TIGTA Semiannual Report to Congress, October 1, 2022 through March 31, 2023
Summary
The Semiannual Report to Congress of the Treasury Inspector General for Tax Administration (TIGTA) for October 1, 2022 – March 31, 2023, opening with a message from Inspector General J. Russell George. The message states that the Inflation Reduction Act, signed into law on August 16, 2022, provides the IRS with nearly $80 billion in supplemental funding through September 30, 2031, and TIGTA with $403 million. For the period, the Office of Audit completed 19 audits, the Office of Inspections and Evaluations three evaluations and the Office of Investigations 1,053 investigations, with monetary benefits totaling more than $68.4 million. A new section reports on Inflation Reduction Act oversight, including Report Number 2023-IE-R003. Investigative areas listed include pandemic relief fraud and impersonation of IRS employees.
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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.
October 1, 2022 – March 31, 2023│ 2
Inspector General’s Message to Congress
Signed into law on August 16, 2022, the Inflation
Reduction Act (IRA) provides the Internal Revenue
Service (IRS) with nearly $80 billion in supplemental
funding through September 30, 2031. During the
same nine-year period, the IRA provides the Treasury
Inspector General for Tax Administration (TIGTA) with
$403 million in supplemental funding. TIGTA will use
these funds for enhanced oversight of the IRS’s
taxpayer services, enforcement, operations support,
business systems modernization, and reporting
requirements.
TIGTA is committed to ensuring that all IRA funding is
used effectively and efficiently to benefit Federal tax
administration and taxpayers. In this Semiannual
Report to Congress, we introduce a new section that
reports on our IRA oversight efforts for the period
October 1, 2022, through March 31, 2023. As we move forward, we plan to share our
ongoing IRA oversight efforts in subsequent semiannual reporting to Congress.
Highlights From This Reporting Period
For this reporting period, TIGTA’s Office of Audit completed 19 audits, the Office of
Inspections and Evaluations completed three evaluations, and the Office of Investigations
completed 1,053 investigations. TIGTA’s combined audit and investigative efforts, resulted
in the recovery, protection, and identification of monetary benefits totaling more than
$68.4 million.
Highlights from our audit and evaluation work include a report on the backlogs of IRS tax
returns and other account work, in addition to a report on the IRS not adequately pursuing
Federal civilian employees who do not file their taxes. We also issued a report on the IRS
needing more information before making decisions on Form 1023-EZ streamlined
applications for tax-exempt status. Further, we highlight our first evaluation of the IRS’s
efforts to implement IRA legislation, as well as an evaluation of the process for selecting tax
returns for National Research Program audits.
Our Office of Investigations continues its work pursuing allegations of wrongdoing in many
areas of Federal tax administration including, but not limited to: unauthorized access to and
disclosure of Federal tax information; threats and violence against IRS employees and
facilities; pandemic relief fraud; and the impersonation of IRS employees. TIGTA’s team of
investigators work with the IRS to detect and prevent scams, provide resources to traditional
investigative areas, and combat ever-increasing cyberthreats to the IRS network and online
applications.
October 1, 2022 – March 31, 2023│ 3
TIGTA also works with law enforcement partners to ensure that those who endeavor to
corrupt Federal tax administration are prosecuted to the fullest extent of the law. A few of
TIGTA’s investigative cases highlighted for this reporting period include an IRS worker
pleading guilty to selling morphine and contributing to a co-worker’s death; a Mexican
national impersonating an IRS employee; a tax preparer committing multiple fraud schemes
and filing false tax returns; and a New Jersey attorney indicted for stealing from his clients.
We look forward to working with Congress, the Administration, the new IRS Commissioner,
and other stakeholders to ensure that our Nation’s system of tax administration is efficient,
effective, and fair for all taxpayers.
Sincerely,
J. Russell George
Inspector General
October 1, 2022 – March 31, 2023│ 4
Table of Contents
Inspector General’s Message to Congress ........................................................................................... 3
TIGTA’s Profile ........................................................................................................................................ 7
Statutory Mandate ....................................................................................................................... 7
Organizational Structure ............................................................................................................. 8
Authorities .................................................................................................................................... 8
Inflation Reduction Act Oversight Efforts.............................................................................................. 9
Promote the Economy, Efficiency, and Effectiveness of Tax Administration ..................................... 11
Improving Taxpayer Service ....................................................................................................... 12
Protecting Taxpayer Data and IRS Resources .......................................................................... 13
Administering Tax Law Changes ................................................................................................ 14
Increasing Domestic and International Tax Compliance and Enforcement ........................... 15
Protect the Integrity of Tax Administration ........................................................................................... 20
The Performance Model .............................................................................................................. 20
Performance Area: Employee Integrity ....................................................................................... 20
Performance Area: Employee and Infrastructure Security........................................................ 22
Performance Area: External Attempts to Corrupt Tax Administration ...................................... 24
Advance Oversight of America’s Tax System........................................................................................ 27
Investigations Statistical Reports ......................................................................................................... 29
Significant Investigative Achievements...................................................................................... 29
Summary of Investigative Reports and Criminal Referrals ....................................................... 31
Interference ................................................................................................................................. 31
Instances of Whistleblower Retaliation ...................................................................................... 31
Closed Investigations Involving IRS Senior Government Employees ....................................... 32
Audit Statistical Reports ........................................................................................................................ 33
Audit Reports With Unimplemented Corrective Actions ............................................................ 33
Inspections and Evaluations Statistical Reports.................................................................................. 46
Evaluation Reports With Unimplemented Corrective Actions ................................................... 46
Appendices
Appendix I – Other Reports ................................................................................................................... 47
Appendix II – Audit Products ................................................................................................................. 48
Appendix III – Inspections and Evaluations Products .......................................................................... 50
Appendix IV – TIGTA’s Statutory Reporting Requirements .................................................................. 51
Appendix V – Inspector General Peer Review Activity ......................................................................... 55
October 1, 2022 – March 31, 2023│ 5
Appendix VI – Data Tables Provided by the Internal Revenue Service............................................... 56
Internal Revenue Service Memorandum ................................................................................... 56
Report of Employee Misconduct by Disposition Groups ........................................................... 57
Report of Employee Misconduct National Summary................................................................. 58
Summary of Substantiated I.R.C. Section 1203 Inquiries Recorded in ALERTS ..................... 59
Appendix VII – Section 1203 Standards .............................................................................................. 60
Glossary of Acronyms............................................................................................................................. 61
October 1, 2022 – March 31, 2023│ 6
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.
Statutory Mandate
Protect against IRS employee improprieties and external attempts to corrupt
or threaten IRS employees.
Provide policy direction and conduct, supervise, and coordinate audits and
investigations related to IRS programs and operations.
Review existing and proposed legislation and regulations related to IRS
programs and operations, and make recommendations concerning the impact
of such legislation or regulations.
Promote economy and efficiency in the administration of tax laws.
Prevent and detect waste, fraud, and abuse in IRS programs and operations.
Inform the Secretary of the Treasury and Congress of problems and
deficiencies identified and of the progress made in resolving them.
