency in the administration
of the Nation’s tax system.
TIGTA’s Core Values
Integrity – Maintain the highest professional standards of integrity,
personal responsibility, independence, objectivity, and operational excellence in pursuit of
TIGTA’s mission.
Organizational Innovation – Model innovative practices in organizational structure,
operational programs and processes, audit, investigative, and inspection and evaluation
methodologies, and the application of advanced information technology.
Communication – Achieve effective organizational approaches and solutions by encouraging
open, honest, and respectful communication among TIGTA’s executives, employees,
offices, and functions, as well as between TIGTA and its external stakeholders.
Value Employees – Respect the dignity, contributions, and work-life balance of our employees,
and recognize diversity as fundamental to the strength of our organization.
Commitment to Collaboration – Establish and maintain collaborative and professional
relationships with other Government and non-Government stakeholders.
Inspector General’s Message to Congress
I am pleased to present this Semiannual Report to Congress,
summarizing the accomplishments of the Treasury Inspector
General for Tax Administration (TIGTA) during the period of
October 1, 2021 through March 31, 2022. Some of TIGTA’s
more notable achievements in the pursuit of its mission to
provide oversight of the Internal Revenue Service (IRS) and
protect the integrity of Federal tax administration are highlighted
in the various audits, investigations, and inspections and
evaluations summarized in this report.
During this reporting period, TIGTA’s Office of Audit completed
29 audits, and its Office of Investigations completed 1,228
investigations. In addition, TIGTA’s combined audit and investigative efforts resulted in the
recovery, protection, and identification of monetary benefits totaling more than $3.4 billion.
The IRS continues to experience challenges hiring and retaining an adequate workforce to
meet its workload demands at Tax Processing Centers. Although the IRS has several
initiatives underway to help address its hiring shortages, to date, these initiatives have not
been successful. The IRS hiring shortfalls have been exacerbated as a result of the
Coronavirus Disease 2019 (COVID-19) pandemic and are resulting in millions of tax returns
not being timely processed, refunds not being timely issued, and taxpayers not timely
receiving assistance with tax account issues. Inventory backlogs continued to affect the IRS’s
ability to provide prompt service to taxpayers in the 2021 Filing Season. These backlogs will
likely continue into the 2022 Filing Season and beyond unless the IRS takes steps to address
the challenges causing these backlogs.
Additionally, individual and business taxpayers with tax law and tax account inquiries are
experiencing delays in service due to the over-aged Accounts Management inventory. The
majority of Accounts Management case work is correspondence received from taxpayers via
the mail and involves the Accounts Management function making adjustments to taxpayer
accounts when necessary. As of November 20, 2021, the IRS reported having 7.8 million
cases in its Accounts Management inventory, with 56.8 percent of the inventory being over-
aged, i.e., the cases have not been resolved within established timeframes. TIGTA will
continue to assess IRS’s processes to improve its operations to reduce backlogs and deliver
its Taxpayer Experience Strategy to expand services allowing taxpayers to provide documents
digitally.
TIGTA’s Office of Investigations continues to work with the IRS to prevent and detect scams,
which include the theft of Economic Impact Payments. Similarly, TIGTA continues to
investigate and deter attacks against online IRS applications, as part of its responsibility for
investigating and deterring tax-related cybercrime and disrupting cyber-based schemes by
illicit actors who seek to steal personal identifiers to impersonate taxpayers and IRS
employees.
October 1, 2021 – March 31, 2022 │3
Consistent with TIGTA’s mission, we will work closely with Congress, the Administration, the
IRS, and all of our stakeholders on behalf of taxpayers to ensure that our Nation’s system of
tax administration is efficient, effective, and fair.
Sincerely,
J. Russell George
Inspector General
4│ October 1, 2021 – March 31, 2022
Table of Contents
Inspector General’s Message to Congress ........................................................................................... 3
TIGTA’s Profile ......................................................................................................................................... 7
Statutory Mandate ....................................................................................................................... 7
Organizational Structure .............................................................................................................. 8
Authorities..................................................................................................................................... 8
Pandemic Relief Oversight Efforts ......................................................................................................... 9
Promote the Economy, Efficiency, and Effectiveness of Tax Administration ...................................... 14
Administration of Tax Law Changes ........................................................................................... 14
Enhancing Security Of Taxpayer Data and Protection of IRS Resources ................................. 16
Improving Tax Reporting and Payment Compliance to Reduce the Tax Gap .......................... 18
Improving Customer Service and the Taxpayer Experience ..................................................... 20
Protect the Integrity of Tax Administration ............................................................................................ 22
The Performance Model .............................................................................................................. 22
Performance Area: Employee Integrity....................................................................................... 22
Performance Area: Employee and Infrastructure Security ....................................................... 26
Performance Area: External Attempts to Corrupt Tax Administration ...................................... 28
Advance Oversight of America’s Tax System ........................................................................................ 34
Audit Statistical Reports ......................................................................................................................... 36
Reports With Questioned Costs .................................................................................................. 36
Reports With Recommendations That Funds Be Put to Better Use.......................................... 37
Reports With Additional Quantifiable Impact on Tax Administration ........................................ 38
Investigations Statistical Reports .......................................................................................................... 40
Significant Investigative Achievements ...................................................................................... 40
Summary of Investigative Reports and Criminal Referrals ........................................................ 42
Interference .................................................................................................................................. 42
Instances of Whistleblower Retaliation ...................................................................................... 42
Closed Investigations Involving IRS Senior Government Employees ........................................ 43
Inspections and Evaluations Statistical Reports .................................................................................. 44
Evaluation Reports With Significant Unimplemented Corrective Actions ................................. 44
Appendices
Appendix I – Other Statistical Reports .................................................................................................. 45
Reports With Significant Unimplemented Corrective Actions ................................................... 45
Other Statistical Reports ............................................................................................................. 60
Appendix II – Audit Products ................................................................................................................. 61
Appendix III – TIGTA’s Statutory Reporting Requirements ................................................................... 65
October 1, 2021 – March 31, 2022 │5
Appendix IV – Inspector General Peer Review Activity ......................................................................... 69
Appendix V – Data Tables Provided by the Internal Revenue Service ................................................ 70
Internal Revenue Service Memorandum .................................................................................... 70
Report of Employee Misconduct by Disposition Groups ............................................................ 71
Report of Employee Misconduct National Summary ................................................................. 72
Summary of Substantiated I.R.C. Section 1203 Inquiries Recorded in ALERTS...................... 73
Appendix VI – Section 1203 Standards ................................................................................................ 74
Glossary of Acronyms ............................................................................................................................. 75
6│ October 1, 2021 – March 31, 2022
TIGTA’s Profile
The Treasury Inspector General for Tax Administration (TIGTA) provides audit, investigative,
and inspection and evaluation services that promote economy, efficiency, and integrity in
the administration of the Internal Revenue laws. TIGTA provides independent oversight of
matters of the Department of the Treasury (Treasury Department) involving activities of the
Internal Revenue Service (IRS), the IRS Oversight Board, and the IRS Office of Chief Counsel.
Although TIGTA is placed organizationally within the Treasury Department and reports to the
Secretary of the Treasury and to Congress, it functions independently from all other offices
and bureaus within the Treasury Department.
TIGTA oversees all aspects of activity related to the Federal tax system as administered by
the IRS. TIGTA protects the public’s confidence in the tax system by identifying and
recommending strategies for addressing the IRS’s management challenges and
implementing the priorities of the Treasury Department.
TIGTA’s organizational structure (see following page) is comprised of the Office of the
Inspector General and six functional offices: the Office of Audit; the Office of Inspections
and Evaluations; the Office of Investigations; the Office of Mission Support; the Office of
Information Technology; and the Office of Chief Counsel.
October 1, 2021 – March 31, 2022 │7
Organizational Structure
Authorities
TIGTA has all of the authorities granted under the Inspector General Act of 1978, as amended
(Inspector General Act). 1 In addition to the standard authorities granted to Inspectors
General, TIGTA has access to tax information in the performance of its tax administration
responsibilities. TIGTA also reports potential criminal violations directly to the Department of
Justice when TIGTA deems that it is appropriate to do so. TIGTA and the Commissioner of
Internal Revenue (Commissioner or IRS Commissioner) have established policies and
procedures delineating responsibilities to investigate potential criminal offenses under the
Internal Revenue laws. In addition, the IRS Restructuring and Reform Act of 1998 (RRA 98) 2
amended the Inspector General Act to give TIGTA the statutory authority to carry firearms,
execute search and arrest warrants, serve subpoenas and summonses, and make arrests as
set forth in Internal Revenue Code (I.R.C.) Section (§) 7608(b)(2).
1 5 United States Code (U.S.C.). App. (2018).
2 Pub. L. No. 105-206, 112 Stat. 685 (codified as amended in scattered sections of 2, 5, 16, 19, 22, 23, 26, 31,
38, and 49 U.S.C.).
8│ October 1, 2021 – March 31, 2022
Pandemic Relief Oversight Efforts
The Coronavirus Aid, Relief, and Economic Security Act (CARES Act), the Consolidated
Appropriations Act, 2021, and the American Rescue Plan Act of 2021 were enacted to
address the impact of the coronavirus pandemic on the economy, public health, and State
and local governments. 3 These relief packages also contained numerous tax-related
provisions intended to provide assistance to individuals and businesses. These provisions
have had, and will continue to have, a significant impact on IRS operations and Federal tax
administration. Since the beginning of the pandemic, the IRS has received $3.1 billion in
supplemental funding to plan and execute three rounds of Economic Impact Payments (EIP),
expand multiple tax credits, and modernize and secure IRS systems. Much of this additional
funding will remain available to the IRS through Fiscal Year (FY) 2023.
The following summaries highlight some of the key pandemic-related audits and investigations
completed during this six-month reporting period: 4
The Taxpayer Advocate Service Assisted Thousands of Taxpayers With CARES Act Issues,
but Faced Challenges in Identifying and Tracking Applicable Cases
(Report Number 2022-16-002)
Soon after the IRS began issuing EIPs in response to the CARES Act, the Taxpayer Advocate
Service (TAS) started receiving reports of EIP-related issues. TAS’s statutory mission is to
assist taxpayers in resolving tax problems with the IRS, identify areas in which taxpayers have
problems with the IRS, and make administrative and legislative recommendations to mitigate
tax problems.
TAS has taken numerous actions to assist taxpayers in response to the enactment of the
CARES Act. This includes identifying and addressing CARES Act issues affecting large groups
of taxpayers (Systemic Advocacy) and assisting individual taxpayers (Case Advocacy), as well
as taking other actions to keep the public apprised of CARES Act issues. However, TIGTA
determined that TAS accepted cases that did not meet its criteria and did not properly track
CARES Act issues.
The IRS acted quickly to administer the main provisions of the CARES Act, specifically
concerning the EIPs. While the distribution of the EIPs was mostly successful, EIP-related
problems became apparent early in the process. However, the IRS initially lacked the
capabilities to resolve EIP-related problems. As the IRS began implementing processes to fix
EIP issues, TAS started accepting certain EIP cases in August 2020. TAS records indicated
that it received over 6,000 cases it coded as CARES Act-related and that over 5,000 of these
taxpayers were provided assistance or relief for their issue(s) through the TAS program.
3 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.); Pub. L. No. 116-260, 134 Stat. 1182 (2020); and 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.).
4
The facts in the summarized investigative case narratives come from court documents of the respective
jurisdictions named.
October 1, 2021 – March 31, 2022 │9
Although TAS developed criteria specifying the types of issues it would accept, TIGTA’s review
of a statistical sample of TAS cases showed that 18 percent of the cases accepted did not
meet TAS criteria. In these instances, TAS’s ability to resolve taxpayer problems was limited,
and its resources might have been better spent assisting taxpayers whose issues met its
criteria.
Additionally, TAS cannot accurately identify the number of CARES Act cases received, although
employees were advised to use specific coding to identify cases involving CARES Act issues.
TIGTA reviewed 575 cases that did not include a CARES Act designation code and determined
that 225 cases involved CARES Act issues, but were not coded as such on the Taxpayer
Advocate Management Information System. TIGTA also reviewed a statistical sample of
110 cases designated as CARES Act related and determined that five cases were coded as
having CARES Act issues when they did not. TAS management agreed and has corrected the
miscoded cases.
TIGTA recommended that the National Taxpayer Advocate reinforce existing guidance to
ensure that TAS employees are adhering to guidance concerning contacts not meeting TAS
criteria and consider establishing an issue code to identify cases involving stimulus-type
payments.
IRS management agreed with both of the recommendations.
Program and Organizational Changes Are Needed to Address the Continued Inadequate
Tax Account Assistance Provided to Taxpayers (Report Number 2022-46-027)
The Accounts Management function is responsible for assisting individual and business
taxpayers with tax law and tax account inquiries, including making adjustments to taxpayer
accounts when necessary. This audit was initiated because the backlog of over-aged
Accounts Management inventory has been an ongoing challenge for the IRS. The Coronavirus
Disease 2019 (COVID-19) pandemic and recent pandemic-related tax law changes have
further exacerbated the over-aged inventory. As of November 20, 2021, the IRS reported
having 7.8 million cases in its Accounts Management inventory, with 56.8 percent of the
inventory being over-aged.
Delays in working correspondence increases burden on taxpayers and cost to the
Government. The time it takes Accounts Management to work the taxpayer’s request
contributes to the amount of interest paid. For example, the IRS paid $166.4 million in
interest between August 14, 2020 and August 26, 2021 for some amended tax returns.
TIGTA found that it took Tax Processing Centers 5 53 days longer than Campus Support Sites 6
to receive, process, and scan correspondence into the Accounts Management inventory.
5 Accounts Management Tax Processing Centers are located in Kansas City, Missouri; Austin, Texas; and Ogden,
Utah.
6 Accounts Management Campus Support Sites are located in Fresno, California; Atlanta, Georgia; Andover,
Massachusetts; Brookhaven, New York; Cincinnati, Ohio; Philadelphia, Pennsylvania; and Memphis, Tennessee.
10 │ October 1, 2021 – March 31, 2022
Redirecting tax account correspondence and replies to IRS letters, etc., to Accounts
Management Campus Support Sites will improve service to taxpayers. In addition, expanding
options for taxpayers to correspond with the IRS electronically can also reduce the time it
takes for correspondence to reach Accounts Management. The IRS’s Taxpayer Experience
Strategy included plans to expand services to allow taxpayers to provide documents to the IRS
digitally. 7 However, IRS management indicated that there was no planned implementation
date within Accounts Management.
In addition, many Accounts Management employees split their time between working
Accounts Management cases and answering IRS toll-free telephone calls. As call volumes
increased, fewer resources were available to work Accounts Management inventory. TIGTA
estimated that Accounts Management could close all of the cases in its inventory as of
October 1, 2021, in approximately seven months if all of its employees were dedicated to
working this inventory. Finally, TIGTA found that Accounts Management inventory reporting
among the Accounts Management sites was incomplete and inconsistent.
TIGTA issued eight alerts to IRS management during its review. IRS management took action
to address 4 of the alerts, including providing additional resources to assist with the scanning
backlogs at the Tax Processing Centers, increasing staffing at the new Fresno Campus
Support Site, implementing processes to ensure timely screening of correspondence, and
verifying inventory reporting for all 10 Accounts Management sites to identify inventory
reporting inconsistencies and errors.
TIGTA also made 19 recommendations to the IRS, including that the IRS redirect the receipt of
correspondence to Campus Support Sites, prioritize implementation of tools that enable
taxpayers to directly upload documents into Accounts Management’s inventory, consider
establishing a separate program that only works Accounts Management inventory, and modify
and improve the reporting of Accounts Management inventories.
IRS management agreed with 16 of the 19 recommendations. The IRS did not believe it
would be feasible to obtain the increased staffing necessary to accommodate moving all
Accounts Management correspondence to the Campus Support Sites. Management also did
not agree to update or obtain new scanning software or implement changes to the Accounts
Management Inventory Report.
Man Pleads Guilty for His Involvement in a Multi-Million Dollar Paycheck Protection
Program Loan Fraud Scheme
On January 4, 2022, in the Northern District of Georgia, Mark Mason pled guilty to wire fraud
and money laundering. Mason, along with 21 other individuals residing across the United
States, orchestrated a fraudulent scheme to obtain $3,899,377 in CARES Act funding through
the Paycheck Protection Program (PPP). The PPP was a source of relief through the CARES Act
that provided forgivable loans to small businesses for payroll, mortgage interest, rent/lease,
7 A comprehensive customer service strategy that includes proposals for improved customer service in the short
term (current and following FY), medium term (approximately three to five FYs), and long term (approximately 10
FYs).
October 1, 2021 – March 31, 2022 │ 11
and utilities. From April 2020 through August 2020, the conspirators allegedly submitted or
assisted in the submission of PPP loan applications on behalf of 22 businesses.
According to the court documents, on or about April 7, 2020, Mason submitted a fraudulent
PPP loan application for his business. The PPP loan application listed the average monthly
payroll and number of employees, and listed the purpose of the loan as payroll and
lease/mortgage interest. Along with the PPP loan application, for each quarter of 2019,
Mason submitted erroneous IRS Forms 941, Employer’s Quarterly Federal Tax Return.
However, in 2019, Mason’s business neither made tax filings with nor paid unemployment tax
to the IRS, nor withheld Federal income tax for any employee. Based on the fraudulent
submissions, a financial institution paid Mason approximately $99,000 in PPP loan funds.
Mason also completed and submitted to financial institutions, fraudulent PPP borrower
application forms and fabricated IRS Forms 941 on behalf of others, including IRS Supervisory
Individual Tax Advisory Specialist Melissa Myrick. For his work on the loan applications,
Mason received a percentage of the funded loan amount as a “success fee” from each
purported business owner.
As part of the guilty plea Mason agreed to pay full restitution plus applicable interest, and a
$200 special assessment fee. He will also forfeit, to the United States, any proceeds from
and property involved in the commission of the offenses to include $121,366.93. At
sentencing, Mason could receive more than 20 years’ imprisonment.
Kentucky Woman Pleads Guilty to CARES Act Fraud
On February 2, 2022, in the Western District of Kentucky, Mandy Bauer pled guilty to nine
counts of fraud related to the Families First Coronavirus Response Act and CARES Act. The
Families First Coronavirus Response Act established that eligible employers that retain their
employees are allowed tax credits against applicable employment taxes.
According to the court documents, on or about and between April 2, 2020 through
July 1, 2020, Bauer filed nine fraudulent applications for various forms of Federal funding
through the Families First Coronavirus Response Act and CARES Act programs. Specifically, in
May 2020, Bauer faxed an IRS Form 7200, Advance Payment of Employer Credits Due to
COVID-19, to the IRS, claiming that her business, Family Personal Sales, had 10 employees
and $37,000 in quarterly wages. The business did not have any employees or wage
expenses. Additionally, Bauer submitted fraudulent applications for CARES Act funding
through PPP and Economic Injury Disaster Loans. 8 In these applications, Bauer filed
fraudulent IRS Forms 941, Employer’s Quarterly Federal Tax Return, claiming to have
employees with wages; however, there were no Forms 941 on file with the IRS. In total, Bauer
attempted to defraud the Federal Government of more than $230,000.