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, 2022 – March 31, 2023│ 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.). § 401, et seq.
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.).
October 1, 2022 – March 31, 2023│ 8
Inflation Reduction Act Oversight Efforts
On August 16, 2022, the President signed the Inflation Reduction Act of 2022 (IRA)3 into
law. The legislation authorizes almost $80 billion through September 30, 2031, to the IRS
to improve taxpayer services, update antiquated computer systems, and increase
compliance and enforcement actions against high-income taxpayers and large corporations
that try to evade taxes. The law intended this new spending to supplement, not replace, the
IRS’s normal annual appropriations.
In addition, the legislation marks one of the largest investments in clean energy in United
States history. The legislation provides numerous investments in climate protection,
including tax credits for households to offset energy costs, investments in clean energy
production, and tax credits aimed at reducing carbon emissions. To help offset expenses
and generate revenue for clean energy investments, the IRA also imposes a minimum
corporate tax of 15 percent and a 1 percent surcharge on corporate stock buybacks. These
provisions have had, and will continue to have, a significant impact on IRS operations and
Federal tax administration.
TIGTA’s Role Overseeing IRA Funds
TIGTA will receive $403 million in supplemental funding through September 30, 2031.
TIGTA will use the IRA funds to provide oversight of the IRS and for support of TIGTA’s
operations.
The following summary provides highlights from the first in a series of TIGTA reviews
examining the IRS and IRA funding. The report presented the results of TIGTA’s evaluation
assessing the IRS’s standup of the IRA Transformation and Implementation Office, as well
as its development processes and procedures to monitor, measure, and track
implementation efforts.
Inflation Reduction Act: Assessment of the Internal Revenue Service Implementation
Efforts (Report Number 2023-IE-R003)
Enactment of the IRA legislation authorized almost $80 billion to the IRS through September
30, 2031. Figure 1 highlights how the IRA funding will supplement the IRS’s prior estimated
budget projections.
For example, the IRS created the IRA Transformation and Implementation Program Office
(Program Office), which is responsible for strategically coordinating agencywide activities to
develop the Operational Plan required by the Secretary of the Treasury (Treasury Secretary).
The Program Office is also responsible for engaging with IRS personnel and Treasury
Department stakeholders, monitoring the implementation of IRA tax provisions, and
3 Pub. L. No. 117-169, 136 Stat. 1818.
October 1, 2022 – March 31, 2023│ 9
coordinating the
organizational Figure 1: The IRS’s Budget Authority Through FY 2031
transformation efforts the Under the IRA
IRS plans to undertake
over the next decade.
In addition, the Treasury
Secretary outlined
expectations for the IRS for
the 2023 Filing Season in
an effort to ensure that
taxpayers will see real
changes. The filing season
improvements included:
• Staffing each of the
IRS’s Taxpayer
Assistance Centers.
• Improving the level
of telephone service
Source: Congressional Research Service report, IRS-Related Funding in
from approximately
the Inflation Reduction Act, updated October 20, 2022. Note: The
15 percent to 85 “prior projections” are for FY 2022 through FY 2031 and assumes
percent and there is no change in base appropriations.
reducing average
wait time from nearly 30 minutes to 15 minutes.
• Automating the scanning of millions of individual paper tax returns.
• Providing taxpayers the ability to receive and respond to notices online.
TIGTA found that actions are being taken in an effort to meet these expectations.
The Treasury Secretary also required the IRS to produce an Operational Plan by February 17,
2023. The plan had to include details on how resources will be spent over the next decade
on technology, service improvement, and personnel. This plan is key to ensuring that the
public and Congress are able to hold the IRS accountable as it pursues needed
improvements. To that end, the plan had to include metrics for areas of focus and time
frames over the course of the coming years that the agency will strive to achieve.
This report was prepared to provide information only. No recommendations were made in
the report.
October 1, 2022 – March 31, 2023│ 10
Promote the Economy, Efficiency, and
Effectiveness of Tax Administration
TIGTA’s Office of Audit 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 Office of Audit places audit emphasis on statutory coverage required by
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 2022 Through March 2023
Improving Taxpayer Service
Protecting Taxpayer Data and IRS Resources
Administering Tax Law Changes
Increasing Domestic and International Tax Compliance and Enforcement
The following summaries highlight significant audits completed in each area of emphasis
during this six-month reporting period:
October 1, 2022 – March 31, 2023│ 11
Improving Taxpayer Service
Backlogs of Tax Returns and Other Account Work Will Continue Into the 2023 Filing
Season (Report Number 2023-46-007)
This audit was part of a series of reviews of the IRS’s efforts to reduce significant backlogs
at its Tax Processing Centers. Backlogs of tax returns and other types of tax account work
from the 2021 Filing Season continued to affect the IRS’s ability to provide timely service to
taxpayers in the 2022 Filing Season. As of the week ending October 28, 2022, there were
9.6 million returns awaiting processing or other resolution compared to 10.8 million returns
for the week ending October 30, 2021.
TIGTA reported that during the 2022 Filing Season, the IRS took several steps to address
staffing needs at the Tax Processing Centers and Accounts Management function, as noted
in Figure 2.
Figure 2: Analysis of the IRS’s Approach to Staffing Shortages
and Backlogs
Source: TIGTA analysis of the IRS approach used to address staffing shortages
and the backlog of work at the Tax Processing Centers.
These efforts have recently resulted in increased productivity levels (i.e., the number of
returns processed); however, our assessment of remaining inventory indicates that the IRS
will not meet all of its goals by the end of Calendar Year (CY) 2022. As a result, the IRS will
continue to have a backlog into the 2023 Filing Season.
TIGTA will continue to assess the IRS’s efforts to address the backlog of tax returns and
other tax account work and issue additional reports in CY 2023. This report provided interim
information only. No recommendations were made.
October 1, 2022 – March 31, 2023│ 12
Protecting Taxpayer Data and IRS Resources
The Enterprise Case Management System Did Not Consistently Meet Cloud Security
Requirements (Report Number 2023-20-018)
The Enterprise Case Management (ECM) Figure 3: Summary of ECM System POA&M
system is designed to modernize and
consolidate legacy case management
systems across the IRS. The ECM
system processes and stores sensitive
information within the IRS, providing
restricted access to IRS employees via
the internet.
Control weaknesses within the ECM
system can pose a substantial risk to
taxpayer records currently residing in
the system. The potential harm
includes breach, unauthorized access,
and disclosure of taxpayer information.
TIGTA found that the IRS followed the
agency cloud authorization to operate
Source: TIGTA’s analysis of the IRS’s POA&M documentation.
process for the ECM system. However,
the IRS did not meet agency guidelines for the timely creation and documentation of Plans
of Action and Milestones (POA&M) to address nine security risks identified in the February
2021 Cloud Security Assessment Report. While the IRS created nine POA&Ms, only three
(33 percent) were timely prepared and only two (22 percent) met documentation
requirements. The IRS took corrective action during the audit to address this finding.