A sentencing hearing is scheduled for May 11, 2022, where Bauer could face maximum
imprisonment of 180 years, a total fine of $2,250,000, and three years of supervised release.
8
The Federal Economic Injury Disaster Loan program supports small businesses’ recovery from the economic
impact of COVID-19 by providing accessible and borrower-friendly capital.
12 │ October 1, 2021 – March 31, 2022
California Woman Pleads Guilty to the Fraudulent Use of Inmates’ Personally Identifiable
Information to Obtain Stimulus Checks
On March 4, 2022, in the Northern District of California, Sheila Denise Dunlap pled guilty to
conspiracy to commit wire fraud and aggravated identity theft. Dunlap devised a scheme to
defraud the United States through the submission of fraudulent CARES Act EIP claims using
personally identifiable information (PII) of inmates. The EIPs, which were also known as
“stimulus checks,” were issued to American households in the amount of up to $1,200 per
eligible adult and $500 per qualifying child.
According to the court documents, on or about March 2020 and continuing through
July 2020, Dunlap conspired with her son, a condemned inmate serving a death sentence at
San Quentin State Prison in California, to obtain and use fellow inmates’ PII to receive EIPs.
Dunlap’s son would send, via telephone and or text message, PII of fellow prisoners and other
individuals who they suspected would qualify as nonfilers eligible for EIPs. Nonfilers are
individuals who were not required to file a 2018 or 2019 tax return. The IRS provided a
web-based tool, the EIP Portal, for nonfilers to submit their personal and bank account
information to file a simple tax return and receive their EIPs.
Around April 2020, Dunlap’s son coordinated with an unknown individual to e-mail Dunlap a
spreadsheet that contained PII of 9,043 individuals. Between May 4, 2020 and
June 18, 2020, via the EIP Portal, Dunlap electronically filed 121 EIP claims, totaling
$145,200, using the names and Social Security Numbers of individuals whose PII she
received from her son.
Although Dunlap filed each claim under a different taxpayer name and Social Security
Number, she listed the same bank account number on the claim. The bank account was a
business account held by Dunlap, for which she had sole signatory authority. Of the 121
fraudulent EIP claims filed by Dunlap, 39 were accepted by the IRS, of which 5 were
electronically deposited into Dunlap’s bank account. These individuals did not consent to
Dunlap’s use of their identification to file EIP claims.
At sentencing, which is scheduled for June 24, 2022, Dunlap could receive more than
20 years’ imprisonment and pay a maximum fine of up to $500,000.
October 1, 2021 – March 31, 2022 │ 13
Promote the Economy, Efficiency, and
Effectiveness of Tax Administration
TIGTA’s Office of Audit (OA) strives to promote the economy, efficiency, and effectiveness of
tax administration. TIGTA provides recommendations to improve IRS systems and operations
and to ensure the fair and equitable treatment of taxpayers. TIGTA’s comprehensive and
independent performance audits of the IRS’s programs and operations primarily address
statutorily mandated reviews and high-risk challenges the IRS faces.
The IRS’s implementation of audit recommendations results in:
• Cost savings;
• Increased or protected revenue;
• Protection of taxpayers’ rights and entitlements; and
• More efficient use of resources.
Each year, TIGTA identifies and addresses the IRS’s major management and performance
challenges. The OA places audit emphasis on statutory coverage required by the RRA 98 and
other laws, as well as areas of concern to Congress, the Secretary of the Treasury, the IRS
Commissioner, and other key stakeholders.
Audit Emphasis Areas for October 2021 Through March 2022
Administration of Tax Law Changes
Enhancing Security of Taxpayer Data and Protection of IRS Resources
Improving Tax Reporting and Payment Compliance to Reduce the Tax Gap
Improving Customer Service and the Taxpayer Experience
The following summaries highlight significant audits completed in each area of emphasis
during this six-month reporting period:
Administration of Tax Law Changes
American Rescue Plan Act: Implementation of Advance Recovery Rebate Credit Payments
(Report Number 2022-47-030)
The American Rescue Plan Act (Act), signed into law on March 11, 2021, created a third
Recovery Rebate Credit (RRC) of up to $1,400 per eligible individual for Tax Year (TY) 2021.
The legislation directed the IRS to make advance payments of the RRC as soon as possible
but no later than December 31, 2021. The Act also required the IRS to make plus-up
14 │ October 1, 2021 – March 31, 2022
payments to individuals whose advance payment was initially based on a TY 2019 return and
who subsequently filed their TY 2020 return. 9
The IRS began issuing the advance RRC payments on March 11, 2021, the same day the
American Rescue Plan Act was enacted. As of September 16, 2021, the IRS had issued more
than 175 million advance RRC payments to 167.4 million individuals totaling $408 billion,
more than 10 million of which were plus-up payments totaling $21 billion.
TIGTA’s review of these 175 million advance RRC payments, found that the IRS correctly
computed the RRC amount for 166.6 million individuals (99.48 percent). However, the IRS
issued more than 1.2 million payments totaling $1.9 billion to potentially ineligible individuals.
These payments stemmed from deficiencies that TIGTA previously reported during its review
of the IRS’s implementation of the CARES Act EIPs that the IRS did not address. 10 These
included payments to ineligible dependents and nonresidents, as well as duplicate payments
to individuals with a filing status change.
TIGTA also identified 644,705 potentially eligible individuals who had not received payments
totaling $1.6 billion. These included:
• 419,822 individuals who had an Individual Taxpayer Identification Number (ITIN) that did
not receive payments totaling $1.2 billion for an eligible dependent. As of
September 16, 2021, 417,749 individuals had been considered for payment.
• 133,578 individuals eligible for payments totaling $195 million because of the
unemployment benefit exclusion.
• 39,666 individuals who had an unresolved condition in their tax account or who had a
change in filing status. As of September 16, 2021, 27,901 individuals had been
considered for payment.
• 51,639 individuals incorrectly marked as being a resident of a United States (U.S.) territory
who potentially qualified for $144 million in payments. The IRS informed TIGTA that eligible
accounts were expected to be considered on November 24, 2021.
TIGTA alerted IRS management that these taxpayers were not receiving payments. The IRS
agreed with all identified potentially eligible individuals except the 133,578 individuals with
unemployment benefit exclusion, and implemented programming changes to consider the
other impacted individuals. TIGTA also identified 294,274 individuals who were issued an
advance payment and reported to the IRS that they had not received their payment or who
had not yet activated their advance RRC debit card (also referred to as an EIP card).
TIGTA made seven recommendations which included ensuring that the individuals TIGTA
identified who had not been considered for an advance payment receive a payment if eligible
and notifying all individuals who did not receive an advance payment before
9
Plus-up payments are made to individuals whose advance payment was initially based on a TY 2019 tax return
and who subsequently filed their TY 2020 return. The plus-up payment is the difference between the amounts
individuals were eligible to receive based on the two returns.
10
TIGTA, Report No. 2021-46-034, Implementation of Economic Impact Payments (May 2021).
October 1, 2021 – March 31, 2022 │ 15
December 31 2021, that they were potentially eligible to claim the RRC on their TY 2021 tax
return.
IRS management agreed with all of the recommendations.
Enhancing Security of Taxpayer Data and Protection of IRS Resources
More Interim Steps Could Be Taken to Mitigate Information Technology Supply Chain
Risks (Report Number 2022-20-009)
The President and Congress have expressed significant interest in, and have taken steps to,
limit the Government’s exposure to supply chain risks. In 2020, there was a significant supply
chain incident in which software from the SolarWinds Corporation was breached giving
hackers access to thousands of Government agency and private company systems using this
software. This audit was initiated to evaluate the IRS’s efforts to identify, assess, and mitigate
information technology supply chain risks.
Information technology relies on a complex, globally distributed, and interconnected supply
chain ecosystem. Commercially available information technology solutions present significant
benefits, including low cost, rapid innovation, and a variety of product features and choices.
As a result, the Federal Government has rapidly adopted these solutions for its information
technology systems and increased its reliance on commercially available products and
services. However, the same globalization and other factors that allow for such benefits also
increase the risk of a threat event, which can directly or indirectly affect the Government’s
information technology supply chain. Weak supply chain risk management (SCRM) controls
could potentially compromise the confidentiality, integrity, and availability of the IRS’s
information systems as well as increase the risk of disruptions to its mission-critical functions.
The Treasury Department has overall responsibility for
developing the strategy and guidance policies to manage While the Treasury Department
information technology SCRM for the department and its has overall responsibility for
bureaus. It is in the process of finalizing the guidance SCRM, initial IRS efforts are
policies as well as completing internal reviews. The IRS ongoing to address information
plans to leverage the Treasury Department’s guidance technology supply chain risks.
policies to create its own once the Treasury
Department’s guidance is approved. As a result, the IRS
is only in the beginning stages of information technology
SCRM planning. The IRS has conducted some initial research on the Internet to understand
what other Federal agencies are undertaking and has taken some preliminary steps, such as
drafting a strategy and updating policy and guidance, to address information technology
supply chain risk.
However, while waiting for the Treasury Department, the IRS could take additional steps to
better manage and mitigate some information technology supply chain risks in the short term.
For example, as part of its information security program planning, the IRS could begin
documenting relevant SCRM controls and integrating them into ongoing security assessment
16 │ October 1, 2021 – March 31, 2022
and authorization activities. A review of a judgmental sample of 15 contracts procuring
information technology products and services found that contract clauses are not consistently
applied to protect the IRS from supply chain risks.
TIGTA recommended that the IRS implement controls to manage information technology
supply chain risks based on the revised Internal Revenue Manual (IRM) guidance as well as
do more to identify and incorporate best practices of other Federal agencies that would be
applicable to the IRS; in addition, ensure that contracting officers are provided further
instructions on contract clauses and that the quality assurance process includes a review for
the proper and consistent application of contract clauses addressing supply chain risks.
The IRS agreed with the recommendations.
Improvements Are Needed When Documenting and Monitoring Employee Leave
(Report Number 2022-10-025)
Federal employees have a variety of leave options under the Federal employee leave system.
Certain types of leave options have a higher risk for abuse because the leave may be
unplanned and/or taken for unintended or unpermitted reasons. High rates of absenteeism
could affect IRS performance and service to taxpayers.
The IRS Commissioner requested that TIGTA review how Leave Without Pay and Absence
Without Leave (AWOL) are tracked and approved. Therefore, this audit was initiated to
determine whether controls were sufficient to ensure that leave taken by IRS employees was
authorized, appropriate, and properly approved.
Automated procedures and managers’ knowledge of leave policies generally prevented the
overuse of the most common types of leave. For example, the controls prevented the accrual
of annual and sick leave hours after employees reached 80 hours of nonpaid status and
limited the amount of sick leave taken for family care and for the Family and Medical Leave
Act of 1993 (FMLA). 11
However, managers and employees did not follow procedures for requesting and approving
FMLA for 44 of 50 judgmentally sampled cases. In addition, procedures were not followed for
24 (80 percent) of 30 randomly sampled cases for emergency leave offered due to the
COVID-19 pandemic. TIGTA estimated that managers and employees did not follow
procedures for 3,401 COVID-19 leave cases. Managers who were interviewed believed that
there was insufficient training and communication about the leave policies.
TIGTA’s review of FMLA documentation determined that 22 (9 percent) of the 240 randomly
sampled IRS employees who took FMLA leave had left the IRS and the FMLA documents were
destroyed. IRS guidance instructs managers to destroy all documents except the last four
appraisals and the last performance plan when employees separate from the IRS. However,
Federal law requires FMLA records to be kept and available for inspection for three years
regardless of whether the employees separated from service.
11
Pub. L. No. 103-3, 107 Stat. 6 (codified as amended at 29 U.S.C. §§ 2601-2654 (2006)).
October 1, 2021 – March 31, 2022 │ 17
Finally, the IRS could improve monitoring of leave patterns to identify potential misuse. For
example, TIGTA identified IRS employees who took extensive administrative leave, AWOL, or
sick leave in conjunction with weekends or Federal holidays. IRS management could not
determine if the leave was appropriate; however, the results showed the importance of
monitoring leave for potential misuse. The IRS Human Capital Office conducts an annual
review of administrative leave each calendar year. The IRS could conduct similar reviews to
analyze other types of leave at the employee and business unit levels to reveal patterns of
potential misuse. Alerting managers of this behavior could help ensure that employees
comply with IRS policies.
TIGTA recommended that the IRS ensure that guidance for requesting and approving FMLA is
clear and consistent; review the delivery methods of the available guidance and other
resources for approving and administering leave; revise the guidance for FMLA records
retention; clarify AWOL guidance; and conduct focused audits on leave types that are complex
or that may expose the IRS to risk.
IRS management agreed or partially agreed with all of the recommendations. However, the
IRS’s planned corrective actions did not sufficiently address the last recommendation to
conduct focused audits. TIGTA believes conducting focused audits could help management
identify patterns of potential leave misuse.
Improving Tax Reporting and Payment Compliance to Reduce the Tax Gap
Employee Plans Examination Quality Review Scores Have Declined, and Efforts to Identify
Trends and Implement Corrective Actions Could Be Improved
(Report Number 2022-10-014)
The Tax Exempt and Government Entities Division’s Employee Plans (EP) Examination program
is responsible for ensuring that retirement plans comply with qualification, reporting/
disclosure, and excise and income tax matters. From FY 2018 to FY 2020, the IRS examined
over 17,000 retirement plans in order to determine whether the plans complied with
information return and other qualification requirements. These examinations are subject to a
quality review process to ensure that examiners adhere to procedures and to identify areas for
improvement.
In recent years, this quality review process identified steep declines in the quality of the
examinations. From FY 2018 to FY 2020, overall case quality scores for EP Examinations
decreased by 23 percent. Scores declined for all three quality measures: Proper
Identification, Development, and Resolution of Issues; Timeliness; and Communications for
19 (95 percent) of the 20 quality elements.
The 23 percent drop in EP Examinations’ quality scores from FY 2018 to FY 2020 raises
concerns and requires management’s attention and effective corrective actions. Further,
TIGTA’s analysis of FY 2020 quality review results showed that case quality was worse than
reported because quality review reports did not include all errors identified. Additionally, for
18 │ October 1, 2021 – March 31, 2022
certain quality elements, five examination groups failed 80 percent or more of the cases
reviewed.
Compliance, Planning, and Classification’s Special Review (Special Review) provides EP
Examinations quality review feedback at the national and area levels and makes
recommendations to improve examination quality. However, Special Review did not provide
direct feedback to the specific groups or examiners who worked the cases with errors. As a
result, EP management was not notified about the specific problems at the local levels.
Further analysis showed low quality scores for key elements such as planning the
engagement, developing material issues, documenting actions taken, and protecting taxpayer
rights. Specific feedback and focused training on these elements could improve case quality.
EP Examinations is responsible for reviewing quality scores and implementing actions to
improve examinations. Management is implementing corrective actions to improve
examination quality, including consolidating and centralizing improvement strategies that had
previously been at the discretion of each area. However, EP Examinations has not established
performance measures for determining whether these corrective actions are achieving the
desired results.
It is important for the IRS to objectively monitor the effectiveness of corrective actions so that
changes can be made if needed. Millions of plan participants rely on the IRS for assurance
that retirement plans comply with qualification, reporting/disclosure, and excise and income
tax matters.
Therefore, TIGTA recommended that the IRS require Special Review to record and report all
reasons why a quality element failed; periodically analyze cases that failed elements due to
“Other” reasons; consider providing feedback related to quality scores to group managers;
seek feedback and training from Special Review for low-scoring elements; ensure that
proposed corrective actions are implemented timely; and develop performance metrics and
data collection methods to measure the effectiveness of the corrective actions.
IRS management agreed with all of the recommendations.
The Administration of Partial Payment Installment Agreements Needs Improvement
(Report Number 2022-30-021)
Taxpayers granted a Partial Payment Installment Agreement (PPIA) will not fully pay all of their
delinquent tax liability immediately, so it is important that PPIAs are carefully and accurately
administered. However, the IRS is not always properly promoting or establishing PPIAs. When
this happens, taxpayers may be unaware that the PPIA is a collection tool available to them to
resolve their outstanding balance.
TIGTA found that the IRS has not provided taxpayers with adequate information on PPIAs on
its public website or with the instructions pertaining to the form used to request an installment
agreement, nor has the IRS created an effective means for taxpayers to request PPIAs or
appeal rejected PPIAs as required by law.
October 1, 2021 – March 31, 2022 │ 19
In addition, TIGTA found that PPIAs were established without evidence of a complete financial
analysis of the taxpayers’ ability to pay. From a judgmental sample of 30 PPIAs, TIGTA
determined that the taxpayers’ financial statement had been deleted from IRS files for
11 PPIAs because more than one year had elapsed since the PPIA was established. With no
financial statement in the file, TIGTA could not determine whether the IRS had properly
computed the maximum monthly payment amount the taxpayers had the ability to pay.
Collection default data indicated that the IRS was also establishing PPIAs for amounts that
taxpayers could not afford. The default rate for PPIAs was higher (23 percent) than all other
types of installment agreements (9 percent), and in some years, the amount defaulted was
greater than the amount placed into PPIAs. From FY 2016 to FY 2020, the IRS established
PPIAs for nearly $19.7 billion, while taxpayers defaulted on PPIAs totaling $17.6 billion.
Lastly, TIGTA found that the IRS procedures to close cases as currently not collectible should
be enhanced with a PPIA option. The decision process for determining a currently not
collectible case was similar to the steps taken by the IRS prior to granting a PPIA. TIGTA
reviewed a random sample of 51 taxpayer accounts closed as uncollectible during FY 2020
and determined that the IRS should have offered four of the taxpayers a PPIA instead of
closing the case as currently not collectible. If PPIAs were established for these four
taxpayers, TIGTA estimated that they could have paid over $79,724 before their respective
collection statutes expired. Based on the random sample, TIGTA projected that the
16,026 taxpayers who had tax liabilities closed as uncollectible could have entered PPIAs and
paid a total of over $319 million before their respective collection statutes expired.
As a result, TIGTA made six recommendations to help the IRS improve administration of PPIAs.
IRS management agreed with five of the six recommendations and partially agreed with the
sixth recommendation.
Improving Customer Service and the Taxpayer Experience
Plans to Close the Austin Tax Processing Center Should Be Halted Until Hiring Challenges
and Substantial Backlogs At Remaining Centers Are Addressed
(Report Number 2022-40-015)
Tax return projections show that electronic filing will continue to increase, resulting in
decreased paper processing operations at the Tax Processing Centers. As a result, the IRS
continues its Tax Processing Center consolidations and will end its Submission Processing
operations in Austin, Texas, by September 2024. At the end of this consolidation process, two
Tax Processing Center locations, Kansas City and Ogden, will remain.