The IRS also tested 42 security controls in June 2022 and identified five risks previously
reported in February 2021. TIGTA reviewed the risks and found that actions were taken to
address or track the risks, including acceptance, remediation, and creating new POA&Ms. In
addition, ECM system production servers residing in the cloud lacked required malicious
code protection. During our audit work, the IRS initiated a pilot test of an application to
provide malicious code protection for the servers.
The IRS agreed with all four TIGTA recommendations. The IRS plans to update the Internal
Revenue Manual; complete development, testing, and implementation of an automated
malicious code protection application for Linux servers; and monitor privileged user activity
logs and regularly disable inactive privileged accounts.
October 1, 2022 – March 31, 2023│ 13
Administering Tax Law Changes
Results of the 2022 Filing Season (Report Number 2023-40-021)
This report reviewed whether the IRS timely and accurately processed individual paper and
electronically filed tax returns during the 2022 Filing Season. The IRS began processing Tax
Year (TY) 2021 individual tax returns on January 24, 2022. As of May 6, 2022, the IRS had
received 143.2 million individual income tax returns (94.7 percent electronically filed) and
issued nearly 94.4 million refunds totaling approximately $285.6 billion.
TIGTA found that during the 2022 Filing Season, the IRS took a number of actions to reduce
the backlogs of unprocessed tax returns and other tax account work. These included hiring
9,000 new employees and using more than 2,400 employees from other IRS functional
areas. However, as of September 30, 2022, the IRS still had 4.1 million unprocessed TY
2021 paper tax returns.
We also noted that more can be done to prevent the allowance of erroneous alimony
deduction claims. While taxpayers are no longer allowed to deduct alimony paid as part of a
divorce or separation agreement executed after December 31, 2018, the IRS’s processes
do not prevent taxpayers from receiving the deduction. Taxpayers were allowed potentially
erroneous alimony deductions totaling $68.4 million. TIGTA estimates these taxpayers
reduced their tax liability by $9.8 million as a result of these deductions.
The IRS continues to experience
increased demand for toll-free
telephone assistance in response to
the processing backlogs, including
the toll-free Taxpayer Assistance
Center (TAC) appointment line. TIGTA
tested the IRS’s ability to answer the
TAC appointment line by attempting
to call the appointment line 15 times.
We were unable to speak with an
assistor to schedule an appointment
on 12 of the 15 call attempts. We
found that taxpayers are not being
transferred into the waiting queue
but being disconnected.
TIGTA made seven recommendations: five related to the processing of alimony claims; and
two related to improving customer service at TACs. The IRS agreed with two of TIGTA’s
alimony recommendations but neither of the TAC recommendations.
October 1, 2022 – March 31, 2023│ 14
Increasing Domestic and International Tax Compliance and Enforcement
The IRS Has Not Adequately Prioritized Federal Civilian Employee Nonfilers
(Report Number 2023-30-011)
Like all taxpayers, Federal employees and retirees have a legal obligation to file tax returns
and pay their taxes. However, Federal employees are held to a higher standard for a
number of reasons, including that they draw their compensation and funds from Federal
taxes.
As the agency primarily responsible for administering Federal tax law, the IRS must ensure
that Federal employees comply with the tax law in order to maintain the public’s confidence.
In 1993, the IRS established the Federal Employee/Retiree Delinquency Initiative (FERDI)
program to promote Federal tax compliance among current and retired Federal civilian and
military employees.
The number of delinquent Federal civilian employees has increased by 32 percent from
Fiscal Years (FYs) 2015 to 2021 (see Figure 4). In FY 2021, 149,000 Federal civilian
employees owed $1.5 billion in unpaid taxes.
Figure 4: Federal Civilian Delinquency Rates - FYs 2015 Through 2021 4
Source: TIGTA’s analysis of the IRS’s FYs 2016 through 2021 FERDI Annual Reports.
TIGTA’s analysis of FYs 2016 through 2020 FERDI data found that over 42,000 Federal
civilian employees repeatedly failed to file a tax return for multiple years. While the IRS can
identify and discipline its own tax delinquent employees, it cannot share with other Federal
agencies their employees’ return information because I.R.C. § 6103 generally protects the
disclosure of taxpayer information.
4 In August 2022, the IRS provided TIGTA the final FY 2021 FERDI Annual Report.
October 1, 2022 – March 31, 2023│ 15
The time the IRS dedicates to Federal employee nonfilers is minimal. In October 2021,
during the course of TIGTA’s review, IRS management started to dedicate one day per
quarter for employees to work standalone FERDI nonfiler cases (an expansion from
whenever collection representatives were available). Inadequate resources, challenges
related to the pandemic, and management priorities led to backlogs and reduced workdays
of FERDI nonfiler cases.
TIGTA made 11 recommendations to help the IRS address Federal nonfiler cases more
efficiently and effectively. The IRS agreed with and provided planned corrective actions for
10 of the recommendations.
More Information Is Needed to Make Informed Decisions on Streamlined Applications
for Tax Exemption (Report Number 2023-10-001)
On July 1, 2014, the IRS released Figure 5: Example of IRS Letter Granting Tax-
Form 1023-EZ, Streamlined Exempt Status to a Fictitious TIGTA-Created Entity
Application for Recognition of
Exemption Under Section 501(c)(3) of
the Internal Revenue Code. The form
is a simplified electronic application
for smaller organizations to request
and obtain exemption from Federal
income tax as an organization
described in I.R.C. § 501(c)(3)
tax-exempt status.
Form 1023-EZ requires applicants to
attest, rather than demonstrate, that
they meet the requirements for I.R.C.
§ 501(c)(3) status. For example, Form
1023-EZ applicants are not required
to submit their organizing documents
to the IRS; they instead attest that
they meet organizational
requirements.
The majority of organizations seeking
I.R.C. § 501(c)(3) tax-exempt status
apply using the Form 1023-EZ
application. In FY 2021, the IRS
closed over 90,000 applications for Source: IRS approval letter that TIGTA received after
I.R.C. § 501(c)(3) tax-exempt status applying for tax-exempt status using a fictitious entity.
and 75 percent of them were Form
1023-EZ applications.
October 1, 2022 – March 31, 2023│ 16
TIGTA determined that the information provided on the Form 1023-EZ is insufficient to make
an informed determination about tax-exempt status and does not educate applicants about
eligibility requirements for tax exemption. As a result, TIGTA was able to apply for and obtain
I.R.C. § 501(c)(3) status for four of five nonexistent organizations (see Figure 5 example).
The IRS correctly identified one of TIGTA’s fictitious applications as potentially ineligible and
sent a request for additional documentation. TIGTA’s undercover testing illustrates
vulnerabilities in the IRS’s tax-exempt status determination process.
The IRS relies on a Form 1023-EZ examination strategy to detect noncompliance after
organizations are approved; however, less than 1 percent of tax-exempt organizations are
examined each year. In addition, online guidance for the Form 1023-EZ is inaccurate. The
online web page used to apply for tax-exempt status includes educational links to assist
Form 1023-EZ applicants. However, one of the educational links takes the applicant to a
web page containing inaccurate information for applicants using the Form 1023-EZ.
IRS management agreed with two of TIGTA’s four recommendations and will consider a third
recommendation.
Actions Are Needed to Improve the Completeness, Development, and Review of IRS Tax
Gap Estimates (Report Number 2023-10-016)
The Tax Gap provides an estimate of overall Figure 6:
taxpayer noncompliance with Federal tax
laws that occurred during a specified time
period. In 2021, the Biden Administration
and members of Congress expressed
concerns about the size of the Tax Gap,
suggesting revenue raised from narrowing
the Tax Gap could help pay for various policy
proposals. The topic also has been a matter
of recent concern among members of
Congress who held hearings to discuss the
comprehensiveness and timeliness of the
calculations used to produce the Tax Gap
estimates. Interest in the Tax Gap
demonstrates that these estimates can
influence decisions about tax policy and
have a significant effect on tax
administration.
Source: TIGTA analysis of the IRS’s Tax Gap data.
TIGTA found that the IRS’s Office of
Research, Applied Analytics and Statistics
(RAAS) has not developed estimates for certain aspects of the Tax Gap. Some sources of
noncompliance may not be reflected in the Tax Gap estimates (see Figure 6). In addition,
although the Tax Gap report identifies certain known limitations, it does not identify what
actions, if any, are being taken to address other excluded areas of noncompliance, such as
those associated with foreign activities and digital assets.
October 1, 2022 – March 31, 2023│ 17
TIGTA also found that RAAS does not have documented policies or procedures for producing
the Tax Gap estimates. We similarly noted that RAAS does not have written policies,
procedures, or guidance to: 1) specify the frequency of issuing Tax Gap estimates; or 2) help
RAAS analysts meet internal milestones for developing the Tax Gap estimates. In addition,
TIGTA found that RAAS does not have formalized processes for internal or external review of
its Tax Gap estimates. Internal reviews are performed at various points; however, these
reviews are not documented and do not allow for any oversight.
IRS officials agreed with five of TIGTA’s six recommendations and partially agreed with one.
IRS management did not agree to develop consolidated, written policies and procedures but
did agree to load the procedural documents and the code for running the Tax Gap
estimation into a single project folder.
Opportunities Exist for the IRS to Develop a More Coordinated Approach to Examination
Workplan Development and Resource Allocation (Report Number 2023-30-008)
This report reviewed the process
the IRS uses to allocate resources
to the Examination functions. The
IRS has four different business
operating divisions that perform
examination work: 1) Wage and
Investment; 2) Small Business/Self-
Employed; 3) Large Business and
International; and 4) Tax Exempt
and Government Entities. Each
division covers different segments
of taxpayers and performs various
types of examinations.
TIGTA found that the IRS does not have a multiyear Examination Strategic Plan for allocating
resources. The IRS has a general five-year strategic plan with broad goals for the agency;
however, the strategic plan does not contain the detail needed for the different Examination
functions to most effectively allocate resources.
TIGTA also reported that the IRS does not have a coordinated approach for developing an
annual enterprise-wide Examination workplan that considers the various strategic and
operational risks of all the Examination functions. Examination management from the four
business operating divisions independently develop their annual workplans to determine
how to allocate resources in their own work areas. TIGTA noted that the IRS would benefit
from having an annual enterprise-wide Examination workplan, which would help to ensure a
consistent, strategic approach and transparency for allocating resources in the Examination
areas with the most significant needs.
October 1, 2022 – March 31, 2023│ 18
In addition, we found the IRS does not use Tax Gap estimates to determine where
Examination should allocate resources in its work planning. IRS management informed
TIGTA that ongoing research on complex areas of noncompliance and planned future
changes to the Tax Gap methodology should make the Tax Gap more useful for informing
resource allocation decisions through enterprise examination planning.
TIGTA made four recommendations, and IRS management agreed with all four of the
recommendations.
October 1, 2022 – March 31, 2023│ 19
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 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 allegations of violations in these areas, and refers the findings to the U.S.
Department of Justice or to State authorities for prosecution. We also refer allegations of
violations involving IRS employee misconduct to IRS management.
Performance Area: Employee Integrity
In order for the country’s tax system to operate
successfully, taxpayers must have confidence in the fair
38%
of OI’s work
and impartial administration of Federal tax laws and
was employee
regulations. IRS employee misconduct can erode the
integrity
public’s trust and impede the IRS’s ability to effectively
investigations
enforce tax laws. Employee misconduct can take many
forms, such as: the misuse of IRS resources or authority;
October 1, 2022 – March 31, 2023│ 20
theft; fraud; extortion; taxpayer abuse; unauthorized access to, and disclosure of, tax returns
and return information; and identity theft.
During this reporting period, employee integrity investigations accounted for 38 percent of
OI’s work. OI conducted 262 employee misconduct investigations that were referred to the
IRS for action. The IRS took action on 243 and closed 19 investigations without action. 5
As part of its employee integrity focus, TIGTA also conducts proactive investigative initiatives
to detect misconduct in the administration of IRS programs. During this reporting period,
TIGTA initiated 15 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.
Addressing Employee Misconduct
The following cases represent OI’s efforts to address employee misconduct during this
six-month reporting period: 6
Former IRS Employee Pleads Guilty to Selling Morphine and Contributing to Co-worker’s
Death
On February 21, 2023, in the Eastern District of California, Margarita Aispuro-Camacho
pleaded guilty to illegally selling morphine and contributing to the death of her co-worker at
the IRS. Aispuro-Camacho was a clerk at the IRS. In May 2020, she sold her own
prescribed morphine pills to one of her co-workers. The next day, the co-worker died from
an overdose of the morphine provided by Aispuro-Camacho, and other prescription drugs the
co-worker obtained from other sources. At sentencing, Aispuro-Camacho faces 20 years’
imprisonment and a $1,000,000 fine.
IRS Employee Arrested for Stealing Government-Owned Vehicle
On January 11, 2023, in the Central District of California, Graham Hefner was arrested on
one count of theft of IRS property. According to the court documents, on January 10, 2023,
an IRS employee noticed the office’s Government-owned vehicle was no longer in the
parking lot. The same day, Hefner, a 13-year IRS employee, was seen in the office while on
administrative “Leave Without Pay” status. On January 11, 2023, San Jacinto Sheriff's
Department deputies stopped the Government-owned vehicle and identified Hefner as the
driver. In a subsequent interview, Hefner admitted to taking the vehicle keys, the General
Services Administration fuel card, and the vehicle for his personal use. If convicted, Hefner
could receive a maximum term of 10 years in prison and a fine not to exceed $10,000.
5 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.