However, the IRS continues to experience challenges hiring and retaining an adequate
workforce to meet its workload demands at the Tax Processing Centers. As of August 2021,
TIGTA estimated that the IRS was facing a total staffing deficiency in its Submission
Processing function of around 2,598 employees. Although the IRS has several initiatives
underway to help address its hiring shortages, to date, these approaches have not been
successful. Further, the hiring shortfalls have been exacerbated by the COVID-19 pandemic
20 │ October 1, 2021 – March 31, 2022
and are resulting in millions of tax returns not being timely processed, refunds not being
timely issued, and taxpayers not timely receiving assistance with their tax account issues. On
June 14, 2021, IRS management noted that they would take a strategic pause to their
consolidation efforts until early 2022.
In addition, the transfer of work not directly related to the processing of tax returns further
hampers the Submission Processing function’s ability to deliver its core mission of processing
tax returns and addressing tax accounts. For example, the Fresno Tax Processing Center
transferred work related to three specialty programs to the Kansas City and Ogden Tax
Processing Centers, each of which had and continue to have millions of returns not processed
and other account work remaining unworked. This specialty program work requires resources
which could otherwise be directed to process the backlogged work.
Finally, outdated mail processing equipment is
contributing to the loss of millions of dollars in
revenue and the inefficient use of limited
resources. This places IRS operations at risk for
inefficient and untimely execution of tax return
processing. For example, this outdated
equipment cannot properly detect remittances. In
Calendar Year 2021 alone, the IRS reported $56 million in lost opportunity costs due to
untimely check deposits. Yet the cost to replace or rebuild the current equipment is only a
fraction of those lost costs, ranging from $360,000 to $650,000.
TIGTA made six recommendations for improvements, including that the IRS postpone the
closure of the Austin Tax Processing Center until hiring and backlog shortages are addressed.
IRS management agreed with five of the six recommendations. The IRS did not agree to
postpone the closure of the Austin Tax Processing Center until hiring and backlog shortages
are addressed.
Subsequent to the issuance of this report, the IRS announced that it no longer plans to close
the Austin Tax Processing Center. The IRS stated that plans to consolidate submission
processing are revalidated annually and that the most recent analysis indicated there would
not be sufficient capacity to process the remaining workload if the Austin Tax Processing
Center was closed.
October 1, 2021 – March 31, 2022 │ 21
Protect the Integrity of Tax Administration
TIGTA is statutorily mandated to protect the integrity of Federal tax administration. TIGTA
accomplishes this mission through the investigative work conducted by the Office of
Investigations (OI). Through its investigative programs, OI protects the integrity of the IRS and
its ability to collect revenue owed to the Federal Government by investigating violations of
criminal and civil law that adversely impact Federal tax administration, as well as
administrative misconduct by IRS employees.
The Performance Model
TIGTA’s OI accomplishes its mission through the hard work of its employees, whose efforts are
guided by a performance model that focuses on three primary areas of investigative
responsibility:
Employee integrity;
Employee and infrastructure security; and
External attempts to corrupt tax administration.
IRS employee misconduct undermines the IRS’s ability to deliver taxpayer services, to enforce
tax laws effectively, and to collect taxes owed to the Federal Government. External threats
against the IRS impede its ability to fairly, efficiently, and safely carry out its role as the
Nation’s revenue collector. Individuals who attempt to corrupt or otherwise interfere with the
IRS through various schemes and frauds adversely impact the IRS’s ability to collect revenue.
TIGTA investigates these serious offenses and refers them to IRS management when they
involve IRS employee misconduct. When appropriate, TIGTA also refers its investigations to
the Department of Justice or to State or local authorities for prosecution.
Performance Area: Employee Integrity
In order for the country’s tax system to operate successfully, taxpayers must have confidence
in the fair and impartial administration of Federal tax laws and regulations. IRS employee
misconduct can erode the public’s trust and impede the IRS’s ability to effectively enforce
tax laws. Employee misconduct can take many forms, such as: the misuse of IRS resources
or authority; theft; fraud; extortion; taxpayer abuse; unauthorized access to, and disclosure of,
tax returns and return information; and identity theft.
22 │ October 1, 2021 – March 31, 2022
During this reporting period, employee integrity
investigations accounted for 34 percent of OI’s work.
OI closed 300 employee misconduct investigations that
were referred to the IRS for action. The IRS took action
on 232, and closed 68 investigations without action. 12
As part of its employee integrity focus, TIGTA also
34%
of OI’s work was
conducts proactive investigative initiatives to detect
employee integrity
misconduct in the administration of IRS programs. investigations
During this reporting period, TIGTA initiated 21 proactive
projects to detect systemic weaknesses or potential IRS
program vulnerabilities. TIGTA’s most successful integrity
project involves the detection of IRS employees who
abuse their access to taxpayer information to commit
identity theft and other crimes.
Identity Theft and the Insider Threat
The following cases represent examples of OI’s efforts to address identity theft and the insider
threat during the reporting period: 13
Former IRS Special Agent Sentenced for Wire Fraud and Aggravated Identity Theft
On October 12, 2021, in the Eastern District of New York, former IRS Criminal Investigation
Special Agent Bryan Cho was sentenced for wire fraud and aggravated identity theft. Cho
pleaded guilty to the charges in June 2021 and forfeited $394,374.63.
According to the court documents, in or around 2018, law enforcement agents in South Korea
learned that public officials who worked at South Korea’s National Intelligence Service and
National Tax Service paid Cho bribes in exchange for information Cho obtained through his
employment with IRS Criminal Investigation. In 2018, while Cho was visiting Asia for personal
reasons, law enforcement agents from South Korea contacted Cho and sought to question
him about his knowledge of and participation in the alleged bribery scheme.
During the course of his employment, Cho worked on an investigation through which he
obtained identifying information for an individual described as “John Doe.” The investigation
was eventually closed, but Cho retained items he obtained during the investigation and used
John Doe’s identifying information to create false identification documents and open a
corporate entity overseas in John Doe’s name. The fraudulent documents included purported
identification cards for the Philippines and the Republic of the Marshall Islands in the name of
12 These data may pertain to investigations referred administratively in prior reporting periods and do not
necessarily relate to the total number of misconduct investigations that were referred to the IRS for action during
this reporting period.
13 The facts in the summarized case narratives come from court documents of the respective jurisdictions
named.
October 1, 2021 – March 31, 2022 │ 23
John Doe, but bearing photos of Cho, and a purported passport in the name of John Doe for
the Republic of Guinea-Bissau.
Cho later made false statements during a background investigation, including denying that he
possessed any foreign identification documents. Cho also denied any contact with foreign
officials, even though law enforcement officials from South Korea had communications with
him regarding allegations that South Korean government personnel had paid bribes to Cho in
exchange for information about ongoing U.S. criminal investigations.
Cho also submitted multiple false documents in connection with the purchase of a co-op
apartment on the Upper East Side of Manhattan, New York, including forged tax returns and
bank statements. These false documents inflated his income and assets to secure the co-op
board’s approval for the purchase, and funneled hundreds of thousands of dollars from a
foreign bank account associated with an entity he created using John Doe’s identity to fund
the purchase.
Cho was sentenced to 30 months’ imprisonment, 1 year supervised release, and a $200
assessment fee.
IRS Employee Sentenced for Access Device Fraud
On December 1, 2021, in the Eastern District of Virginia, Kwashie Senam Zilevu was
sentenced for access device fraud. Zilevu was indicted on November 26, 2019, and charged
via criminal complaint on October 2, 2019. On July 17, 2021, a jury convicted him on one
count of access device fraud.
According to the court documents, Zilevu was employed as an Information Technology
Specialist with the IRS. Zilevu owned several businesses, including MacroTele, LLC, which he
claimed sold telephone calling cards that he created. Between January 2016
and March 2018, Zilevu knowingly, and without authorization, used the names, addresses,
dates of birth, and Social Security Numbers of at least three victims to obtain fraudulent credit
cards. Once Zilevu obtained the credit cards in the victims’ names, he used them to make
several thousands of dollars of purchases at retail stores and other companies. An American
Express application was submitted using a victim’s PII and approximately $49,000 was
charged to the American Express card. Among the purchases were an airline ticket for travel
from Washington, D.C., to Miami, Florida, and a hotel reservation for Zilevu.
Another credit card application was submitted to U.S. Bank and Trust using PII of a second
victim. Bank statements revealed that a total of $10,273.39 in completed transactions and
$2,651.62 in attempted transactions were made using this card, including an airline ticket
from Dulles, Virginia to Montego Bay, Jamaica, for Zilevu. Another credit card application was
submitted to U.S. Bank and Trust using a third victim’s PII. A total of $9,641.69 in fraudulent
charges were made using this card. A review of Zilevu’s IRS e-mail account revealed that
Zilevu received an e-mail message from PayPal congratulating the third victim for setting up
his or her account and instructing the victim to click a link in order to confirm the accuracy of
his or her e-mail address. Zilevu received a subsequent e-mail message from PayPal to his
24 │ October 1, 2021 – March 31, 2022
IRS e-mail account advising the third victim that he or she was officially a PayPal member.
When interviewed, each of the victims confirmed that the fraudulent credit cards had been
taken out in their names, and that Zilevu did not have permission or authority to use their
information to apply for the cards.
Zilevu was sentenced to five months’ imprisonment, followed by two months’ home
confinement, and three years of supervised release. He was ordered to pay restitution
totaling $49,771 and a $100 assessment fee.
This investigation was worked jointly by special agents from TIGTA and the U.S. Postal
Inspection Service.
Employee Integrity
The following case is an example of OI’s efforts to address employee integrity during this
six-month reporting period: 14
Former Internal Revenue Service Employee Sentenced for Attempted Wire Fraud and
Making False Statements
On January 18, 2022, in the District of New Hampshire, former IRS employee Jane Smith was
sentenced for attempted wire fraud and making false statements. Smith pled guilty on
October 7, 2021.
According to the court documents, around September 1993, Smith began receiving Social
Security Disability Insurance (SSDI) benefits from the Social Security Administration (SSA).
The SSA informed Smith that she was required to report any changes in her employment and
income. Around January 2007 through March 2018, Smith worked for several employers, to
include the IRS and two private companies. She concealed her employment from the SSA
knowing her earnings would have reduced her SSDI benefits or made her ineligible to receive
SSDI benefits.
Between April 2011 and July 2017, the SSA learned of Smith’s employment and suspended
her benefits several times. Each time, Smith took steps to cause the SSA to resume wiring
her SSDI benefit payments that she was not entitled to receive. For example, in 2017, when
SSA learned of Smith’s employment and suspended her benefits, she fabricated an identity
theft claim to conceal her employment history. In February 2018, Smith filed a false police
report with the New Hampshire Nashua Police Department claiming she was the victim of
identity theft and that someone else used her name to work for her employers. She also
made similar false statements to the IRS and SSA.
In February 2021, Smith admitted to law enforcement that she lied about her work and falsely
claimed to be the victim of identity theft because she did not want to lose her SSDI benefits.
As a result of Smith’s false claims, SSA wired SSDI benefit payments from the U.S. Treasury in
14 The facts in the summarized case narrative come from court documents of the jurisdiction named.
October 1, 2021 – March 31, 2022 │ 25
Kansas City, Missouri to Smith’s credit union account in Methuen, Massachusetts. Smith
obtained over $90,000 in fraudulent benefits.
Smith received 3 years’ probation and she must complete 50 hours of community service
within 12 months. She was ordered to pay $76,680.10 in restitution and a $200 assessment
fee.
Performance Area: Employee and Infrastructure Security
Threats and assaults directed at IRS employees, facilities, and
infrastructure impede the effective and safe administration of the
Federal tax system and the IRS’s ability to collect tax revenue. OI
receives referrals of all reports of threats, assaults, and forcible
interference against IRS employees in the course of performing their
official duties. TIGTA also actively pursues, investigates, and
mitigates emerging threats to the IRS’s ability to conduct Federal tax
administration in cyberspace.
Contact with the IRS can be stressful and emotional for taxpayers. While the majority of
taxpayer contacts are routine, some may become confrontational and even violent. TIGTA’s
special agents are statutorily mandated to provide physical security, known as “armed
escorts,” to IRS employees who have face-to-face contact with taxpayers who may pose a
danger to the employee, and to ensure that IRS employees have a secure environment in
which to perform their critical functions of tax administration. During this six-month reporting
period, OI provided six armed escorts for IRS employees.
OI undertakes investigative initiatives to identify individuals who could commit violence
against, or otherwise pose a threat to, IRS employees, facilities, or infrastructure. OI also
provides intelligence to IRS officials to assist them in making proactive operational decisions
about potential violence or other activities that could pose a threat to IRS systems, operations,
and employees.
The investigative information sharing between OI and
the IRS’s Office of Employee Protection to identify
“potentially dangerous” taxpayers is one example of
TIGTA’s commitment to protecting IRS employees.
Taxpayers who meet certain IRS criteria receive a 40%
designation as potentially dangerous. Five years after
of OI’s work was
this designation has been made, TIGTA conducts a
investigations of
follow-up assessment of the taxpayer so that the IRS threats/assaults
can determine if the taxpayer still presents a potential
danger to IRS employees.
During this six-month reporting period, employee and
infrastructure security investigations accounted for
40 percent of OI’s work.
26 │ October 1, 2021 – March 31, 2022
The following cases represent examples of OI’s efforts to ensure the safety of IRS employees
during the reporting period: 15
New York Taxpayer Threatens to Assault and Kill an IRS Employee
On February 11, 2022, in the Eastern District of New York, an arrest warrant was obtained for
Jamel Jackson for threatening to assault and murder an IRS employee during the performance
of their official duties.
According to the court documents, on or about September 2, 2021, Jackson entered the IRS
Taxpayer Assistance Center located in Brooklyn, New York to obtain assistance. The IRS
employee assisted Jackson at a cubicle, which included a desk with a plexiglass divider
between them. Jackson entered the workspace while using his cellphone. The employee
asked Jackson for certain verification documents to aid with his tax issue, and informed him
not to use his cellphone while in the cubicle. In response, Jackson slammed his backpack on
the employee’s desk and shouted, “I will snap your neck! I kill people! I’m on trial for killing
people!” Jackson stood, placed his knee on the desk, and shook the plexiglass divider
violently. Jackson threatened to remove the plexiglass to reach the employee. The employee
activated a duress alarm. A security officer arrived and escorted Jackson out of the building.
Approximately four months later, on or about January 10, 2022, Jackson returned to the IRS
Taxpayer Assistance Center for a scheduled appointment. Due to Jackson’s previous conduct
with the IRS, TIGTA agents were present at the location for safety reasons. Upon entering the
building, Jackson stated to a security guard, “You stupid [expletive]. I’ve been to every
maximum-security prison up north,” and “I will knock you the [expletive] out.”
Subsequently, an IRS employee assisted Jackson and told him his stimulus check was sent to
the wrong address. Jackson turned to a nearby TIGTA agent and stated, “I’m gonna get back
to prison mode.” The IRS employee told Jackson it could take six weeks before he received a
stimulus check to his address. Jackson stood up, approached the TIGTA agent and shouted, “I
will literally do life in jail for my money! Do you understand that?” Jackson returned to the IRS
employee and yelled, “In six weeks…when I come back, I’m trying to find out where is my
money. After that, I’m coming off my hip! You understand?!” Jackson gathered his
documents and shouted, “I will be back!” As he exited the building, he said to the security
guard, “Remember, you have to leave out this building.”
If convicted, Jackson could receive up to 20 years’ imprisonment.
Georgia Man Threatens Injury to IRS Employees and Their Family
On March 8, 2022, in the Middle District of Georgia, Derrick Douglas pled guilty to threatening
to injure an IRS employee and their family. Douglas was indicted December 14, 2021.
15 The facts in the summarized case narratives come from court documents of the respective jurisdictions
named.
October 1, 2021 – March 31, 2022 │ 27
According to the court documents, on December 1, 2020, Douglas called the IRS to inquire
about his 2019 tax refund that he had not received. The IRS contact representative who
assisted Douglas learned he was under an audit for TY 2019. During the telephone call,
Douglas’ demeanor changed from calm to angry as he spewed profanities. Douglas frequently
indicated he would take action, show up, and do something although he never gave specifics
about how he would execute those threats. Douglas said he would get rid of his Social
Security Number and, “I’d like to see if someone from the IRS shows up at my house.
Something will happen to them and it’s not going to be pretty.”
Special agents with the TIGTA and local county sheriff deputies interviewed Douglas at his
residence on December 8, 2020. Douglas admitted he made threatening statements and
explained he was upset with the IRS for delaying his tax refund. He apologized and said he
had no intentions of harming an IRS employee. TIGTA special agents informed Douglas that
threatening statements to an IRS employee is a violation of Federal law.
The following year, on November 15, 2021, Douglas left a threatening message for an IRS
paralegal. Douglas immediately began screaming and using profanity. He stated, “If we lose
everything else today, I will see you in your office sir. I will see you, I promise. This is Derrick
Douglas. Because this does not make any sense cause the IRS still continue to hold my
refund after I went through the appeals, I went through the examination, and I went through
the tax court. Send me my [expletive] refund.” Later that day, TIGTA special agents
interviewed Douglas, notified him it is a Federal crime to threaten IRS employees, and warned
another threatening incident may result in Federal charges against him. During the interview,
Douglas acknowledged his previous 2020 threats and advisement from TIGTA.
Subsequently, on November 26, 2021, Douglas sent an e-mail to the same IRS paralegal
stating, “I will die trying to put your family in an identical hardship as my family. Pass it on,
send officers back to my home, and threatened [sic] my wife and kids again.”
At sentencing, Douglas faces a maximum term of five years’ imprisonment, three years of
supervised release, and could possibly receive an order to pay a fine not to exceed $250,000.
Performance Area: External Attempts to Corrupt Tax Administration
TIGTA also investigates external attempts to corrupt or impede tax administration. Individuals
may attempt to corrupt or impede tax administration in many ways. For example, they may
impersonate IRS employees or misuse IRS seals and symbols; file false or frivolous
documents against IRS employees; use fraudulent IRS documentation to perpetrate criminal
activity; offer bribes to IRS employees to influence their tax cases; commit fraud in contracts
the IRS awards to contractors; or commit cybercrimes. In addition, unscrupulous tax
preparers can impede tax administration by including errors or false information on a
customer’s return.
28 │ October 1, 2021 – March 31, 2022
During this reporting period, investigations
into attempts to corrupt or impede tax
administration accounted for 26 percent of
OI’s work.
26%
Cybercrime of OI’s work was
investigating attempts to
corrupt or impede tax
Individuals may corrupt or impede tax administration
administration through the manipulation of
IRS applications and the unauthorized
access of IRS systems. TIGTA remains
focused on combating access to IRS
applications in furtherance of criminal activity.
The following case represents OI’s efforts to fight cybercrime during the reporting period: 16
Georgia Man Arrested for Scheme to Defraud the IRS
On October 19, 2021, Felix Ochei, also known as Gabriel Osom and Onaz Ochai, was
arraigned in the Northern District of Georgia after being indicted for conspiracy to commit wire
fraud, access device fraud for possession of 15 or more unauthorized access devices, and
aggravated identity theft.
According to the indictment filed on September 28, 2021, beginning on or about May 2018
and continuing through November 2020, Ochei and others did knowingly and willfully conspire
to devise a scheme to defraud the IRS and the Georgia Department of Labor, in order to
obtain money and property from these entities. Ochei and conspirators used stolen identities
to file fraudulent income tax returns and applications for unemployment benefits, then
directed refunds and benefits to accounts and financial transaction cards they controlled.