6 Facts in the summarized case narratives come from court documents of the jurisdiction named.
October 1, 2022 – March 31, 2023│ 21
Identity Theft and the Insider Threat
The following case represents OI’s efforts to address identity theft and the insider threat
during the reporting period: 7
Former IRS Employee Found Guilty in Scheme to Defraud IRS and Commit Identity Theft
On January 26, 2023, in the Eastern District of California, Deena Vang Lee was found guilty
of three counts of wire fraud, two counts of aggravated identity theft, five counts of aiding
and assisting in the preparation and presentation of a false and fraudulent return, and three
counts of making and subscribing a false and fraudulent tax return. Lee, who at certain
times was an IRS employee, prepared and filed tax returns for other individuals that
contained false and fraudulent statements, and filed false information regarding her taxable
income on her personal tax returns. At sentencing, Lee faces a maximum of 20 years in
prison and a $250,000 fine for each of the wire fraud counts; three years in prison and a
$250,000 fine for each of the aiding and assisting in the preparation and presentation of a
false and fraudulent return counts; three years in prison and a $250,000 fine for each of
the making and subscribing a false tax return counts; and a two-year mandatory minimum
sentence and a $250,000 fine for the aggravated identity theft counts.
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 tax administration functions. During this six-month reporting
period, OI provided eight 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
7 Facts in the summarized case narrative come from court documents of the jurisdiction named.
October 1, 2022 – March 31, 2023│ 22
about potential violence or other activities
that could pose a threat to IRS systems,
operations, and employees.
Investigative information sharing between OI 37%
and the IRS’s Office of Employee Protection of OI’s work was
to identify “potentially dangerous” taxpayers investigations of
is one example of TIGTA’s commitment to threats/assaults
protecting IRS employees. Taxpayers who
meet certain IRS criteria receive a
designation as potentially dangerous. Five
years after this designation has been made,
TIGTA conducts a follow-up assessment of the taxpayer so that the IRS 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 37 percent of OI’s work.
The following cases represent OI’s efforts to ensure the safety of IRS employees during the
reporting period: 8
IRS Employee Brandished Toy Gun at IRS Service Center
On January 31, 2023, in the District of Utah, Marc Bryner was charged by criminal complaint
with two counts of providing a false statement during the attempted acquisition of a firearm.
According to the court documents, in January 2023 Bryner made two attempts to purchase
rifles from a firearms dealer. The firearms dealer did not finalize the transfer due to Bryner’s
erratic behavior, and because he appeared to be under the influence. On the same day as
the second attempt to purchase a rifle, Bryner, who was employed as a tax examiner at the
IRS, went to work, approached the security guard window, and brandished a toy gun. Bryner
confirmed he attempted to purchase two rifles and stated he wanted an AR-15 rifle because
the rounds could go “through a vest.” If convicted, Bryner could receive up to 10 years’
imprisonment.
IRS Employee Pleads Guilty to Assaulting, Resisting, or Impeding Federal Officers
On January 4, 2023, in the Southern District of Texas, Ammar Bhatti pled guilty to one count
of assaulting, resisting, or impeding Federal officers. Since March 29, 2021, Bhatti, an IRS
employee, sent threatening and harassing emails and text messages to U.S. government
officials. On June 2, 2021, Bhatti sent a threatening text message to numerous IRS
employees stating the following, “Omw [On my Way] to POD [Post of Duty]. David Stay on
site or die.” During a subsequent interview, Bhatti told the investigating agents, “Your life
will end in five minutes, enjoy your precious time.” Bhatti was sentenced to three years’
probation, and ordered to participate in a mental-health treatment program, and pay a $25
special assessment.
8 Facts in the summarized case narratives come from court documents of the respective jurisdictions named.
October 1, 2022 – March 31, 2023│ 23
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. They may impersonate IRS employees
or misuse IRS seals and symbols; use fraudulent
IRS documentation to perpetrate criminal activity;
25%
of OI’s work was
offer bribes to IRS employees to influence their tax investigating attempts
cases; commit fraud in contracts the IRS awards to to corrupt or impede
contractors; or commit cybercrimes. In addition, tax administration
unscrupulous tax preparers can make unauthorized
disclosures of tax return information, steal Federal
tax refunds, misrepresent their credentials, or
prepare bogus IRS documents.
During this reporting period, investigations into
attempts to corrupt or impede tax administration accounted for 25 percent of OI’s work.
The following cases represent OI’s efforts in this area during the reporting period: 9
Fighting Cybercrime
Massachusetts Man Sentenced for His Role in Paycheck Protection Program Fraud
On November 4, 2022, in the District of Massachusetts, Adley Bernadin was sentenced for
one count of wire fraud for his role in Coronavirus Aid, Relief, and Economic Security Act,
Paycheck Protection Program (PPP) fraud. According to the court documents, in April 2020,
Bernadin obtained an Employer Identification Number (EIN) from the IRS for a home health
care company. In May 2020, Bernadin submitted a fraudulent application for a PPP loan
that falsely represented this company was in operation as of February 15, 2020, and had
employees for whom it paid salaries and payroll taxes using the EIN that he had not
obtained until April 2020. After receiving the PPP funds, Bernadin allegedly used the money
to make home mortgage payments and write checks to individuals with whom he is believed
to have a personal relationship. Bernadin was sentenced to 15 months’ imprisonment,
three years of supervised release, and ordered to pay $229,704 in restitution.
Las Vegas Man Sentenced for Financial Fraud Associated With Misuse of IRS Systems
On January 4, 2023, in the District of Nevada, Jorge Abramovs was sentenced for one count
of bank fraud, one count of monetary transactions in criminally derived property, and one
count of willful failure to account for or pay over Federal Insurance Contribution Act (F.I.C.A.)
9 Facts in the summarized case narratives come from court documents of the respective jurisdictions named.
October 1, 2022 – March 31, 2023│ 24
taxes. According to the court documents, beginning in April 2020, Abramovs submitted
multiple PPP applications with numerous financial institutions. In order to obtain multiple
PPP loans for the same company, Abramovs and others created multiple EINs with the IRS,
using different company names, in order to obtain the EINs. Abramovs then used the
various EINs on the loan applications and falsely claimed that they were associated with the
relevant business. Abramovs was sentenced to five years in prison, followed by three years
of supervised release. He was also ordered to pay restitution in the amount of $2,508,831.
Impersonation Scams and Schemes
Las Vegas Tax Preparer Sentenced to Prison for Multiple Fraud Schemes, Including Filing
False Tax Returns
On November 30, 2022, in the District of Nevada, King Isaac Umoren was sentenced to 13
years and three months in prison, and ordered to pay $5,075,590 in restitution to the
United States and the other victims for filing false tax returns, aggravated identity theft, wire
fraud, money laundering, and impersonating an officer or employee of the United States.
Umoren owned a tax preparation business where he prepared and filed with the IRS his
clients’ tax returns. Umoren included false deductions, included fictitious businesses, and
used the names and the IRS Preparer Tax Identification Numbers of others without their
knowledge. He also posed as a United States Government agent. Umoren induced a victim
to purchase his tax preparation business by using fraudulent documents, including forged
bank statements, fabricated return preparation fee reports, false personal tax returns, tax
forms that had never been filed with the IRS, and stolen tax and personal identifying
information of approximately 12,000 taxpayers who were not clients.