To obtain Unemployment Insurance benefits they were not entitled to receive, Ochei and
conspirators acquired the names of other persons along with their dates of birth, Social
Security Numbers, and other PII and used this information to electronically submit numerous
fraudulent applications for Unemployment Insurance benefits to the Georgia Department of
Labor.
As a part of the scheme to defraud the Government, Ochei and conspirators obtained and
verified victims’ PII through the IRS eauthentication system. Using this information, they
electronically submitted fraudulent tax returns to the IRS that claimed refunds and made false
representations to include victims’ electronic signature, income, bank account information,
employment, and address.
If convicted, Ochei could receive more than 20 years’ imprisonment.
16
The facts in the summarized case narrative come from court documents of the jurisdiction named.
October 1, 2021 – March 31, 2022 │ 29
Impersonation Scams and Schemes
TIGTA continues to aggressively investigate criminal activities pertaining to individuals
corrupting tax administration by impersonating IRS employees in an effort to obtain PII from
unsuspecting taxpayers or to steal their money. Such impersonators may claim to be IRS
employees on the telephone or may misuse IRS logos, seals, or symbols to create
official-looking letters and e-mails.
Between October 2013 and March 2022, TIGTA logged more than 2.5 million contacts from
taxpayers who reported that they had communicated with individuals who claimed to be IRS
employees. The impersonators told the victims that they owed additional tax and that if they
did not immediately pay, they would be arrested or face other adverse consequences. As of
March 31, 2022, 16,038 victims have reported to TIGTA that they had lost more than
$85 million, collectively, to the scam’s perpetrators.
Since the IRS scam’s inception, 300 individuals have been charged in Federal court for their
role, 5 of which were charged during this reporting period. In addition, 197 of those
individuals have been sentenced and collectively received a total of more than 910 years’
imprisonment. This effort has resulted in more than 893 impersonation scam-related
investigations, and financial restitutions totaling more than $224 million. 17
The following cases are examples representative of OI’s efforts to investigate IRS
impersonation scams during this six-month reporting period: 18
Telemarketing Call Center Owner and Director Sentence in Transnational Fraud Scheme
On December 17, 2021, in the Eastern District of New York, Ajay Sharma, owner and director
of an India-based telemarketing call center, was sentenced for conspiracy to commit wire
fraud in connection with a fraudulent scheme directed at thousands of U.S. citizens. Sharma
previously pled guilty to the charge on November 30, 2020.
According to the court documents, between approximately January 2016 and January 2019,
Sharma organized and led a telemarketing scheme through his company, APS Technology.
Operating from India, Sharma’s telemarketing company targeted victims in the United States
and falsely claimed to represent the IRS, and other Federal agencies. The victims were
informed they owed a sum of money to the U.S. Government and they would be arrested if the
debts were not promptly paid. After the victims wired payments to bank accounts opened for
the purposes of the scheme, the funds were withdrawn and laundered through additional
bank accounts. The scheme is estimated to have netted over $2 million from victims across
the United States.
17 Beginning in FY 2022, the methodology TIGTA used to calculate statistics was changed to account for data
that had been updated from investigations closed in previous fiscal years.
18 The facts in the summarized case narratives come from court documents of the respective jurisdictions
named.
30 │ October 1, 2021 – March 31, 2022
Sharma was sentenced to 78 months’ imprisonment and 2 years of supervised release. He
was ordered to pay $3,266,714 in restitution, forfeit $1,005,421, and pay a special
assessment fee of $100.
Man Sentenced in Multimillion-Dollar International Robocalls Scheme Ordered to Pay
Restitution to Victims
On February 10, 2022, in the Eastern District of Virginia, Pradipsinh Dharmendrasinh Parmar
was ordered, jointly and severally with his coconspirators, to pay restitution to victims in the
amount of $5,894,898.20. Parmar was previously sentenced for conspiracy to commit mail
and wire fraud, and aggravated identity theft on September 20, 2021, after pleading guilty to
the charges on February 22, 2021.
According to the court documents, beginning in or about May 2016, and continuing through
October 2019, Parmar knowingly conspired to defraud victims of money both directly and
through automated, previously recorded calls, commonly referred to as “robocalls.” These
calls contained messages designed to create a sense of urgency with the call recipient, and
included instructions the victim was to take. The messages typically told recipients that they
had a serious legal problem, usually criminal in nature, and that if they did not act
immediately in accordance with the demands of the callers, there would be drastic
consequences, to include threats of arrest and/or significant financial penalties.
The conspiracy operated through foreign call centers located primarily in India and
disproportionately victimized elderly Americans. The conspirators would falsely claim to be
acting on behalf of a Federal Government agency, such as the IRS, regarding potential tax
penalties. Victims were persuaded or coerced to send packages of cash, preloaded payment
cards, and/or wire funds to pay tax bills. To conceal the international origin of the calls, the
conspirators established multiple cells within the United States, which victims were directed to
send cash payments.
According to a Department of Justice press release dated February 22, 2021, as part of his
guilty plea, Parmar admitted that over a two-year period from March 2017 to April 2019, he
traveled to 30 States and collected at least 4,358 wire transfers sent by victims via Western
Union, MoneyGram, and Walmart with losses totaling at least $4,312,585. Parmar also
received and attempted to receive at least 91 packages of bulk cash sent by victims from
several States within the United States via FedEx, United Parcel Service, or the U.S. Postal
Service totaling at least $1,593,591. Parmar transferred the majority of the money he
collected to coconspirators by depositing the funds into bank accounts at various financial
institutions or giving it directly to various informal money transfer services, known as Hawalas.
For his participation in this conspiracy, Parmar retained a portion of the funds, approximately
8 percent of each money transfer and 2 percent to 7 percent of each cash shipment.
Parmar used counterfeit identification documents bearing his photograph alongside fictitious
and stolen identities to receive money transfers. Parmar admitted that he received at least
549 counterfeit identification documents that he used to receive and collect victim cash
shipments and money transfers.
October 1, 2021 – March 31, 2022 │ 31
In addition to $5,894,898.20 in restitution, Parmar received 14 years’ imprisonment,
3 years’ supervised release, and was ordered to pay a $200 assessment fee.
Tax Preparer Outreach
In addition to promoting employee integrity, TIGTA also is committed to tax preparers’
education on integrity. Tax preparers play an important role to ensure the integrity of tax
administration because of their frequent contact with the IRS and their influence on tax
compliance or noncompliance. Tax preparers can either assist in the enforcement of tax
administration to ensure that taxpayers comply with Internal Revenue laws, or they can
impede it.
During this reporting period, TIGTA special agents provided integrity presentations to more
than 156 tax preparers nationwide. The presentations detailed TIGTA’s role in protecting
the integrity of Federal tax administration; the differences between the respective
jurisdictions of TIGTA and the IRS; how to identify various forms of preparer misconduct; and
common IRS impersonation scams.
The following cases represent examples of OI’s efforts to protect tax administration from
unscrupulous tax preparers during this six-month reporting period: 19
Florida Tax Intermediary Sentenced for Wire Fraud
On September 21, 2021, in the Southern District of Florida, Jocelyn Lynch was sentenced for
wire fraud in connection with a scheme to steal IRS tax payments.
According to the court documents, between approximately January 1, 2013 through
January 17, 2020, Lynch promoted herself as a tax intermediary who could help clients settle
outstanding tax debt owed to the IRS. At least three taxpayers hired Lynch to settle their debt
with the IRS with an offer in compromise, which allows taxpayers to settle debt for less than
the full amount owed. Lynch assisted her clients by completing IRS forms falsely representing
that she negotiated an offer in compromise with the IRS on their behalf. Lynch instructed her
clients to deposit payments intended for the IRS into her personal bank account and falsely
represented that she would forward the payments to the IRS. Lynch subsequently provided
her clients with fraudulent documentation and receipts purportedly from the IRS. In total,
Lynch received approximately $363,994 in payments from her clients.
Lynch was sentenced to 63 months’ imprisonment, 3 years’ supervised release, and was
ordered to pay $867,593 in restitution, and an $800 assessment fee.
19 The facts in the summarized case narratives come from court documents of the respective jurisdictions
named.
32 │ October 1, 2021 – March 31, 2022
Kentucky Man Pled Guilty to Making False Statements
On December 7, 2021, in the Eastern District of Kentucky, Charles Marshall Stivers pled guilty
to one count of making and using a false document, knowing the same to contain a materially
false statement or entry. Stivers was indicted on March 18, 2021.
According to the court documents, Stivers was initially licensed to practice as a Certified
Public Accountant (CPA) by the State of Kentucky in 1989. On October 23, 2015, the
Kentucky State Board of Accountancy permanently revoked Stivers’ CPA license by an Agreed
Order. The Agreed Order prohibited Stivers from ever holding himself as a CPA to the public in
any capacity, including to the IRS or any other tax authority.
On or about March 22, 2016, in Manchester, Kentucky, Stivers signed an IRS Form 2848,
Power of Attorney and Declaration of Representative, and indicated he was the Power of
Attorney for a business. As part of his completion of this form, Stivers specified in writing that
he was a licensed CPA. He also listed CPA license number 12597 that belonged to his son.
Stivers submitted the signed form to an IRS revenue officer.
On three more occasions in 2018 and 2019, Stivers again completed IRS Form 2848 on
behalf of clients in Knoxville, Tennessee. Each time he indicated he was a licensed CPA and
utilized his son’s CPA license number. He finalized the forms by forging his son’s signature.
At sentencing, Stivers could receive no more than five years’ imprisonment, up to three years
of supervised release, and a fine of not more than $250,000.
October 1, 2021 – March 31, 2022 │ 33
Advance Oversight of America’s Tax System
TIGTA’s Office of Inspections and Evaluations identifies opportunities for improvement in IRS
and TIGTA programs by performing inspections and evaluations that report timely, useful, and
reliable information to decision makers and stakeholders.
This function has two primary product lines: inspections and evaluations.
Inspections are intended to:
• Provide factual and analytical information;
• Monitor compliance;
• Measure performance;
• Assess the effectiveness and efficiency of programs and operations;
• Share best practices; and
• Inquire into allegations of waste, fraud, abuse, and mismanagement.
Evaluations are intended to:
• Provide in-depth reviews of specific management issues, policies, or programs;
• Address Governmentwide or multi-agency issues; and
• Develop recommendations to streamline operations, enhance data quality, and
minimize inefficient and ineffective procedures.
IRS Employees Continue to Meet Select Telework Requirements, but Additional Actions
Can Further Improve the Level of Compliance (Report Number 2022-IE-R001)
In July 2016, TIGTA reported 20 that IRS policies are consistent with the Telework
Enhancement Act of 2010, 21 and that most employees had completed required training and
were not involved in misconduct that impacted their eligibility to telework. However, TIGTA
determined that the IRS could improve some telework processes to ensure compliance with
the law. The IRS agreed to implement processes to ensure that teleworkers have completed
telework training and have a valid telework agreement. The IRS also agreed to clarify rules
associated with misconduct by clearly defining issues that warrant suspension or
discontinuance of telework privileges and to develop procedures to identify teleworkers who
have been disciplined for conduct that negatively impacts the Telework Program.
20 TIGTA Report No. 2016-10-039, Telework Qualification Requirements Are Generally Being Met, but Program
Improvements Are Needed (July 2016).
21 Pub. L. No. 111-292, 124 Stat. 3165 (2010).
34 │ October 1, 2021 – March 31, 2022
The IRS’s Telework program has expanded since our last review. IRS records show that over
37,000 employees teleworked during FY 2019. As such, ensuring that requirements are met
is essential to upholding the integrity of the program and maintaining public trust in tax
administration.
In most instances, IRS employees included in our analysis met select requirements to
telework and routinely reported to an IRS office in accordance with IRS policies. TIGTA
reviewed a random sample of 206 IRS employees who recorded time to telework during
FY 2019 and found that all employees in the sample had completed telework training as
required by the Telework Enhancement Act of 2010. In addition, according to telework
documentation, all employees in the sample had telework locations that were within
150 miles (125 miles for Chief Counsel employees) from their post of duty as required by IRS
policies. However, 7 (3 percent) of the 206 employees did not have an approved telework
agreement in place prior to charging time to telework in FY 2019.
Our review of IRS time and attendance system records for all teleworkers showed that
388 IRS employees (1 percent) did not report to the office at least twice per pay period, as
required by Federal and IRS policies, for over half of the FY. The IRS provided adequate
documentation to support the explanations for 181 employees. However, the IRS did not
provide adequate supporting documentation for 207 (53 percent) of the 388 employees who
did not report to the office twice per pay period for over half of FY 2019. Our review of IRS
disciplinary records for all employees who charged time to telework during FY 2019 revealed
that five employees were disciplined for being AWOL for five or more days and should not have
participated in the Telework Program. The IRS also allowed 138 employees to continue to
telework while the employees were placed on a Performance Improvement Plan or after the
employees received a performance evaluation that was less than fully successful.
The IRS Telework Program Office, monitors telework activity to ensure that employees who
telework comply with telework eligibility requirements. Several exceptions identified by TIGTA
were also identified by the Telework Program Office, which worked with the business operating
divisions to remove telework privileges for employees who were not eligible for the Telework
Program.
TIGTA made six recommendations, which included issuing reminders to IRS management of
their responsibilities prior to approving a telework agreement and maintaining adequate
documentation to justify why an employee is not reporting to their post of duty in accordance
with Federal regulations.
The IRS agreed with all recommendations.
October 1, 2021 – March 31, 2022 │ 35
Audit Statistical Reports
Reports with Questioned Costs
TIGTA issued one audit report with questioned costs during this semiannual reporting period. 22
The phrase “questioned costs” means costs that are questioned because of:
• An alleged violation of a provision of a law, regulation, contract, or other requirement
governing the expenditure of funds;
• A finding, at the time of the audit, that such cost is not supported by adequate
documentation (an unsupported cost); or
• A finding that expenditure of funds for the intended purpose is unnecessary or
unreasonable.
The phrase “disallowed cost” means a questioned cost that management, in a management
decision, has sustained or agreed should not be charged to the Government.
Unsupported
Amount Costs
Report Category Number
(in thousands) (in thousands)
1. Reports with no management decision at the
0 $0 $0
beginning of the reporting period
2. Reports issued during the reporting period 1 $607 $0
3. Subtotals (Item 1 plus Item 2) 1 $607 $0
4. Reports for which a management decision was
made during the reporting period:
a. Value of disallowed costs 0 $0 $0
b. Value of costs not disallowed 1 $607 $0
5. Reports with no management decision at the
end of the reporting period (Item 3 minus 0 $0 $0
Item 4)
6. Reports with no management decision within
0 $0 $0
six months of issuance
22
See Appendix II for identification of audit report involved.
36 │ October 1, 2021 – March 31, 2022
Reports With Recommendations That Funds Be Put to Better Use
TIGTA issued four audit reports during this semiannual reporting period with the
recommendation that funds be put to better use. 23 The phrase “recommendation that funds
be put to better use” means funds could be used more efficiently if management took actions
to implement and complete the recommendation, including:
• Reductions in outlays;
• Deobligations of funds from programs or operations;
• Costs not incurred by implementing recommended improvements related to
operations;
• Avoidance of unnecessary expenditures noted in pre-award reviews of contract
agreements;
• Prevention of erroneous payment of refundable credits, e.g., Earned Income Tax Credit;
or
• Any other savings that are specifically identified.
The phrase “management decision” means the evaluation by management of the findings and
recommendations included in an audit report, and the issuance of a final decision concerning
its response to such findings and recommendations, including actions deemed necessary.
Report Category Amount
Number
(in thousands)
Section 1
Reports for which no management decision had been made by the
0 $0
beginning of the reporting period
Reports issued during the reporting period 4 $1,801,635
Total Section 1 4 $1,801,635
Section 2
Reports for which management decisions were made during the reporting period
Value of recommendations agreed to by management
Based on proposed management action 4 $1,702,290
Based on proposed legislative action 0 $0
Value of recommendations to which management did not agree 1 $99,345
Total Section 2 4 24 $1,801,635
Section 3
Reports for which no management decisions had been made by the end
0 $0
of the reporting period (Sec. 1 minus Sec. 2)
Reports with no management decision within six months of issuance 0 $0
23 See Appendix II for identification of audit reports involved.
24 One report (2022-47-030) had recommendations where management both agreed and disagreed.
October 1, 2021 – March 31, 2022 │ 37
Reports With Additional Quantifiable Impact on Tax Administration
In addition to questioned costs and funds put to better use, OA has identified measures that
demonstrate the value of audit recommendations to tax administration and business
operations. These issues are of interest to executives at the IRS and the Treasury
Department, Members of Congress, and the taxpaying public, and are expressed in
quantifiable terms to provide further insight into the value and potential impact of OA’s
products and services. Including this information also promotes adherence to the intent and
spirit of the Government Performance and Results Act. 25
Definitions of these additional measures are:
Increased Revenue: Assessment or collection of additional taxes.
Revenue Protection: Ensuring the accuracy of the total tax, penalties, and interest paid to the
Federal Government.
Reduction of Burden on Taxpayers: Decreases by individuals or businesses in the need for,
frequency of, or time spent on communication, record keeping, preparation, or costs to comply
with tax laws, regulations, and IRS policies and procedures.
Taxpayer Rights and Entitlements: The protection of due process rights granted to taxpayers
by law, regulation, or IRS policies and procedures. These rights most commonly arise when
filing tax returns, paying delinquent taxes, and examining the accuracy of tax liabilities. The
acceptance of claims for and issuance of refunds (entitlements) are also included in this
category, such as when taxpayers legitimately assert that they overpaid their taxes.
Taxpayer Privacy and Security: Protection of taxpayer financial and account information
(privacy). Processes and programs that provide protection of tax administration, account
information, and organizational assets (security).
Inefficient Use of Resources: Value of efficiencies gained from recommendations to reduce
cost while maintaining or improving the effectiveness of specific programs; resources saved
would be available for other IRS programs. Also, the value of internal control weaknesses that
resulted in an unrecoverable expenditure of funds with no tangible or useful benefit in return.
Reliability of Management Information: Ensuring the accuracy, validity, relevance, and
integrity of data, including the sources of data and the applications and processing thereof,
used by the organization to plan, monitor, and report on its financial and operational
activities. This measure will often be expressed as an absolute value, i.e., without regard to
whether a number is positive or negative, of overstatements or understatements of amounts
recorded on the organization’s documents or systems.
Protection of Resources: Safeguarding human and capital assets, used by or in the custody of
the organization, from accidental or malicious injury, theft, destruction, loss, misuse,
overpayment, or degradation.
25 Pub. L. No. 103-62, 107 Stat. 285 (codified as amended in scattered sections of 5, 31, and 39 U.S.C.).
38 │ October 1, 2021 – March 31, 2022
The number of taxpayer accounts and dollar values shown in the following chart were
derived from analyses of historical data and are thus considered potential barometers
of the impact of audit recommendations. Actual results will vary depending on the
timing and extent of management’s implementation of the corresponding corrective
actions and the number of accounts or subsequent business activities affected as of
the dates of implementation. Also, a report may have issues that affect more than one
outcome measure category.
Number of
Number of Dollar Value
Outcome Measure Category 26 Taxpayer
Reports 27 (in thousands)
Accounts
Increased Revenue 2 16,026 $35,135
Revenue Protection 1 1,887 $2,150
Reduction of Burden on Taxpayers 2 2,969 $0
Taxpayer Rights and Entitlements 3 642,760 $1,571,050
Taxpayer Privacy and Security 0 0 $0
Inefficient Use of Resources 0 0 $0
Reliability of Management Information 2 12,406 $0
Protection of Resources 0 0 $0
Management did not agree with the outcome measures in the following reports:
• Increased Revenue: Reference Number 2022-30-021;
• Reliability of Management Information: Reference Numbers 2022-10-014 and
2022-30-022.
The following reports contained quantifiable impacts other than the number of taxpayer accounts and
dollar value:
• Revenue Protection: Reference Number 2022-40-013;
• Reduction of Burden on Taxpayers: Reference Numbers 2022-40-013 and
2022-46-027;
• Taxpayer Privacy and Security: Reference Number 2022-40-013;
• Inefficient Use of Resources: Reference Number 2022-10-025;
• Reliability of Management Information: Reference Numbers 2022-16-002,
2022-10-003, 2022-40-013, 2022-10-014, 2022-10-025, 2022-30-022, and
2022-46-027;
• Protection of Resources: Reference Number 2022-20-006.
26 Taxpayer information is redacted in underlying reports because TIGTA has determined that it is tax return
information related to taxpayer privacy as well as law enforcement techniques/procedures and guidelines for law
enforcement investigations or prosecutions.
27 See Appendix II for identification of audit reports involved.
October 1, 2021 – March 31, 2022 │ 39
Investigations Statistical Reports 28
Significant Investigative Achievements (October 1, 2021 through March 31, 2022)
Complaints/Allegations Received by TIGTA
Complaints Against IRS Employees 1,077
Complaints Against Non-Employees 1,326
Total Complaints/Allegations 2,403
Status of Complaints/Allegations Received by TIGTA
Investigations Initiated 661
In Process Within TIGTA 29 289
Referred to IRS for Action 285
Referred to IRS for Information Only 413
Referred to a Non-IRS Entity 30 0
Closed With No Referral 396
Closed Associated With Prior Investigation 146
Closed With All Actions Completed 213
Total Complaints/Allegations 2,403
Investigations Opened and Closed
Total Investigations Opened 1,154
Total Investigations Closed 1,228
Financial Accomplishments
Embezzlement/Theft Funds Recovered $113,072
Contract Fraud and Overpayments Recovered $8,468
Court-Ordered Fines, Penalties, and Restitution $33,174,398
Out-of-Court Settlements 0
Potentially Compromised by Bribery 0
Tax Liability of Taxpayers Who Threaten and/or Assault IRS Employees $1,655,937
IRS Assets and Resources Protected Against Malicious Loss 0
Total Financial Accomplishments $34,951,875
28 Includes the reporting requirements under the Inspector General Empowerment Act of 2016, Pub. L. No. 114-
317, 130 Stat. 1595 (codified in 5 U.S.C. App. (2018)).
29 Complaints for which final determination had not been made at the end of the reporting period.
30 A non-IRS entity includes other law enforcement entities or Federal agencies.
40 │ October 1, 2021 – March 31, 2022
Status of Closed Criminal Investigations
Criminal Referral Employee Non-Employee Total
Referred – Accepted for Prosecution 6 117 123
Referred – Declined for Prosecution 120 154 274
Referred – Pending Prosecutorial Decision 4 57 61
Total Criminal Referrals 31 130 328 458
No Referral 247 421 668
Criminal Dispositions 32
Criminal Disposition Employee Non-Employee Total
Guilty 1 67 68
Nolo Contendere (no contest) 1 0 1
Pretrial Diversion 0 0 0
Deferred Prosecution 33 1 0 1
Not Guilty 0 0 0
Dismissed 0 4 4
Total Criminal Dispositions 3 71 74
Administrative Dispositions on Closed Investigations 34
Removed/Terminated 23
Suspended/Reduction in Grade 47
Resigned/Retired/Separated Prior to Adjudication 58
Oral or Written Reprimand/Admonishment 53
Clearance Letter/Closed, No Action Taken 33
Alternative Discipline/Letter With Cautionary Statement/Other 55
Non-Employee Actions 35 641
Total Administrative Dispositions 910
31 Criminal referrals include both Federal and State dispositions.
32 Final criminal dispositions during the reporting period. These data may pertain to investigations referred
criminally in prior reporting periods and do not necessarily relate to the investigations referred criminally in the
previous Status of Closed Criminal Investigations table.
33 Generally, in a deferred prosecution, the defendant accepts responsibility for their actions and complies with
certain conditions imposed by the court. Upon the defendant’s completion of the conditions, the court dismisses
the case. If the defendant fails to fully comply, the court reinstates prosecution of the charge.
34 Final administrative dispositions during the reporting period. These data may pertain to investigations referred
administratively in prior reporting periods and do not necessarily relate to the investigations closed in the
Investigations Opened and Closed table.
35 Administrative actions taken by the IRS against non-IRS employees.
October 1, 2021 – March 31, 2022 │ 41
Summary of Investigative Reports and Criminal Referrals
Criminal Referral Breakdown
Number of Investigative Reports Issued 397
Referred to the Department of Justice for Criminal Prosecution 387
Referred to State/Local Prosecuting Authorities 10
Number of Indictments and Criminal Informations 113
Indictments 92
Criminal Informations 21
Source: TIGTA OI’s Criminal Results Management System.
Interference
During the reporting period, there was no attempt by the IRS to interfere with the
independence of TIGTA. Additionally, the IRS did not resist, object to oversight activities, or
significantly delay access to information.
Instances of Whistleblower Retaliation
During the reporting period, there was no investigation regarding whistleblower retaliation.
42 │ October 1, 2021 – March 31, 2022
36 37
Closed Investigations Involving IRS Senior Government Employees
If Declined,
Detailed Description of the Facts and Criminal Date
Disposition: Date of
Circumstances of the Investigation: Status: Referred:
Declination:
A senior Government official allegedly
encouraged and pushed employees to
use a specific contracting company Other Declined 12/21/17 12/21/17
without following established IRS
procurement procedures.
A senior Government official
attempted to unlawfully disclose PII of Other N/A N/A N/A
a taxpayer to another individual.
36 When TIGTA refers an IRS employee investigation to the IRS, the investigation remains open until all actions
are completed, including any penalty imposed upon the employee by the IRS. TIGTA closes an employee
investigation after receiving notice from the IRS of the administrative action taken in response to that
investigation.
37 For this report, a “senior Government employee” refers to an officer or employee in the Executive branch who
occupies a position classified at or above GS-15 of the General Schedule. 5 U.S.C App. § 5(f)(7).
October 1, 2021 – March 31, 2022 │ 43
Inspections and Evaluations Statistical Reports
Evaluation Reports with Significant Unimplemented Corrective Actions
The Inspector General Act requires identification of significant recommendations described in
previous semiannual reports for which corrective actions have not been completed. The following
list is based on information from the Treasury Department’s Joint Audit Management Enterprise
System (JAMES).
Reference Issued Projected
Report Title and Recommendation Summary
Number Completion
(F = Finding No., R = Recommendation No.)
Date
OVERSIGHT OF REPORTED SEXUAL HARASSMENT ALLEGATIONS NEEDS
IMPROVEMENT
March
2021-IE-R001 09/30/22 F-2, R-3: Review all relevant policies and procedures and ensure that
2021
guidance on how to address sexual harassment allegations is
available to all employees.
44 │ October 1, 2021 – March 31, 2022
Appendix I
Other Statistical Reports
Reports With Significant Unimplemented Corrective Actions
The Inspector General Act requires the identification of any outstanding unimplemented
recommendations, including the aggregate potential cost savings of those recommendations
described in previous semiannual reports for which corrective actions have not been completed.
The following list is based on information from the Treasury Department’s JAMES.38,39
Reference Projected
Issued Report Title and Recommendation Summary
Number Completion
(F = Finding No., R = Recommendation No.)
Date
INEFFICIENCIES IN PROCESSING OPERATIONS ASSISTANCE REQUESTS CAUSED
TAXPAYERS UNNECESSARY DELAYS
May
2007-10-068 12/15/22 F-3, R-1: Revise Form 12412, Operations Assistance Request, to allow
2007
requests to be closed as completed or as misrouted only if they had been
sent to the wrong Operations liaison.
THE OFFICE OF RESEARCH, ANALYSIS, AND STATISTICS NEEDS TO ADDRESS
COMPUTER SECURITY WEAKNESSES
September
2008-20-176 11/15/22 F-1, R-5: Ensure that audit and accountability controls are sufficient by
2008
requiring audit logs to be maintained a minimum of six years and to be
periodically reviewed by the security officer.
REVISING TAX DEBT IDENTIFICATION PROGRAMMING AND CORRECTING
PROCEDURAL ERRORS COULD IMPROVE THE TAX REFUND OFFSET
PROGRAM
On Hold40 F-1, R-1: Revise identification processes to include sole proprietor
March information from Form SS-4, Application for Employer Identification Number,
2016-40-028
2016 to identify individual tax refunds to offset to business tax debt.
03/15/23 F-3, R-1: Revise computer programming to use the Limited Liability
Company indicator on the business tax account to ensure that individual tax
refunds are not offset to the associated Limited Liability Company’s
business tax debt.
38 This summary data does not include recommendations that are specifically prohibited from disclosure by any provision of
law, such as 26 U.S.C. § 6103, protecting tax returns and return information, or that are specifically required by Executive
Order to be protected from disclosure in the interest of national defense or national security or in the conduct of foreign
affairs.
39 The Office of Audit has previously designated one report with unimplemented recommendations as “Sensitive But
Unclassified (SBU).” This SBU report includes subject matter that might create a risk of circumvention of the law if publicly
released. There are no potential cost savings associated with any unimplemented recommendations from this report.
40 Except where noted, recommendations designated as “On Hold” were agreed to by the IRS, but action was deferred
pending the availability of funds.
October 1, 2021 – March 31, 2022 │ 45
Reference Projected
Issued Report Title and Recommendation Summary
Number Completion
(F = Finding No., R = Recommendation No.)
Date
IMPROVEMENTS ARE NEEDED TO ENSURE THAT TAX ACCOUNTS ON THE
AUTOMATED NON-MASTER FILE ARE ACCURATELY PROCESSED
On Hold F-1, R-1: Correct Automated Non-Master File programming to compute and
assess the Failure to File penalty on Form 1040-NR, U.S. Nonresident Alien
Income Tax Return, accounts in which the Taxpayer Identification Number
May (TIN) is an Employee Identification Number.
2017-40-037
2017 On Hold F-1, R-2: Correct Automated Non-Master File programming to use the
correct date when computing the Failure to File penalty. In addition,
programming should be corrected to ensure that the proper penalty rate is
used to compute the penalty amount.
Potential Increased Revenue: $354,153
INFORMATION TECHNOLOGY: IMPROVEMENTS ARE NEEDED IN
ENTERPRISE-WIDE DISASTER RECOVERY PLANNING AND TESTING
June
2017-20-024
2017 07/15/22 F-2, R-1: Reach consensus regarding the maximum tolerable downtime or
recovery time objective for each mission-essential function.
CASE SELECTION PROCESSES RESULT IN BILLIONS OF DOLLARS IN
POTENTIAL EMPLOYER UNDERREPORTED TAX NOT BEING ADDRESSED
July
2017-40-038
2017 On Hold F-3, R-1: Establish a systemic process to match data fields to perfect
unpostable Forms W-3, Transmittal of Wage and Tax Statements.
ADDITIONAL CONTROLS ARE NEEDED TO HELP ENSURE THAT
NONRESIDENT ALIEN INDIVIDUAL PROPERTY OWNERS COMPLY WITH TAX
LAWS
August
2017-30-048
2017 On Hold F-1, R-1: Request that a revision be made to Form 1040-NR to enable
nonresident aliens to make an election under I.R.C. § 871(d) and revise
processing procedures to ensure that the IRS records the election.
FURTHER ACTIONS ARE NEEDED TO REDUCE THE RISK OF EMPLOYMENT
TAX FRAUD TO BUSINESSES THAT USE THE SERVICES OF PROFESSIONAL
EMPLOYER ORGANIZATIONS
September On Hold41 F-3, R-1: Establish processes and procedures to reduce unnecessary
2017-40-085
2017 resources expended notifying employers of an address change when
programming incorrectly identifies an address change resulting from minor
formatting revisions.
PROCESSES NEED TO BE IMPROVED TO IDENTIFY INCOMPLETE AND
FRAUDULENT APPLICATIONS FOR INDIVIDUAL TAXPAYER IDENTIFICATION
NUMBERS
January
2018-40-010 On Hold F-3, R-2: Ensure that programming changes are made to require mandatory
2018
review when the Real-Time System alerts tax examiners that an applicant is
using duplicate supporting documents as has previously been used to obtain
an ITIN.
41 This recommendation was agreed to by the IRS, but was placed on “On Hold” because the IRS is awaiting input from
another agency.
46 │ October 1, 2021 – March 31, 2022
Reference Projected
Issued Report Title and Recommendation Summary
Number Completion
(F = Finding No., R = Recommendation No.)
Date
ACTIONS ARE NEEDED TO REDUCE THE RISK OF FRAUDULENT USE OF
EMPLOYER IDENTIFICATION NUMBERS AND TO IMPROVE THE
EFFECTIVENESS OF THE APPLICATION PROCESS
On Hold F-2, R-1: Correct programming to reject Employer Identification Number
applications when an Employer Identification Number has previously been
assigned to the same sole proprietor and to reject applications when IRS
February
2018-40-013 data indicate that the sole proprietor is deceased.
2018
On Hold F-3, R-1: Perform an assessment to determine how an additional field could
be added to the Business Master File so that both the decedent Social
Security Number and a responsible party TIN can be captured for estates
and trusts.
On Hold F-3, R-5: Develop programming to reject estate applications if the decedent
TIN is not that of a deceased individual.
ACTIVE DIRECTORY OVERSIGHT NEEDS IMPROVEMENT AND CRIMINAL
INVESTIGATION COMPUTER ROOMS LACK MINIMUM SECURITY CONTROLS
09/15/23 F-2, R-1: Complete a cost analysis to: 1) determine the efficacy of relocating
June Criminal Investigation assets in each of the field offices to existing IRS
2018-20-034
2018 computer rooms versus upgrading the Criminal Investigation computer
rooms to ensure that assets are protected in accordance with Federal and
IRM security requirements, and 2) implement the most cost effective
solution.
IMPROVEMENTS ARE NEEDED IN THE WITHHOLDING COMPLIANCE
PROGRAM
September On Hold F-3, R-2: Analyze the current selection criteria used by the Withholding
2018-30-072 Compliance System to determine if the taxpayers identified for systemic
2018
lock-in letter issuance are the best use of limited resources. This would
include potentially identifying taxpayers with multiple years of
under-withholding and the percentage of inventory that includes nonfilers.
ELECTRONIC AUTHENTICATION SECURITY CONTROLS HAVE IMPROVED, BUT
CONTINUED PROGRESS IS NEEDED TO ENSURE THE PROTECTION OF
PUBLIC-FACING APPLICATIONS
April 02/15/23 F-1, R-1: Ensure that public-facing legacy applications are complying with
2019-20-017
2019 National Institute of Standards and Technology Special Publication 800-63-3
and that an implementation plan includes specific timelines for
accomplishing full compliance of legacy applications.
IMPLEMENTATION OF THE TAX CUTS AND JOBS ACT DEEMED REPATRIATION
TAX PRESENTED SIGNIFICANT CHALLENGES
May
2019-34-033 On Hold F-2, R-1: Take steps to ensure that Section 965 payments are recorded with
2019
the correct designated payment code.
BILLIONS OF DOLLARS OF POTENTIALLY ERRONEOUS CARRYFORWARD
CLAIMS ARE STILL NOT BEING ADDRESSED
August
2019-40-044
2019 09/15/22 F-1, R-2: Identify and examine returns with discrepancies of General
Business Credit carryforward claims.
October 1, 2021 – March 31, 2022 │ 47
Reference Projected
Issued Report Title and Recommendation Summary
Number Completion
(F = Finding No., R = Recommendation No.)
Date
ADDITIONAL ACTIONS ARE NEEDED TO REDUCE ALIMONY REPORTING
DISCREPANCIES ON INCOME TAX RETURNS
On Hold F-2, R-1: Include the validation of the alimony recipient TIN as part of the
August
2019-40-048 IRS’s tax return processing systemic TIN validation process.
2019
On Hold F-2, R-2: Modify Error Resolution System programming to send both e-filed
and paper tax returns that contain an invalid recipient TIN to the Error
Resolution function for review and correspondence with the taxpayer.
THE BRING YOUR OWN DEVICE PROGRAM’S SECURITY CONTROLS NEED
IMPROVEMENT
September
2019-20-046 09/15/22 F-3, R-1: Ensure the retention of Bring Your Own Device program application
2019
audit logs for the appropriate period and periodic review of the application
audit logs by an independent source.
ADDITIONAL ACTIONS ARE NEEDED TO FURTHER REDUCE UNDELIVERABLE
MAIL
On Hold F-1, R-1: Develop Servicewide processes and procedures to ensure that all
operating divisions suppress the issuance of nonstatutory notices to
September taxpayers that have an undelivered mail indicator on their account; suppress
2019-40-074 the issuance of correspondence when a taxpayer’s address of record is an
2019
IRS campus; and research and update taxpayer addresses for which the
U.S. Postal Service returns undeliverable mail with a yellow label that
provides a more current address.
On Hold F-2, R-1: Install and use hygiene software to perfect taxpayer addresses on
the ITIN Real-Time System.
THE USE OF SCHEDULE K-1 DATA TO ADDRESS TAXPAYER NONCOMPLIANCE
CAN BE IMPROVED
September
2019-30-078 09/15/22 F-1, R-3: Establish a process to use more e-filed Schedule K-1 data for
2019
noncompliance identification and determine the feasibility of transcribing
more data from paper Schedule K-1.
IMPROVEMENTS ARE NEEDED TO ENSURE THAT CONSISTENT SUITABILITY
CHECKS ARE PERFORMED FOR PARTICIPATION IN INTERNAL REVENUE
SERVICE PROGRAMS
November On Hold F-4, R-2: Develop processes and procedures to ensure that continuous
2020-40-005
2019 criminal background checks are conducted on all program participants as
part of the Federal Bureau of Investigations Records of Arrests and
Prosecutions Back Program.
RESULTS OF THE 2019 FILING SEASON
On Hold F-2, R-2: Implement programming to compute the correct allowable increase
January in the standard deduction for tax returns for which a taxpayer does not have
2020-44-007
2020 an entry for the spouse but checks one or more of the checkboxes that
indicate that the spouse was age 65 or older and/or was blind.
48 │ October 1, 2021 – March 31, 2022
Reference Projected
Issued Report Title and Recommendation Summary
Number Completion
(F = Finding No., R = Recommendation No.)