Mexican National Impersonates Internal Revenue Service Employee
On October 26, 2022, in the District of Nevada, Francisco Ivan Velazquez was arrested for
wire fraud, impersonating an officer or employee of the United States, and aiding and
assisting in the preparation of false tax returns. Velazquez appeared at meetings with
victims and pretended to be an IRS employee. Velazquez told victims that funds were
available from an IRS program that allowed people who previously lost a home to
foreclosure to recoup money by applying to and filing certain documents with the IRS.
Velazquez prepared and filed false tax returns that fraudulently claimed the victims were
entitled to refunds in excess of $100,000. Velazquez could receive up to 20 years in prison
for each count of wire fraud and three years for each count of filing a false tax return and for
impersonating an officer or employee of the United States. The court could also order
Velazquez to pay a fine.
College Student Sentenced for Her Role in IRS Impersonation Scheme
On November 15, 2022, in the District of Kansas, Oyindamola Akinrinola was sentenced for
conspiracy to commit wire fraud for her involvement in an IRS impersonation scheme.
According to the court documents, between March 2018 and December 2019, Akinrinola
and co-conspirators led victims to believe they won a $130,000 grant and that FedEx would
October 1, 2022 – March 31, 2023│ 25
deliver the money after a fee was paid. During the course of the scheme, victims received
an image from a Facebook account claiming to be from the IRS, requesting $15,000 before
the grant funds could be released. Akinrinola later acknowledged that over $162,000 in
stolen funds were deposited into her bank account so she could keep a portion of the
money for herself and send the remainder to Nigeria. Akinrinola was sentenced to six
months’ imprisonment, two years of supervised release, and ordered to pay $52,202 in
restitution.
Tax Preparer Outreach
New Jersey Attorney Indicted for Stealing From His IRS Offshore Voluntary Disclosure
Program Clients
On January 11, 2023, in the District of New Jersey, James R. Lisa was indicted on three
counts of wire fraud and four counts of aggravated identity theft. According to the U.S.
Department of Justice press release, in 2014, Lisa was retained by a family to help
repatriate millions of dollars that had been transferred by other family members to offshore
bank accounts decades earlier. Lisa successfully repatriated more than $6 million of the
family’s funds, but proceeded to falsely advise the family that the funds remained offshore.
In 2016, Lisa sent the family fraudulent IRS documents reflecting an agreement with the IRS
for the family to pay $3 million in taxes and penalties for the repatriated funds. In 2018,
Lisa sent the family fraudulent IRS documents reflecting another agreement with the IRS for
the family to pay $2 million in taxes and penalties because purportedly only $4 million was
purportedly repatriated. In fact, the IRS never entered into these agreements, and the IRS
employees who purportedly signed the documents never did so. If convicted, each count of
wire fraud carries a maximum of 20 years in prison and a fine not to exceed $250,000.
Each count of aggravated identity theft carries a mandatory statutory penalty of two years in
prison, which must run consecutively to any other term of imprisonment, and a fine not to
exceed $250,000.
October 1, 2022 – March 31, 2023│ 26
Advance Oversight of America’s Tax System
TIGTA’s Office of Inspections and Evaluations
provides focused and expedited oversight to
quickly assess emerging issues impacting tax
administration and IRS operations. 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 multiagency issues; and
• Develop recommendations to streamline operations, enhance data quality, and
minimize inefficient and ineffective procedures.
National Research Program Tax Return Selection Process for Tax Years 2017 and 2019
(Report Number 2023-IE-R002)
The National Research Program (NRP) seeks to increase public confidence in the fairness of
the tax system by helping the IRS identify where compliance problems occur so the IRS can
efficiently and effectively utilize its resources to address those problems.
In July 2022, a media outlet reported that the
process to select specific taxpayers for the TYs
2017 and 2019 NRP audits may not have been
random. At the request of the Commissioner of
Internal Revenue and representatives from
Congress, TIGTA initiated this review to determine
if the IRS randomly selected individual tax returns
for TYs 2017 and 2019 NRP audits.
TIGTA found that for TYs 2017 and 2019, the
RAAS organization in the IRS selected samples of
October 1, 2022 – March 31, 2023│ 27
more than 10,900 tax returns for NRP audits. TIGTA’s assessment of the original sample
selection process concluded that the IRS randomly selected TYs 2017 and 2019 tax returns
for NRP audits. Specifically, TIGTA found that RAAS determined and provided key decisions
and information related to the tax return selection processes to the contractor prior to
selecting tax returns.
Additionally, TIGTA found that computer programs: 1) categorized returns in the correct
strata; 2) correctly selected tax returns for audit based on criteria for inclusion in the sample
selection file; and 3) did not include malicious code that would force the selection of
taxpayers for an NRP audit. TIGTA confirmed that the processes and computer programs
worked as designed, which reduces the ability to select specific taxpayers for an NRP audit.
However, due to resource constraints, RAAS reduced the original samples of more than
10,900 returns to 4,000 tax returns for both TYs 2017 and 2019, hereafter referred to as
the subsamples. RAAS deviated from the established return sample selection process when
the subsamples were selected. Specifically, RAAS officials did not document the new seed
numbers prior to initiating subsampling. Because the seed numbers were not selected
independently and documented prior to initiating subsampling, there is a risk that the seed
numbers used could have ensured that specific taxpayers from the original sample
remained in the subsamples. TIGTA did not identify any IRS misconduct during the NRP
review.
TIGTA did not make any recommendations for this review.
October 1, 2022 – March 31, 2023│ 28
Investigations Statistical Reports
Significant Investigative Achievements (October 1, 2022, through March 31, 2023)
i
Complaints Against IRS Employees 1,087
Complaints Against Non-Employees 1,351
Total Complaints/Allegations 2,438
Status of Complaints/Allegations Received by TIGTA
Investigations Initiated 624
In Process Within TIGTA 10 390
Referred to IRS for Action 419
Referred to IRS for Information Only 320
Referred to a Non-IRS Entity 11 0
Closed With No Referral 439
Closed Associated With Prior Investigation 119
Closed With All Actions Completed 127
Total Complaints/Allegations 2,438
Investigations Opened and Closed
Total Investigations Opened 1,071
Total Investigations Closed 1,053
Financial Accomplishments
Embezzlement/Theft Funds Recovered $506,093
Contract Fraud and Overpayments Recovered $0
Court-Ordered Fines, Penalties, and Restitution $54,286,526
Out-of-Court Settlements $0
Potentially Compromised by Bribery $0
Tax Liability of Taxpayers Who Threaten and/or Assault IRS Employees $3,804,816
IRS Assets and Resources Protected Against Malicious Loss $3,229
Total Financial Accomplishments $58,600,664
10 Complaints for which final determination had not been made at the end of the reporting period.
11 A non-IRS entity includes other law enforcement entities or Federal agencies.
October 1, 2022 – March 31, 2023│ 29
Status of Closed Criminal Investigations
Criminal Referral Employee Non-Employee Total
Referred – Accepted for Prosecution 12 161 173
Referred – Declined for Prosecution 156 132 288
Referred – Pending Prosecutorial Decision 4 39 43
Total Criminal Referrals 12 172 332 504
No Referral 217 313 530
Criminal Dispositions 13
Criminal Disposition Employee Non-Employee Total
Guilty (convicted) 1 6 7
Guilty (plea) 6 85 91
Nolo Contendere (no contest) 0 2 2
Pretrial Diversion 1 0 1
Deferred Prosecution 14 0 0 0
Not Guilty 0 0 0
Dismissed 2 8 10
Total Criminal Dispositions 10 101 111
Administrative Dispositions on Closed Investigations 15
Removed/Terminated 17
Suspended/Reduction in Grade 15
Resigned/Retired/Separated Prior to Adjudication 60
Oral or Written Reprimand/Admonishment 44
Clearance Letter/Closed, No Action Taken 28
Alternative Discipline/Letter With Cautionary Statement/Other 31
Non-Employee Actions 16 260
Total Administrative Dispositions 455
12 Criminal referrals include both Federal and State dispositions.
13 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.