Date
ACTIVE DIRECTORY OVERSIGHT NEEDS IMPROVEMENT
February 12/15/24 F-2, R-6: Ensure that business role account passwords are appropriately
2020-20-006
2020 configured to expire and require that Personal Identity Verification cards be
used in accordance with policy.
AUTHORITIES PROVIDED BY THE INTERNAL REVENUE CODE ARE NOT
EFFECTIVELY USED TO ADDRESS ERRONEOUS REFUNDABLE CREDIT AND
WITHHOLDING CREDIT CLAIMS
04/15/22 F-2, R-2: Develop processes and procedures to manually set a
February recertification indicator on tax accounts associated with refundable credit
2020-40-008 claims that were disallowed through the Automated Questionable Credit
2020
program until a systemic process is implemented.
04/15/22 F-2, R-4: Ensure that a systemic process is implemented to set the
recertification indicator on taxpayers’ accounts when refundable credit
claims are disallowed as part of the IRS’s Automated Questionable Credit
program.
COMPLEXITY AND INSUFFICIENT OVERSIGHT OF THE FREE FILE PROGRAM
RESULT IN LOW TAXPAYER PARTICIPATION
February
2020-40-009 02/15/24 F-1, R-2: Require Free File Inc. members to fully disclose all criteria on the
2020
IRS.gov Free File web page that taxpayers must meet to e-file their Federal
tax return for free.
IMPROPER PAYMENT REPORTING HAS IMPROVED; HOWEVER, THERE HAVE
BEEN NO SIGNIFICANT REDUCTIONS TO THE BILLIONS OF DOLLARS OF
IMPROPER PAYMENTS
April
2020-40-025 09/15/22 F-1, R-1: Work with the Department of Health and Human Services to
2020
develop a comprehensive risk assessment of improper Premium Tax Credit
payments, including the risk of Advanced Premium Tax Credit improper
payments.
SOME CORRECTIVE ACTIONS TO ADDRESS REPORTED INFORMATION
TECHNOLOGY WEAKNESSES WERE NOT FULLY AND EFFECTIVELY
IMPLEMENTED AND DOCUMENTED
June
2020-20-022 06/15/22 F-1, R-3: Verify through testing that the IRS Information Technology
2020
organization is able to recover mission-essential functions identified by the
Cybersecurity function within the maximum tolerable downtimes or recovery
time objectives.
CONTROLS OVER THE MANAGEMENT AND SECURITY OF OFFICIAL
PASSPORTS NEED IMPROVEMENT
August 03/10/23 F-3, R-1: Consider including a requirement for independent periodic or
2020-10-051
2020 annual surprise security reviews of the passport offices to ensure that
passport personnel are adhering to updated guidelines for securing and
safeguarding passports.
October 1, 2021 – March 31, 2022 │ 49
Reference Projected
Issued Report Title and Recommendation Summary
Number Completion
(F = Finding No., R = Recommendation No.)
Date
THE ENTERPRISE CASE MANAGEMENT SOLUTION DEVELOPMENT IS
DELAYED, AND ADDITIONAL ACTIONS ARE NEEDED TO DEVELOP A
DECOMMISSIONING STRATEGY
September
2020-20-061 09/15/23 F-3, R-1: Coordinate with the business operating divisions to perform the
2020
fit-gap analysis on all case management systems to maximize the Enterprise
Case Management (ECM) solution's functionality and ensure that the
majority of legacy case management systems are consolidated.
IMPROVEMENTS ARE NEEDED TO ENSURE THAT WIRELESS NETWORKS ARE
SECURE
10/15/22 F-1, R-1: Ensure that the 25 wireless network security-related weaknesses
September
2020-20-063 are resolved and that the evidence supporting the weakness closures is
2020
updated in the Treasury Federal Information Security Modernization Act of
2014 Inventory Management System for subsequent testing and closure
approval.
PROCESSES DO NOT ENSURE THAT INDIVIDUAL TAXPAYER IDENTIFICATION
NUMBERS ARE ISSUED ONLY TO QUALIFYING INDIVIDUALS WITH A TAX
ADMINISTRATION NEED
04/15/22 F-3, R-4: Review the 2,239 ITINs with duplicate documents that TIGTA
identified and take appropriate actions to revoke or deactivate the ITINs.
04/15/22 F-3, R-6: Review the 89 ITINs identified as revoked and still active and the
September 51 ITINs assigned to deceased individuals that are not locked that TIGTA
2020-40-064 identified and take appropriate action to deactivate the ITINs or add a
2020
deceased lock on the tax account.
On Hold F-7, R-1: Develop processes and procedures to identify retroactive claims
erroneously paid and erroneously disallowed due to tax examiner errors.
Once these claims are identified, take steps to recover erroneous credit
payments or ensure that taxpayers receive the benefits to which they are
entitled.
Potential Funds Put to Better Use: $4,743,068
THE INTERNAL REVENUE SERVICE CAN IMPROVE TAXPAYER COMPLIANCE
FOR VIRTUAL CURRENCY TRANSACTIONS
September
2020-30-066 On Hold42 F-1, R-1: Continue efforts to close the virtual currency information gap by
2020
issuing guidance clarifying the proper information reporting associated with
virtual currency transactions.
BILLIONS IN POTENTIAL TAXES WENT UNADDRESSED FROM UNFILED
RETURNS AND UNDERREPORTED INCOME BY TAXPAYERS THAT RECEIVED
FORM 1099-K INCOME
December 10/15/22 F-1, R-3: Define high-income business nonfilers and create a strategy to
2021-30-002
2020 work these cases so that all high-income business nonfiler cases will have
the opportunity to be selected and worked. Include the business
high-income strategy in the IRS Nonfiler Strategy plan.
Potential Increased Revenue: $1,197,629,572
42 This recommendation was agreed to by the IRS, but was placed on “On Hold” because the process by which guidance is
developed is not within the IRS’s sole control.
50 │ October 1, 2021 – March 31, 2022
Reference Projected
Issued Report Title and Recommendation Summary
Number Completion
(F = Finding No., R = Recommendation No.)
Date
IMPROVEMENTS HAVE BEEN MADE, BUT CONTROLS NEED TO BE
STRENGTHENED TO DETECT IMPROPER SELF-EMPLOYED RETIREMENT
DEDUCTIONS
On Hold F-1, R-1: Revise procedures for determining eligibility for the self-employed
December
2021-10-007 retirement deduction to include Schedule SE, Self-Employment Tax, as
2020
evidence of self-employment.
10/15/22 F-2, R-1: Consider for examination the 16 tax returns with retirement
contribution deductions over $400,000 for which TIGTA identified only as an
associated Defined Contribution Plan.
EXPANSION OF SELF-CORRECTION FOR ELECTRONIC FILERS AND OTHER
IMPROVEMENTS COULD REDUCE TAXPAYER BURDEN AND COSTS
ASSOCIATED WITH TAX RETURN ERROR RESOLUTION
December On Hold F-4, R-1: Develop processes to systemically monitor the Error Resolution
2021-40-008 program, including processes to monitor error code volumes real-time as
2020
well as in comparison to historical data.
On Hold F-4, R-2: Develop processes and procedures to retain and provide access to
historical Error Resolution System data, including actions taken by tax
examiners.
PROCESSES EXIST TO ASSIST TAXPAYERS WITH MISDIRECTED REFUNDS,
BUT ADDITIONAL CONTROLS COULD FURTHER HELP TO PREVENT THEM
January
2021-40-012 On Hold F-2, R-1: Create a closing code to be entered onto a tax account when a
2021
refund inquiry is closed that denotes the cause of the refund being
misdirected, i.e., IRS error, taxpayer error, or bank error.
EMPHASIS ON UNRELATED BUSINESS INCOME TAX ENFORCEMENT SHOULD
BE ENHANCED
04/15/22 F-3, R-1: Implement safeguards to ensure the accuracy of the Reporting
Compliance Case Management System Closing Record to avoid material
errors that affect information reports based on these inputs, which are relied
February upon by internal and external stakeholders.
2021-30-016
2021 04/15/22 F-3, R-2: Replace the respective IRM sections that provide instructions on
the Form 5599, TE/GE Examined Closing Record, with the revised Reporting
Compliance Case Management System Closing Record, and clarify any
differences in how examiners should complete this process for appealed
examinations.
October 1, 2021 – March 31, 2022 │ 51
Reference Projected
Issued Report Title and Recommendation Summary
Number Completion
(F = Finding No., R = Recommendation No.)
Date
ADDITIONAL SECURITY PROCESSES ARE NEEDED TO PREVENT
UNAUTHORIZED RELEASE OF TAX INFORMATION THROUGH THE INCOME
VERIFICATION EXPRESS SERVICE PROGRAM
07/15/22 F-1, R-1: Ensure that sufficient resources are allocated to the Income
Verification Express Service (IVES) Program to timely identify and suspend
IVES participants that do not complete the electronic signature certification
and submit the annual independent audit report as required.
04/15/22 F-1, R-2: Maintain a current list of all IVES participants approved to submit
electronically signed requests and that are meeting all electronic signature
program requirements.
05/15/22 F-1, R-3: Update the transcript request form to include a box indicating
whether the form was signed electronically by the taxpayer, or require IVES
participants to submit electronically signed transcript requests in a separate
batch from those that are not electronically signed.
On Hold F-1, R-4: Implement a process to compare electronically signed transcript
requests received from IVES participants to a current list of all IVES
participants allowed to submit electronically signed requests to prevent the
processing of any requests submitted by IVES participants that are not
approved to participate in the electronic signature program.
February 07/15/22 F-1, R-5: Provide clear guidance on the content of the annual independent
2021-45-017 audit report to be submitted by IVES participants using electronic signatures.
2021
05/15/22 F-3, R-1: Update the transcript request form to include a separate line to
identify the client, such as the client's business name, address, and
telephone number.
05/15/22 F-3, R-2: Update the transcript request form instructions to require
identifying information for the client in cases in which the transcript request
is submitted by an IVES participant on behalf of their client that will
ultimately receive the taxpayer’s transcript.
06/15/22 F-3, R-4: Allocate sufficient resources to the IVES Program to ensure that
compliance reviews of participants are timely and consistently performed
each fiscal year.
On Hold F-4, R-1: Allocate sufficient resources to the IVES Program to perform
suitability checks that are consistent with other IRS programs at the time of
enrollment and implement a continuous tax compliance check to ensure
that they remain suitable for the program.
06/15/22 F-4, R-2: Perform suitability assessment checks on the 319 IVES
participants that did not undergo suitability checks prior to acceptance and
are still active in the IVES Program.
02/15/23 F-6, R-1: Ensure that IVES Program internal guidelines are updated in the
IRM to include key processes and procedures.
THE INTERNAL REVENUE SERVICE FACES CHALLENGES IN ADDRESSING THE
GROWTH OF PEER-TO-PEER PAYMENT APPLICATION USE
April 11/15/22 F-3, R-1: Consider requiring the completion of the Internet use and
2021-30-022
2021 e-commerce income activity minimum income probe for all individual
business, corporate, and other business taxpayers, including those
designated as limited-scope examinations.
TAXPAYER FIRST ACT: DATA SECURITY IN THE IDENTITY THEFT TAX REFUND
FRAUD INFORMATION SHARING AND ANALYSIS CENTER
May
2021-25-025 04/15/24 F-3, R-1: Ensure that the Information Sharing and Analysis Center’s
2021
alternate processing site is converted to a hot site that achieves the
maximum tolerable downtime to prevent any filing season delays.
52 │ October 1, 2021 – March 31, 2022
Reference Projected
Issued Report Title and Recommendation Summary
Number Completion
(F = Finding No., R = Recommendation No.)
Date
BACKUP WITHHOLDING NONCOMPLIANCE AND UNDERREPORTED
EMPLOYMENT TAXES CONTINUE TO CONTRIBUTE BILLIONS OF DOLLARS TO
THE TAX GAP
May
2021-40-030
2021
10/15/22 F-1, R-1: Develop processes and procedures to identify and address the
reporting of income on information returns using a decedent TIN.
THE INDIAN TRIBAL GOVERNMENT FUNCTION NEEDS TO STRENGTHEN
INTERNAL CONTROLS AND PERFORMANCE MEASURES
11/15/22 F-1, R-3: Ensure that Outreach and Education (O&E) management oversees
and complies with reporting and approval requirements for O&E events,
ensure that O&E activity data are complete and reliable by developing a
single inventory control system to electronically track and report O&E event
data and documentation, and reinstitute reporting and documenting
May feedback from completed O&E events to capture facts that support and
2021-10-040
2021 10/15/22 inform future O&E decisions.
F-2, R-1: Routinely obtain Indian Tribal Government taxpayer feedback and
08/15/22 use the results to measure and improve the program.
F-2, R-2: Revise and report Indian Tribal Government performance
measures to include the business results for O&E and taxpayer assistance
efforts and establish an objective methodology to assess the effectiveness
10/15/22 of O&E events.
F-4, R-1: Review all current Indian Tribal Government function Memoranda
of Understanding and update them accordingly.
IMPROVEMENTS ARE NEEDED TO MORE
**************************** THE VIRTUAL HOST
INFRASTRUCTURE PLATFORM 43
June
2021-20-024 06/15/22
2021
F-3, R-1: Finalize, approve, and implement a Platform Audit Plan for the
virtual host infrastructure platform.
OPPORTUNITIES EXIST TO IMPROVE HIRING AND RETAINING EMPLOYEES
WITH INFORMATION TECHNOLOGY EXPERTISE
06/15/22 F-1, R-1: Develop policies and procedures that require management to
track, review, and assess mission-critical skill gap reports for their staff and
June work with their staff to address formal and informal training needs.
2021-20-028
2021 06/15/22 F-1, R-2: Require all Information Technology organization functions to
participate in the skill gap mitigations.
06/15/22 F-3, R-1: Consider using the retention incentive when an employee with
unusually high or unique qualifications would be likely to leave Federal
service, significantly affecting the mission.
43 Redaction due to subject matter that might create a risk of circumvention of the law if publicly released.
October 1, 2021 – March 31, 2022 │ 53
Reference Projected
Issued Report Title and Recommendation Summary
Number Completion
(F = Finding No., R = Recommendation No.)
Date
CRIMINAL RESTITUTION ASSESSMENT PROCEDURES NEED IMPROVEMENT
08/15/22 F-1, R-1: Develop procedures to ensure that Criminal Investigation is timely
sending closing documents to the Technical Services Unit. This includes
receiving acknowledgement from the Small Business/Self-Employed Division
that the documents were received.
June Potential Increased Revenue: $344,817,010
2021-30-033 10/15/22 F-1, R-2: Review the existing process controls to ensure that restitution
2021
assessments are made in a timely manner. This review could be conducted
when completing periodic reviews of the restitution program and addressing
any barriers to the timely assessment of restitution.
12/15/22 F-2, R-1: Establish monitoring procedures to provide reasonable assurance
that all interest and penalties incorrectly assessed to Restitution-Based
Assessment accounts are removed.
ASSESSMENT OF PROCESSES TO VERIFY TENTATIVE CARRYBACK REFUND
ELIGIBILITY
04/15/22 F-1, R-1: Review the additional 574 late-filed tentative refund applications
that TIGTA identified and determine if the applications were processed in
error. If so, take appropriate action to either reverse the erroneously
approved refund or reject the application from processing.
June
2021-46-035 04/15/22 F-1, R-2: Establish processes and procedures to identify late-filed tentative
2021
refund applications and ensure that these applications are rejected from
processing.
04/15/22 F-2, R-1: Ensure that tentative refund applications associated with
taxpayers whose tax accounts have an identity theft indicator are sent to an
identity theft liaison for review as required.
Potential Funds Put to Better Use: $1,785,620
CONTROLS OVER THE INTERNAL REVENUE SERVICE CONTRACTOR TAX
CHECK PROCESS NEED TO BE IMPROVED
07/29/22 F-2, R-1: Coordinate with the Treasury Suspension and Debarment Official
to identify a required time frame and sample format for what information
June
2021-10-039 should be included in the reports that the IRS provides on contractors with
2021
Federal tax delinquencies. Revise the IRS Acquisition Policy Procedures,
Guidance, and Information to specify a required time frame for the reporting
to the Suspension and Debarment Official and include a sample reporting
format to help ensure that all required information is included.
EFFORTS TO ADDRESS THE COMPLIANCE RISK OF UNDERREPORTING OF
S CORPORATION OFFICERS’ COMPENSATION ARE INCREASING, BUT MORE
ACTION CAN BE TAKEN
August 10/15/22 F-3, R-1: Evaluate the 151 S corporations with nonresident alien
2021-30-042 shareholders to ensure that they meet the filing requirements for
2021
S corporations.
10/15/24 F-3, R-2: Evaluate the benefits of creating controls to identify invalid
S corporations and mitigate the risk of noncompliance when shareholders
are found to be nonresident aliens.
54 │ October 1, 2021 – March 31, 2022
Reference Projected
Issued Report Title and Recommendation Summary
Number Completion
(F = Finding No., R = Recommendation No.)
Date
SELECT POST-AWARD FINANCIAL MANAGEMENT AND DOCUMENTATION
CONTROLS FOR INFORMATION TECHNOLOGY SERVICE CONTRACTS NEED
IMPROVEMENT
06/15/22 F-1, R-1: Update the contract award and modification dollar amounts
August reported incorrectly in the Federal Procurement Data System identified
2021-20-046
2021 during this review to reflect the correct amounts.
07/15/22 F-1, R-2: Enhance controls to ensure that the correct contract award and
modification amounts are consistently reflected throughout each document.
Potential Questioned Cost: $893,804
FISCAL YEAR 2021 STATUTORY AUDIT OF COMPLIANCE WITH LEGAL
GUIDELINES RESTRICTING THE USE OF RECORDS OF TAX ENFORCEMENT
RESULTS
06/15/22 F-1, R-1: Ensure that the four Section 1204(a) violations identified by TIGTA
are discussed with the responsible manager to ensure that the manager
understands the guidelines related to the use of Record of Tax Enforcement
Results.
06/15/22 F-1, R-2: Ensure that the instances of noncompliance identified within this
report, associated with the prohibition on including Record of Tax
Enforcement Results in a self-assessment, are discussed with the
responsible employees and their managers so that they understand the IRS
policy that Record of Tax Enforcement Results should not be used in self-
assessments.
August 07/15/22 F-1, R-3: Consider updating the Form 12450, IRS Performance
2021-30-052
2021 Management System Manager Performance Agreement, to include a
warning when evaluating managers on the use of quantity measures and
their potential relationship to tax enforcement results.
07/15/22 F-1, R-4: Ensure that RRA 98 Section 1204(b) instances of noncompliance
are discussed with the responsible managers to ensure that they
understand the retention standard documentation.
08/15/22 F-2, R-1: Establish a control to ensure that employees’ Section 1204
designations are validated in HR Connect during employee transfers
between positions or functions.
08/15/22 F-2, R-2: Consider establishing an annual reminder to all employees and
management to review their Section 1204 designation in HR Connect.
06/15/22 F-3, R-1: Ensure that internal procedures and controls are documented,
established, and implemented as soon as possible and no later than the
currently established due date of December 23, 2021.
FISCAL YEAR 2021 STATUTORY REVIEW OF RESTRICTIONS ON DIRECTLY
CONTACTING REPRESENTED TAXPAYERS
04/15/22 F-1, R-1: Ensure that examiners always include Letter 937 (Transmittal
Letter for Power of Attorney) in electronic examination files when issuing
Letter 525 (30-day letter) for examinations with Power Of Attorney (POA)
notice requirements to document compliance and increase quality control
August efforts to ensure that compliance is improved regarding the notice
2021-30-054 requirement.
2021
06/30/22 F-1, R-2: Update procedures to ensure that a manual process exists while
the business unit awaits the creation of the ECM system. Once
implemented, the new ECM system should systemically identify taxpayers
with a valid Form 2848, Power of Attorney and Declaration of
Representative, and determine if the POA should receive notices or letters.
05/15/22 F-2, R-2: Revise IRM 4.19.13.10.1(2) to clarify that the POA must be
contacted in lieu of the taxpayer when a valid POA is present.
October 1, 2021 – March 31, 2022 │ 55
Reference Projected
Issued Report Title and Recommendation Summary
Number Completion
(F = Finding No., R = Recommendation No.)
Date
THE EARNED INCOME TAX CREDIT EXAMINATION COMPLIANCE STRATEGY
CAN BE IMPROVED
08/15/22 F-1, R-2: Evaluate the current programming for the pre-refund selection
process to ensure that cases identified by both Questionable Refund
September Program and Dependent Database selection pools are prioritized for
2021-30-051
2021 Dependent Database pre-refund selection.
03/15/23 F-1, R-3: Evaluate and revise the scoring process to ensure that the cases
with the highest risk are scored as such. This process should include adding
weight to cases with higher Questionable Refund Program and Dependent
Database scores and Duplicate TIN repeaters.
FISCAL YEAR 2021 REVIEW OF COMPLIANCE WITH LEGAL GUIDELINES
WHEN CONDUCTING SEIZURES OF TAXPAYERS’ PROPERTY
September
2021-30-055
2021 11/15/22 F-1, R-1: Require Advisory to review Form 2433, Notice of Seizure, for real
property seizures during the pre-seizure review process.
LAPTOP AND DESKTOP SANITIZATION PRACTICES NEED IMPROVEMENT
11/15/22 F-1, R-1: Ensure that the IRS only uses sanitization products that are
approved by the Department of Defense, the Department of Homeland
September Security, or the National Security Agency.
2021-20-056
2021 11/15/22 F-1, R-2: Ensure that sanitization equipment and procedures are tested
annually to verify that the intended sanitization results are being achieved.
11/15/22 F-3, R-1: Ensure that hard disk sanitization results are independently
verified using an approved verification software tool.
IMPROVEMENTS ARE NEEDED TO IDENTIFY POTENTIALLY FRAUDULENT
INDIVIDUAL INTERNATIONAL TAX RETURNS DURING PROCESSING
10/15/22 F-1, R-4: Review the 1,368 Forms 1040-PR, Self-Employment Tax Return -
Puerto Rico, and 1040-SS, U.S. Self-Employment Tax Return, TIGTA
identified and take actions to recover erroneous credits.
Potential Funds Put to Better Use: $2,366,596
04/15/22 F-3, R-2: Ensure that Error Resolution tax examiners are aware of the proper
procedures for resolving Additional Child Tax Credit claims on international
returns in which the taxpayer’s TIN or spouse’s TIN was not issued prior to
the due date of the tax return and in which the taxpayer does not meet the
qualifying child requirements.
10/15/22 F-3, R-3: Review the 99 questionable returns that received the Additional
Child Tax Credit that TIGTA identified and take actions to recover any
September erroneous Additional Child Tax Credit received.
2021-40-057 Potential Funds Put to Better Use: $170,901
2021
10/15/22 F-6, R-1: Review the 36,373 returns that TIGTA identified that potentially
received erroneous Additional Opportunity Tax Credit and take actions to
recover any erroneous Additional Opportunity Tax Credit received.
Potential Funds Put to Better Use: $33,151,406
10/15/22 F-6, R-3: Review the 13,924 returns that TIGTA identified that potentially
received erroneous refundable credits and take actions to recover any
erroneous refundable credits received.
Potential Funds Put to Better Use: $50,600,852
09/15/22 F-6, R-4: Develop processes to systemically identify and address potentially
erroneous tax returns filed by international taxpayers filing the incorrect tax
forms to receive refundable credits, including returns filed by nonresidents
claiming the Additional Opportunity Tax Credit, for which they are not eligible
to receive.
56 │ October 1, 2021 – March 31, 2022
Reference Projected
Issued Report Title and Recommendation Summary
Number Completion
(F = Finding No., R = Recommendation No.)
Date
EFFORTS TO IMPLEMENT TAXPAYER FIRST ACT SECTION 2101 HAVE BEEN
MOSTLY SUCCESSFUL
September 08/15/22 F-1, R-1: Ensure that the Chief Information Officer’s information technology
2021-25-058 oversight requirements of Taxpayer First Act § 2101 are addressed.
2021
08/15/22 F-2, R-1: Review reporting options and implement the most effective
approach for identifying the acquisition of information technology products
and services.
ENTERPRISE CASE MANAGEMENT DEPLOYED ITS INITIAL RELEASE, BUT
PROCESS IMPROVEMENTS ARE NEEDED FOR FUTURE RELEASES
September 09/15/22 F-1, R-1: Ensure that the ECM program optimizes and fully implements the
2021-20-059
2021 selected Scaled Agile Environment configuration’s core competencies.
09/15/22 F-2, R-1: Ensure that quantifiable metrics are in place to allow traceability of
the ECM program progress from planning through decommissioning.
IMPROVEMENTS TO THE CORRESPONDENCE EXAMINATION PROCESS MAY
INCREASE TAXPAYER COMPLIANCE AND COLLECTION POTENTIAL
10/15/22 F-2, R-1: Change the subsequent return process to address only subsequent
September year returns in which the taxpayer did not respond to the initial contact
2021-30-061
2021 levels for the current examination.
10/15/22 F-2, R-2: Provide a reminder to ensure that tax examiners and managers are
following processes for subsequent year returns during the correspondence
examination process.
****************PLATFORM MANAGEMENT NEEDS IMPROVEMENT 44
10/15/22 F-1, R-1: Ensure that the official inventory repository is accurate and
complete and implement an inventory reconciliation process to ensure that
administrative tools, such as vulnerability, configuration scanning tools, and
the Information System Contingency Plan inventory align with the official
inventory repository.
September 10/15/22 F-1, R-2: Ensure that the Platform’s servers are effectively defined to
2021-20-063 improve the accuracy and completeness of the data reported to the official
2021
inventory repository.
07/15/22 F-2, R-2: Create an automated process to ensure that all user accounts
have logged on within the allotted time frames and disable or remove
inactive users.
10/15/22 F-3, R-2: Evaluate and implement controls to provide an age tracking
capability for vulnerabilities detected by the configuration
compliance-scanning tool.
EFFECTS OF THE COVID-19 PANDEMIC ON BUSINESS TAX RETURN
PROCESSING OPERATIONS
September 01/15/23 F-2, R-1: Evaluate the feasibility to direct additional types of payments from
2021-46-064
2021 Tax Processing Centers to lockbox sites. This evaluation should also assess
the feasibility of directing payments received by field office employees to
lockbox sites for processing.
44 Redaction due to subject matter that might create a risk of circumvention of the law if publicly released.
October 1, 2021 – March 31, 2022 │ 57
Reference Projected
Issued Report Title and Recommendation Summary
Number Completion
(F = Finding No., R = Recommendation No.)
Date
THE ENDPOINT DETECTION AND RESPONSE SOLUTION HAS BEEN
DEPLOYED TO MOST WORKSTATIONS AND IS OPERATING AS INTENDED,
BUT IMPROVEMENTS ARE NEEDED
06/15/22 F-1, R-1: Ensure that User and Network Services personnel promptly review
September the workstations in the in-use inventory status and on the network to ensure
2021-20-065
2021 that the endpoint detection and response solution is properly deployed to all
workstations.
08/15/22 F-1, R-2: Ensure that the endpoint detection and response solution is
deployed on all workstations that will be brought online and used for IRS
business prior to being issued to users.
THE DATA AT REST ENCRYPTION PROGRAM HAS MADE PROGRESS WITH
IDENTIFYING ENCRYPTION SOLUTIONS, BUT PROJECT MANAGEMENT NEEDS
IMPROVEMENT
08/15/22 F-1, R-1: Ensure that the Data at Rest Encryption (DARE) program follows
Enterprise Life Cycle requirements, including those for regular milestone
exits prior to deployment to a production environment, and ensure that
Enterprise Life Cycle artifacts are reviewed, updated, and approved as
September required.
2021-20-066 08/15/22 F-1, R-2: Ensure that the DARE program follows the established process to
2021
develop and baseline the Integrated Master Schedule, and verify the existing
schedule information is accurate, including realistic time frames and task
start and end dates.
08/15/22 F-1, R-3: Ensure that the DARE program receives adequate management
oversight, including following established processes, to timely address
significant changes to the DARE program scope, risks, or constraints.
08/15/23 F-2, R-1: Ensure that data at rest is encrypted prior to being transferred
from the IRS to the Private Collection Agencies.
FISCAL YEAR 2021 STATUTORY REVIEW OF COMPLIANCE WITH NOTICE OF
FEDERAL TAX LIEN FILING DUE PROCESS PROCEDURES
11/15/22 F-1, R-1: Correct IRM references to the Automated Lien System User Guide
September for Automated Collection System Support function employees to update
2021-30-067 delivery status when undeliverable mail is received.
2021
02/15/23 F-1, R-2: Issue a Servicewide Electronic Research Program Alert to
Automated Collection System Support functions reminding employees to
follow IRM instructions when processing undeliverable Notices of Federal
Tax Lien, once the IRM section is updated.
FISCAL YEAR 2021 STATUTORY REVIEW OF COMPLIANCE WITH LEGAL
GUIDELINES WHEN ISSUING LEVIES
11/15/22 F-1, R-1: Update the IRM to clarify the procedures for the Federal Payment
Levy Program and Municipal Tax Levy Program so that revenue officers do
not improperly reverse Collection Due Process (CDP) notices.
02/15/23 F-1, R-4: Ensure that corrective programming is implemented so that, when
September State levy proceeds are received for a taxpayer account in fully paid status,
2021-30-069 2021 the account is not frozen with a pending additional tax assessment
transaction and that a post-levy CDP notice is properly issued.
05/15/22 F-2, R-1: Ensure that corrective programming is implemented so that the
Automated Collection System will block levies for which the final CDP notice
is reversed or disqualified.
02/15/23 F-3, R-1: Ensure that corrective programming changes are implemented to
block the issuance of levies when previous CDP notices were reversed and
not reissued.
58 │ October 1, 2021 – March 31, 2022
Reference Projected
Issued Report Title and Recommendation Summary
Number Completion
(F = Finding No., R = Recommendation No.)
Date
ADDRESSING COMPLEX AND INCONSISTENT EARNED INCOME TAX CREDIT
AND ADDITIONAL CHILD TAX CREIT RULES MAY REDUCE UNINTENTIONAL
ERRORS AND INCREASE PARTICIPATION
12/15/22 F-1, R--1: Modify the language in soft notices sent to individuals who claim a
September
2021-40-070 multiple-use child’s TIN to instruct individuals to amend their return if they
2021
determine the child’s TIN was used in error.
12/15/22 F-1, R-2: Establish processes to notify individuals who claim a multiple-use
child’s TIN to the potential theft of their child’s identity and provide actions
they can take to report the theft and protect their child’s identity from future
misuse.
October 1, 2021 – March 31, 2022 │ 59
Other Statistical Reports
The Inspector General Empowerment Act of 2016 requires Inspectors General to address the
following issues for the Offices of Audit and Inspections and Evaluations: 45
Issue Result for TIGTA
Interference/Access to Information
Report any attempt to interfere with the independence of
TIGTA, including: budget constraints designed to limit the As of March 31, 2022, there were no
capabilities of TIGTA; and incidents of resistance or attempts to interfere with the independence
objection to oversight activities of TIGTA. of TIGTA or instances of restricted or
significantly delayed access to information.
Report restricted or significantly delayed access to
information, including the justification of the
establishment for such action.
Disputed Recommendations
As of March 31, 2022, there were no
Provide information on significant management decisions instances in which significant
in response to recommendations with which the Inspector recommendations were disputed.
General disagrees.
Revised Management Decisions
Provide a description and explanation of the reasons for As of March 31, 2022, there were no
any significant revised management decisions made significant revised management decisions.
during the reporting period.
Reports Issued in the Prior Reporting Period With No
Management Response
As of March 31, 2022, there were no prior
Provide a summary of each report issued before the reports for which management’s response
beginning of the current reporting period for which no was not received within 60 days of issuance.
management response was received within 60 days of
the report issuance date.
Disclosure
As of March 31, 2022, there were no reports
Provide detailed descriptions of the circumstances of that had been closed and were not disclosed
each inspection, evaluation, and audit that was closed by to the public.
the agency and was not disclosed to the public.
Review of Legislation and Regulations
TIGTA’s Office of Chief Counsel reviewed 124
Review existing and proposed legislation and regulations, proposed regulations and legislative requests
and make recommendations concerning the impact of during this reporting period.
such legislation or regulations.
45 Results listed are for this reporting period only.
60 │ October 1, 2021 – March 31, 2022
Appendix II
Audit Products (issued from October 1, 2021 through March 31, 2022)
Report
Report Title Outcome Measure(s)
Number
October 2021
The Taxpayer Advocate Service Assisted Thousands
of Taxpayers With CARES Act Issues but Faced Reliability of Information:
2022-16-002 225 cases impacted
Challenges in Identifying and Tracking Applicable
Cases
Fiscal Year 2020 Digital Accountability and Reliability of Information:
2022-10-003
Transparency Act Reporting Compliance 241 data elements impacted
November 2021
Employee Travel Card Misuse Is Being Identified
2022-10-004
Through Established Internal Reviews
Some Next Generation Information Technology
2022-20-001 Infrastructure Capabilities Were Implemented, but
Program Management Improvements Are Needed
December 2021
Annual Assessment of the IRS’s Information
2022-20-005
Technology Program for Fiscal Year 2021
Procedures to Address Employee Misconduct Were
2022-10-011 Followed, but Resolution Time and Quality Review
Need Improvement
Cybersecurity and Telework During the
2022-20-007
COVID‑19 Pandemic
Increased Availability of Tax Resources and
Information for Limited English Proficient and Visually
2022-40-008
Impaired Taxpayers Has Enhanced Assistance, but
Additional Improvements Are Needed
Vulnerability Scanning and Remediation Processes
2022-20-006 Protection of Resources:
Need Improvement
**** 46
January 2022
Oversight of the Low-Income Housing Tax Credit
2022-30-012
Program Can Be Improved
46 Information is redacted because TIGTA has determined that it is related to law enforcement
techniques/procedures and guidelines for law enforcement investigations or prosecutions.
October 1, 2021 – March 31, 2022 │ 61
Reliability of Information:
16,607 ITINs impacted
Taxpayer Rights and Entitlements:
$1,081,802 impacting 719 returns
Cost Savings (Funds Put to Better Use):
$5,634,868
Revenue Protection:
Administration of the Individual Taxpayer
2022-40-013 910 ITINs impacted
Identification Number Program
Taxpayer Burden:
2,118 ITINs impacted
Taxpayer Privacy and Security:
3,412 documents impacted
Revenue Protection:
$2,150,351 impacting
1,887 returns
Review of the Internal Revenue Service’s Purchase
2022-10-017 Card Violations Report and the Status of
Recommendations
Independent Attestation Review of the Internal
Revenue Service’s Fiscal Year 2021 Budget
2022-10-016
Formulation Compliance Report and Detailed
Accounting Report of Drug Control Funds
February 2022
Employee Plans Examination Quality Review Scores Reliability of Information:
2022-10-014 Have Declined, and Efforts to Identify Trends and 2,330 errors impacted
Implement Corrective Actions Could Be Improved
Network Segmentation Reduced Unnecessary Access
to Individual Master File Resources; However,
2022-20-010
Governance and Development Processes Were Not
Always Followed
More Interim Steps Could Be Taken to Mitigate
2022-20-009
Information Technology Supply Chain Risks
Plans to Close the Austin Tax Processing Center
Should Be Halted Until Hiring Challenges and
2022-40-015
Substantial Backlogs at Remaining Centers Are
Addressed
Reliability of Information:
Additional Actions Are Needed to Address Qualified 10,858 returns impacted
2022-40-018
Opportunity Zone Fund and Investor Noncompliance
Reliability of Information:
1,530 Forms 8996 impacted
62 │ October 1, 2021 – March 31, 2022
March 2022
Cost Savings (Funds Put to Better Use):
$4,934,811
Taxpayer Rights and Entitlements:
2022-40-024 Results of the 2021 Filing Season $28,884,481 impacting
21,465 taxpayers
Taxpayer Burden:
1,962 taxpayers impacted
American Rescue Plan Act: Assessment of Processes
2022-47-023 to Identify and Address Improper Child and
Dependent Care Credit Claims
Reliability of Information:
18 taxpayers impacted
The Administration of Partial Payment Installment Increased Revenue:
2022-30-021 $35,135,821 impacting
Agreements Needs Improvement
16,026 taxpayers
Taxpayer Burden:
1,007 taxpayers impacted
Inefficient Use of Resources:
3,401 Emergency Paid Leave Sick
Improvements Are Needed When Documenting and Leave requests impacted
2022-10-025
Monitoring Employee Leave
Reliability of Information:
3,155 Family Medical Leave Act
leave records impacted
Centralized Partnership Audit Regime Rules Have
Been Implemented; However, Initial No-Change Rates
2022-30-020
Are High and Measurable Goals Have Not Been
Established
Redesign Efforts for Most Taxpayer First Act Section
1302 Requirements Were Planned or Completed;
2022-15-031
However, Implementation Schedules and
Reorganization Plans Need to Be Finalized
Cost Savings (Funds Put to Better Use):
$25,763,453
The IRS Private Debt Collection Program Has Not
2022-30-022 Effectively Reported All Program Costs or Included Reliability of Information:
Adequate Disclosures $7,195,872 of underreported costs
Cost Savings (Questioned Costs):
$607,099
October 1, 2021 – March 31, 2022 │ 63
Taxpayer Burden:
1,513,584 Individual Master File
documents impacted
Program and Organizational Changes Are Needed to Reliability of Information:
2022-46-027 Address the Continued Inadequate Tax Account 114,276 overreported cases
Assistance Provided to Taxpayers impacted
Reliability of Information:
26,462 underreported cases
impacted
Cost Savings (Funds Put to Better Use):
$1,765,302,411
American Rescue Plan Act: Implementation of
2022-47-030
Advance Recovery Rebate Credit Payments Taxpayer Rights and Entitlements:
$1,541,084,368 impacting
620,576 individuals
The IRS Primarily Uses Lien Foreclosures When
Increased Revenue:
2022-30-026 Pursuing Principal Residences, Which Do Not Provide
**** 47
the Same Legal Protections as the Seizure Process
The Individual Tax Processing Engine Project’s
Estimation Methodology Aligns with Best Practices
2022-25-029
and the Project Addressed the Independent
Verification and Validation Recommendations
47 Taxpayer information is redacted from the underlying report because TIGTA has determined that it is tax return
information related to taxpayer privacy.