14 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.
15 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.
16 Administrative actions taken by the IRS against non-IRS employees, e.g., contractors.
October 1, 2022 – March 31, 2023│ 30
Summary of Investigative Reports and Criminal Referrals
Criminal Referral Breakdown
Number of Investigative Reports Issued
Referred to the Department of Justice for Criminal Prosecution 412
Referred to State/Local Prosecuting Authorities 11
Number of Indictments and Criminal Informations
Indictments 154
Criminal Informations 21
Source: TIGTA OI’s Criminal Results Management System.
Interference
During the reporting period, there were no attempts 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 were no investigations of whistleblower retaliation.
October 1, 2022 – March 31, 2023│ 31
Closed Investigations Involving IRS Senior Government Employees18
17
If Declined,
Detailed Description of the Facts and Criminal Date
Disposition Date of
Circumstances of the Investigation 19 Status Referred
Declination
A senior Government employee
allegedly sexually harassed several Other N/A N/A N/A
people.
A senior Government employee
allegedly physically assaulted a Other N/A N/A N/A
subordinate.
A senior Government employee
allegedly forged the name of an IRS Other N/A N/A N/A
employee on an IRS document.
A senior Government employee
allegedly provided preferential Other N/A N/A N/A
treatment to contacts.
A senior Government employee was
allegedly rude and unprofessional to a Other N/A N/A N/A
taxpayer.
17 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.
18 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.§ 405(i)(7).
19 Investigations protected from disclosure by I.R.C. § 6103 are not reflected in this report.
October 1, 2022 – March 31, 2023│ 32
Audit Statistical Reports
Audit Reports With Unimplemented Corrective Actions
The Inspector General Act requires the identification of any recommendations
described in previous semiannual reports, including the potential cost savings of
those recommendations for which corrective actions have not been completed. The
following list is based on information from the Treasury Department’s Joint Audit
Management Information System (JAMES). 20
Report Projected
Issued Report Title and Recommendation Summary
Number Completion
(F = Finding No., R = Recommendation No.)
Date
REVISING TAX DEBT IDENTIFICATION PROGRAMMING AND CORRECTING
PROCEDURAL ERRORS COULD IMPROVE THE TAX REFUND OFFSET
PROGRAM
March
2016-40-028 On Hold 21 F-1, R-1: Revise identification processes to include sole proprietor
2016
information from Form SS-4, Application for Employer Identification Number,
to identify individual tax refunds to offset to business tax debt.
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 1040NR, U.S. Nonresident Alien
May Income Tax Return, accounts in which the Taxpayer Identification Number
2017-40-037 (TIN) is an Employee Identification Number.
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 12/15/23 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 On Hold F-3, R-1: Establish a systemic process to match data fields to perfect
2017
unpostable Forms W-3, Transmittal of Wage and Tax Statements.
20 This summary data does not include recommendations that have been redacted in their entirety because they contain
information specifically prohibited from disclosure in their entirety by any provision of law, such as I.R.C. § 6103, protecting
tax returns and return information, or because they contain information the release of which could reasonably be expected
to allow circumvention of the law.
21 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, 2022 – March 31, 2023│ 33
Report Projected
Issued Report Title and Recommendation Summary
Number Completion
(F = Finding No., R = Recommendation No.)
Date
ADDITIONAL CONTROLS ARE NEEDED TO HELP ENSURE THAT
NONRESIDENT ALIEN INDIVIDUAL PROPERTY OWNERS COMPLY WITH TAX
LAWS
August
2017-30-048 On Hold F-1, R-1: Request that a revision be made to Form 1040-NR to enable
2017
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 Hold 22 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
2018
mandatory 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 Individual Taxpayer Identification Number (ITIN).
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
February
2018-40-013 when IRS data indicate that the sole proprietor is deceased.
2018
04/15/23 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
June 09/15/23 F-2, R-1: Complete a cost analysis to: 1) determine the efficacy of
2018-20-034
2018 relocating Criminal Investigation assets in each of the field offices to
existing IRS computer rooms versus upgrading the Criminal Investigation
computer rooms to ensure that assets are protected in accordance with
Federal and Internal Revenue Manual (IRM) security requirements, and
2) implement the most cost effective solution.
22 This recommendation was agreed to by the IRS, but was placed “On Hold” because the IRS is awaiting input from another
agency.
October 1, 2022 – March 31, 2023│ 34
Report Projected
Issued Report Title and Recommendation Summary
Number Completion
(F = Finding No., R = Recommendation No.)
Date
IMPROVEMENTS ARE NEEDED IN THE WITHHOLDING COMPLIANCE
PROGRAM
2018-30-072 September
2018 On Hold F-3, R-2: Analyze the current selection criteria used by the
Withholding Compliance System to determine if the taxpayers
identified for systemic 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.
BILLIONS OF DOLLARS OF POTENTIALLY ERRONEOUS CARRYFORWARD
CLAIMS ARE STILL NOT BEING ADDRESSED
August
2019-40-044
2019 10/15/23 F-1, R-2: Identify and examine returns with discrepancies of General
Business Credit carryforward claims.
ADDITIONAL ACTIONS ARE NEEDED TO REDUCE ALIMONY REPORTING
DISCREPANCIES ON INCOME TAX RETURNS
August On Hold F-2, R-1: Include the validation of the alimony recipient TIN as part of the
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 09/15/23 F-3, R-1: Ensure the retention of Bring Your Own Device program
2019
application 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 Service-wide processes and procedures to ensure that
all operating divisions suppress the issuance of nonstatutory notices to
taxpayers that have an undelivered mail indicator on their account;
September suppress the issuance of correspondence when a taxpayer’s address of
2019-40-074
2019 record is an 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.
IMPROVEMENTS ARE NEEDED TO ENSURE THAT CONSISTENT SUITABILITY
CHECKS ARE PERFORMED FOR PARTICIPATION IN INTERNAL REVENUE
SERVICE PROGRAMS
November
2020-40-005 On Hold F-4, R-2: Develop processes and procedures to ensure that continuous
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.
October 1, 2022 – March 31, 2023│ 35
Report Projected
Issued Report Title and Recommendation Summary
Number Completion
(F = Finding No., R = Recommendation No.)