64 │ October 1, 2021 – March 31, 2022
Appendix III
TIGTA’s Statutory Reporting Requirements
The following table reflects the FY 2022 statutory reviews.
Reference to
Explanation of the Provision Comments/TIGTA Audit Status
Statutory Coverage
Requires TIGTA to evaluate the IRS’s
Enforcement Statistics compliance with restrictions under
Fieldwork currently in process.
I.R.C. § 7803(d)(1)(A) RRA 98 § 1204 on the use of enforcement
statistics to evaluate IRS employees.
Requires TIGTA to evaluate the IRS’s
Restrictions on Directly Contacting compliance with restrictions under
Taxpayers I.R.C. § 7521 on directly contacting taxpayers Fieldwork currently in process.
I.R.C. § 7803(d)(1)(A)(ii) who have indicated they prefer their
representatives be contacted.
Requires TIGTA to evaluate the IRS’s
Filing of a Notice of Lien compliance with required procedures under
Fieldwork currently in process.
I.R.C. § 7803(d)(1)(A)(iii) I.R.C. § 6320(a) upon the filing of a notice of
lien.
Requires TIGTA to include information
Extensions of the Statute of regarding extensions of the statute of
Limitations for Assessment of Tax limitations for assessment of tax under
I.R.C. § 6501 and the provision of notice to Fieldwork currently in process.
I.R.C. § 7803(d)(1)(C)
taxpayers regarding the right to refuse or limit
I.R.C. § 6501(c)(4)(B) the extension of particular issues or a
particular period of time.
Levies Requires TIGTA to evaluate the IRS’s
compliance with required procedures under Fieldwork currently in process.
I.R.C. § 7803(d)(1)(A)(iv) I.R.C. § 6330 regarding levies.
Requires TIGTA to evaluate the IRS’s
Collection Due Process compliance with required procedures under
I.R.C. §§ 6320 and 6330 regarding Fieldwork currently in process.
I.R.C. §§ 7803(d)(1)(A)(iii) and (iv) taxpayers’ rights to appeal lien or levy
actions.
Requires TIGTA to evaluate the IRS’s
Seizures compliance with required procedures under Fieldwork currently in process.
I.R.C. § 7803(d)(1)(A)(iv) I.R.C. §§ 6330 through 6344 when
conducting seizures.
Taxpayer Designations – Illegal Tax
Protester Designation and Similar An evaluation of the IRS’s compliance with
Designations restrictions under RRA 98 § 3707 on Fieldwork currently in process.
designation of taxpayers.
I.R.C. § 7803(d)(1)(A)(v)
October 1, 2021 – March 31, 2022 │ 65
Reference to
Explanation of the Provision Comments/TIGTA Audit Status
Statutory Coverage
Disclosure of Collection Activity With
Respect to Joint Returns Requires TIGTA to review and certify whether
the IRS is complying with I.R.C. § 6103(e)(8),
I.R.C. § 7803(d)(1)(B) (TIGTA which requires the IRS to disclose
Fieldwork currently in process.
requirement) information to an individual filing a joint
return on collection activity involving the other
I.R.C. § 6103(e)(8) (IRS individual filing the return.
requirement)
Requires TIGTA to include in each
Semiannual Report to Congress the number
Taxpayer Complaints of taxpayer complaints received and the Statistical results on the number
number of employee misconduct and of taxpayer complaints received
I.R.C. § 7803(d)(2)(A) taxpayer abuse allegations received by the are shown on page 40.
IRS or TIGTA from taxpayers, IRS employees,
and other sources.
Administrative or Civil Actions With Requires TIGTA to include information
Respect to the Tax Collection regarding any administrative or civil actions
Practices Act of 1996 with respect to violation of
I.R.C. § 7803(d)(1)(G) the fair debt collection provision of Fieldwork currently in process.
I.R.C. § 6304, including a summary of such
I.R.C. § 6304 actions and any resulting judgments or
RRA 98 § 3466 awards granted.
Requires TIGTA to include information
regarding improper denial of requests for
Denials of Requests for Information information from the IRS, based on a
statistically valid sample of the total number
I.R.C. § 7803(d)(1)(F) Fieldwork currently in process.
of determinations made by the IRS to deny
I.R.C. § 7803(d)(3)(A) written requests to disclose information to
taxpayers on the basis of I.R.C. § 6103 or
5 U.S.C. § 552(b)(7).
Information Technology Reviews:
Rep. No. 2022-20-001; Nov. 2021
Rep. No. 2022-20-005; Dec. 2021
Adequacy and Security of the Security Reviews:
Technology of the IRS Requires TIGTA to evaluate the IRS’s
Rep. No. 2022-20-005; Dec. 2021
adequacy and security of its technology.
I.R.C. § 7803(d)(1)(D) Rep. No. 2022-20-006; Dec. 2021
Rep. No. 2022-20-009; Feb. 2022
Rep. No. 2022-20-010; Feb. 2022
66 │ October 1, 2021 – March 31, 2022
Reference to
Explanation of the Provision Comments/TIGTA Audit Status
Statutory Coverage
Rep. No. 2022-10-017; Jan. 2022
TIGTA’s review of the IRS’s
Government Charge Card Abuse purchase card program found that
Prevention Act of 2012 Requires TIGTA to report on the IRS’s controls are generally effective,
progress in implementing purchase and and the number of purchase card
Pub. L. No. 112-194 travel card audit recommendations. violations identified by the IRS
(October 2012)
Credit Card Services Branch were
minimal and generally for nominal
amounts.
Improper Payments Elimination and Requires TIGTA to assess the IRS’s
Recovery Act of 2010 compliance with improper payment Fieldwork currently in process.
31 U.S.C. § 3321 requirements.
Rep. No. 2022-10-003; Oct. 2021
The IRS submitted its FY 2020
third quarter spending data by July
2020, as required, for publication
on USAspending.gov. In addition,
Digital Accountability and based on the standardized
Transparency Act of 2014 Requires TIGTA to assess the completeness, assessment methodology used
(DATA Act) timeliness, quality, and accuracy of data that across Offices of Inspectors
the IRS submits to comply with the DATA Act. General, the IRS earned an overall
Pub. L. No. 113-101, 128 Stat.
rating of “Excellent” for data
1124 (2014)
quality, the highest of four possible
ratings. However, TIGTA’s review
of a statistical sample of 77
transactions found some
individual data elements had high
error rates.
Office of National Drug Control Policy Rep. No. 2022-10-016; Jan. 2022
(ONDCP) Detailed Accounting
Submission and Assertions Requires TIGTA to authenticate the IRS’s TIGTA is not aware of any material
ONDCP detailed accounting submission modifications that should be made
National Drug Enforcement Policy and assertions. to the assertions in the IRS’s FY
21 U.S.C. § 1704(d) and the Office 2021 Budget Formulation
of National Drug Control Policy Compliance Report and Detailed
Circular entitled Drug Control Accounting Report in order for
Accounting, dated May 1, 2007. them to be in accordance with the
ONDCP Circular.
October 1, 2021 – March 31, 2022 │ 67
Reference to
Explanation of the Provision Comments/TIGTA Audit Status
Statutory Coverage
Rep. No. 2022-40-013; Jan. 2022
TIGTA continues to find that IRS
processes and procedures do not
ensure that ITINs are only issued
to individuals who have a Federal
income tax need. The IRS has
addressed 10 of the 13 agreed
recommendations from TIGTA’s
Protecting Americans From Tax prior report. However, additional
Hikes Act of 2015 Requires TIGTA to conduct an audit of the action is needed to address the
issuance of ITINs three remaining agreed
Pub. L. No. 114-113, 129 Stat.
recommendations. These include
2242 (2015).
improving processes to prevent
the duplicate use of entity
information (e.g., name, date of
birth, and country of birth) or
supporting documents to obtain an
ITIN and establishing processes to
identify and address retroactive
tax credit claims that are
processed incorrectly.
68 │ October 1, 2021 – March 31, 2022
Appendix IV
Inspector General Peer Review Activity
This appendix implements § 989C of the Dodd-Frank Wall Street Reform and Consumer
Protection Act. 48
For the period October 1, 2021 – March 31, 2022:
Peer Reviews Conducted of TIGTA by Another Office of Inspector General
During the reporting period, the Department of Energy Office of Inspector General completed
a peer review of TIGTA’s OA. This review was completed November 24, 2021, with a rating of
pass.
Outstanding Recommendations From Peer Reviews of TIGTA
There are no outstanding recommendations from peer reviews of TIGTA.
Peer Reviews Conducted by TIGTA
During this reporting period, there were no peer reviews conducted by OA.
During this reporting period, there were no peer reviews conducted by OI.
Outstanding Recommendations From Peer Reviews Conducted by TIGTA
There are no outstanding recommendations from peer reviews conducted by TIGTA.
48 Pub. L. 111-203, 124 Stat. 1376, 1945-46 (2010) (codified at 5 U.S.C. App. §5(a)(14)-(16)).
October 1, 2021 – March 31, 2022 │ 69
Appendix V
Data Tables Provided by the Internal Revenue Service
The memorandum copied below is the IRS’s transmittal to TIGTA. The tables that follow the
memorandum contain information that the IRS provided to TIGTA and consist of IRS employee
misconduct reports from the IRS Automated Labor and Employee Relations Tracking System
(ALERTS) for the period October 1, 2021 through March 31, 2022. Also, data concerning
substantiated RRA 98 § 1203 allegations for the same period are included. See Appendix VI
for § 1203 Standards. IRS management conducted inquiries into the cases reflected in these
tables.
Internal Revenue Service Memorandum
The Following Tables Are Provided by the IRS:
70 │ October 1, 2021 – March 31, 2022
Report of Employee Misconduct by Disposition Groups
Employee Employee Tax TIGTA Report
Administrative
Disposition Character Compliance of Totals
Case
Investigation Case Investigation
REMOVAL (PROBATION PERIOD COMPLETE) 48 0 6 21 75
REMOVAL AT OPM DIRECTION 0 6 0 0 6
PROBATION/SEPARATION 200 6 0 5 211
SEPARATION OF TEMPORARY EMPLOYEE 0 0 0 0 0
RESIGNATION, RETIREMENT, ETC.
(REASON NOTED ON STANDARD FORM 35 0 12 8 55
(SF)50)
RESIGNATION, RETIREMENT, ETC. (REASON
80 12 24 27 143
NOT NOTED ON SF50)
SUSPENSION, 14 DAYS OR LESS 68 0 41 35 144
SUSPENSION, MORE THAN 14 DAYS 15 0 6 22 43
INDEFINITE SUSPENSION 0 0 0 0 0
REPRIMAND 85 13 32 27 157
ADMONISHMENT 107 11 81 23 222
WRITTEN COUNSELING 78 31 105 19 233
ORAL COUNSELING 9 0 4 0 13
ALTERNATIVE DISCIPLINE: IN LIEU OF
7 0 5 0 12
REPRIMAND
ALTERNATIVE DISCIPLINE: IN LIEU OF
7 0 4 0 11
SUSPENSION
CLEARANCE LETTER 47 0 14 15 76
CLOSED WITHOUT ACTION CAUTIONARY
92 159 62 54 367
LETTER
CLOSED WITHOUT ACTION LETTER 48 18 15 23 104
TERMINATION FOR ABANDONMENT OF
8 0 0 0 8
POSITION
CASE SUSPENDED PENDING EMPLOYEE 0 0 0 0 0
RETURN TO DUTY
PROSECUTION PENDING FOR TIGTA’S
0 0 0 0 0
REPORT OF INVESTIGATION
CLOSED - SUPPLEMENTAL REQUESTED 0 0 0 0 0
FORWARDED TO TIGTA 21 0 0 0 21
TOTAL 955 256 411 279 1,901
Source: ALERTS (extract date: April 1, 2022). Columns containing numbers of two or less and protected by
I.R.C. § 6103 are notated with a zero and are not reflected in the column and row totals.
October 1, 2021 – March 31, 2022 │ 71
Report of Employee Misconduct National Summary
Cases Closed
Inventory Case Open Conduct Cases Non- Ending
Conduct
Type Inventory Cases Merged With Conduct Inventory
Issues
Received Other Cases Issues
Administrative
416 2,130 1,328 18 58 1,142
Case
Employee
Character 141 267 303 10 0 95
Investigation
Employee Tax
591 398 465 21 0 503
Compliance Case
TIGTA Report of
361 389 333 4 0 413
Investigation
Total 1,509 3,184 2,429 53 58 2,153
Source: ALERTS (extract date: April 1, 2022).
Administrative Case - Any matter involving an employee in which management conducted an
inquiry into alleged misconduct.
Employee Character Investigations - Any matter involving a New Background Investigation
Case investigation into an employee’s background that is referred to management for
appropriate action.
Employee Tax Compliance Case - Any conduct matter that is identified by the Employee Tax
Compliance program which becomes a matter of official interest.
TIGTA Investigation - Any matter involving an employee in which TIGTA conducted an
investigation into alleged misconduct and referred a Report of Investigation to the IRS
for appropriate action.
72 │ October 1, 2021 – March 31, 2022
Summary of Substantiated I.R.C. Section 1203
Inquiries Recorded in ALERTS
Removed In
Resigned/ Probation Penalty
§ 1203 Violation Removals On Other Personnel Total
Retired Separation Mitigated
Grounds Process
1203(b)(2): FALSE
0 0 0 0 0 0 0
STATEMENT UNDER OATH
1203(b)(3): CIVIL
RIGHTS/CONSTRUCTIVE 0 0 0 0 0 0 0
VIOLATION
1203(b)(4): CONCEALED
0 0 0 0 0 0 0
WORK ERROR
1203(b)(6):
I.R.C./IRM/REG 0 0 0 0 0 0 0
VIOLATION-RETALIATION
1203(b)(8): WILLFUL
4 0 0 0 11 107 122
UNTIMELY RETURN
1203(b)(9): WILLFUL
7 0 0 0 5 74 86
UNDERSTATED TAX
1203(b)(10): THREAT OF
0
AUDIT FOR PERSONAL 0 0 0 0 0 0
GAIN
Total 11 0 0 0 16 181 208
Source: ALERTS (extract date: April 1, 2022). Columns containing numbers of two or less and protected by
I.R.C. § 6103 are annotated with a zero and are not reflected in the column and row totals.
The cases reported as Removals and Penalty Mitigated do not reflect the results of any third-
party appeal.
October 1, 2021 – March 31, 2022 │ 73
Appendix VI
Section 1203 Standards
In general, the IRS Commissioner shall terminate any IRS employee if there is a final
administrative or judicial determination that, in the performance of official duties, such
employee committed any misconduct violations outlined below. Such termination shall be a
removal for cause on charges of misconduct.
Misconduct violations include:
• Willfully failing to obtain the required approval signatures on documents authorizing the
seizure of a taxpayer’s home, personal belongings, or business assets;
• Providing a false statement under oath with respect to a material matter involving a
taxpayer or taxpayer representative;
• Violating, with respect to a taxpayer, taxpayer representative, or other employee of the
IRS, any right under the Constitution of the United States, or any civil right established
under Title VI or VII of the Civil Rights Act of 1964; Title IX of the Education Amendments
of 1972; Age Discrimination in Employment Act of 1967; Age Discrimination Act of 1975;
Section 501 or 504 of the Rehabilitation Act of 1973; or Title I of the Americans With
Disabilities Act of 1990;
• Falsifying or destroying documents to conceal mistakes made by any employee with
respect to a matter involving a taxpayer or taxpayer representative;
• Committing assault or battery on a taxpayer, taxpayer representative, or another
employee of the IRS, but only if there is a criminal conviction or a final judgment by a
court in a civil case with respect to the assault or battery;
• Violating the I.R.C., the Treasury Department’s regulations, or the policies of the IRS
(including the IRM) for the purpose of retaliating against or harassing a taxpayer,
taxpayer representative, or other employee of the IRS;
• Willfully misusing provisions of I.R.C. § 6103 for the purpose of concealing information
from a congressional inquiry;
• Willfully failing to file any return of tax required under the I.R.C. on or before the date
prescribed therefore (including any extensions), unless such failure is due to reasonable
cause and not to willful neglect;
• Willfully understating Federal tax liability, unless such understatement is due to
reasonable cause and not to willful neglect; and
• Threatening to audit a taxpayer for the purpose of extracting personal gain or benefit.
The IRS Commissioner may mitigate the penalty of removal for the misconduct violations
outlined above. The exercise of this authority shall be at the sole discretion of the
Commissioner and may not be delegated to any other officer. The Commissioner may
establish a procedure that will be used to decide whether an individual should be referred to
the Commissioner for determination. Any mitigation determination by the Commissioner in
these matters may not be appealed in any administrative or judicial proceeding.
74 │ October 1, 2021 – March 31, 2022
Glossary of Acronyms
ALERTS Automated Labor and Employee Relations Tracking System
AWOL Absence Without Leave
CARES Act Coronavirus Aid, Relief, and Economic Security Act
CDP Collection Due Process
COVID-19 Coronavirus Disease 2019
DARE Data at Rest Encryption
ECM Enterprise Case Management
EIP Economic Impact Payment
EP Employee Plans
FFI Foreign Financial Institutions
FMLA Family Medical Leave Act of 1993
FY Fiscal Year
I.R.C. Internal Revenue Code
IRM Internal Revenue Manual
IRS Internal Revenue Service
ITIN Individual Taxpayer Identification Number
IVES Income Verification Express Service
OA Office of Audit
OI Office of Investigations
O&E Outreach and Education
PII Personally Identifiable Information
POA Power of Attorney
PPP Paycheck Protection Program
October 1, 2021 – March 31, 2022 │ 75
RRA 98 Restructuring and Reform Act of 1998
RRC Recovery Rebate Credit
SCRM Supply Chain Risk Management
SSA Social Security Administration
SSDI Social Security Disability Insurance
TAS Taxpayer Advocate Service
TIN Taxpayer Identification Number
TIGTA Treasury Inspector General for Tax Administration
TY Tax Year
U.S. United States
U.S.C. United States Code
76 │ October 1, 2021 – March 31, 2022
Call our toll-free hotline
to report waste, fraud or abuse:
1-800-366-4484
By Web:
www.tigta.gov
By Fax:
202-927-7002
Or Write:
Treasury Inspector General for Tax Administration
P.O. Box 589
Ben Franklin Station
Washington, DC 20044-0589
Information you provide is confidential and you may remain anonymous.
October 1, 2021 – March 31, 2022 │ 77
Department of the Treasury
Office of the Inspector General for Tax Administration
901 D Street, SW., Suite 600
Washington, DC 20024
This report and complete copies of TIGTA audit reports
are available online at: www.tigta.gov
78 │ October 1, 2021 – March 31, 2022
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