Date
COMPLEXITY AND INSUFFICIENT OVERSIGHT OF THE FREE FILE PROGRAM
RESULT IN LOW TAXPAYER PARTICIPATION
February 02/15/24 F-1, R-2: Require Free File Inc. members to fully disclose all criteria on the
2020-40-009
2020 IRS.gov Free File web page that taxpayers must meet to e-file their Federal
tax return for free.
SOME CORRECTIVE ACTIONS TO ADDRESS REPORTED INFORMATION
TECHNOLOGY WEAKNESSES WERE NOT FULLY AND EFFECTIVELY
IMPLEMENTED AND DOCUMENTED
June
2020-20-022 12/15/23 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.
THE INTERNAL REVENUE SERVICE CAN IMPROVE TAXPAYER COMPLIANCE
FOR VIRTUAL CURRENCY TRANSACTIONS
September
2020-30-066 On Hold 23 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.
EXPANSION OF SELF-CORRECTION FOR ELECTRONIC FILERS AND OTHER
IMPROVEMENTS COULD REDUCE TAXPAYER BURDEN AND COSTS
ASSOCIATED WITH TAX RETURN ERROR RESOLUTION
December
2021-40-008
2020 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.
ADDITIONAL SECURITY PROCESSES ARE NEEDED TO PREVENT
UNAUTHORIZED RELEASE OF TAX INFORMATION THROUGH THE INCOME
VERIFICATION EXPRESS SERVICE PROGRAM
February
2021-45-017 2021 On Hold F-4, R-1: Allocate sufficient resources to the Income Verification Express
Service 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.
TAXPAYER FIRST ACT: DATA SECURITY IN THE IDENTITY THEFT TAX REFUND
FRAUD INFORMATION SHARING AND ANALYSIS CENTER
May
04/15/24 F-3, R-1: Ensure that the Information Sharing and Analysis Center’s alternate
2021-25-025 2021 processing site is converted to a ******** that achieves the maximum
tolerable downtime to prevent any filing season delays. 24
23 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.
24 Redaction due to subject matter that might create a risk of circumvention of the law if publicly released.
October 1, 2022 – March 31, 2023│ 36
Report Projected
Issued Report Title and Recommendation Summary
Number Completion
(F = Finding No., R = Recommendation No.)
Date
CRIMINAL RESTITUTION ASSESSMENT PROCEDURES NEED IMPROVEMENT
2021-30-033 June 07/15/23 F-2, R-1: Establish monitoring procedures to provide reasonable assurance
2021 that all interest and penalties incorrectly assessed to Restitution-Based
Assessment accounts are removed.
CONTROLS OVER THE INTERNAL REVENUE SERVICE CONTRACTOR TAX
CHECK PROCESS NEED TO BE IMPROVED
06/30/23 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
2021-30-042
2021 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.
ENTERPRISE CASE MANAGEMENT DEPLOYED ITS INITIAL RELEASE, BUT
PROCESS IMPROVEMENTS ARE NEEDED FOR FUTURE RELEASES
2021-20-059 September
2021 09/15/23 F-2, R-1: Ensure that quantifiable metrics are in place to allow traceability of
the ECM program progress from planning through decommissioning.
****************PLATFORM MANAGEMENT NEEDS IMPROVEMENT 25
September 12/15/23 F-3, R-1: Retire older **************** and migrate to more
2021-20-063
2021 current *************** in accordance with the documented
migration plan. 26
THE DATA AT REST ENCRYPTION PROGRAM HAS MADE PROGRESS WITH
IDENTIFYING ENCRYPTION SOLUTIONS, BUT PROJECT MANAGEMENT NEEDS
September IMPROVEMENT
2021-20-066
2021
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 LEGAL
GUIDELINES WHEN ISSUING LEVIES
September 05/15/23 F-2, R-1: Ensure that corrective programming is implemented so that the
2021-30-069 2021 Automated Collection System will block levies for which the final Collection
Due Process notice is reversed or disqualified.
25 Redaction due to subject matter that might create a risk of circumvention of the law if publicly released.
26 Redaction due to subject matter that might create a risk of circumvention of the law if publicly released.
October 1, 2022 – March 31, 2023│ 37
Report Projected
Issued Report Title and Recommendation Summary
Number Completion
(F = Finding No., R = Recommendation No.)
Date
FISCAL YEAR 2020 DIGITAL ACCOUNTABILITY AND TRANSPARENCY ACT
REPORTING COMPLIANCE
October 06/30/23 F-1, R-1: Implement the automated quality review program and use the
2022-10-003 2021 results of the quality reviews to guide training focused on high error rate
elements.
VULNERABILITY SCANNING AND REMEDIAITON PROCESSES NEED
IMPROVEMENT
09/15/23 F-1, R-1: Establish an entity to oversee enterprise-wide vulnerability
December remediation to ensure that vulnerabilities are remediated within required
2022-20-006 time frames, the Plan of Action and Milestones and Risk-Based Decisions
2021
are documented as required, and vulnerability remediation metrics are
reviewed and reported to appropriate leadership.
INCREASED AVAILABILITY OF TAX RESOURCES AND INFORMATION FOR
LIMITED ENGLISH PROFICIENT AND VISUALLY IMPAIRED TAXPAYERS HAS
ENHANCED ASSISTANCE, BUT ADDITIONAL IMPROVEMENTS ARE NEEDED
12/15/25 F-4, R-1: Implement a more centralized and structured approach that
includes an assessment of factors including high-volume notices and letters
issued to taxpayers to ensure that frequently issued notices and letters as
December well as those that have significant impact on the taxpayer are translated into
2022-40-008 2021 Spanish.
12/15/25 F-5, R-2: Establish a process for Limited English Proficient (LEP) taxpayers to
provide feedback on their experience using the Over-the-Phone Interpreter
(OPI) service.
12/15/25 F-5, R-3: Establish a customer satisfaction measurement system to assess
the overall satisfaction with OPI service.
12/15/25 F-6, R-1: Establish specific performance measures and goals to effectively
assess the assistance provided to LEP and visually impaired taxpayers.
OVERSIGHT OF THE LOW-INCOME HOUSING TAX CREDIT PROGRAM CAN BE
IMPROVED
10/15/23 F-1, R-2: Establish an effective quality review system for the processing of
Low Income Housing Tax Credit (LIHTC) forms received from the Housing
Credit Agencies and building owners to identify areas requiring corrective
2022-30-012 January action, employee training, or outreach.
2022 10/15/23 F-2, R-2: Determine the feasibility of establishing an examination selection
process for taxpayers submitting questionable LIHTC claims on Forms 3800,
General Business Credit, that do not correspond to supporting Forms 8609-
A, Annual Statement for Low-Income Housing Credit, or pass-through
Schedules K-1, Partner’s Share of Income, Deductions, and Credits, etc.
ADMINISTRATION OF THE INDIVIDUAL TAXPAYER IDENTIFICATION NUMBER
PROGRAM
08/15/23 F-1, R-1: Ensure that ITIN managers receive complete Real-Time System
extracts for use in the monthly reviews to identify ITIN applications with
duplicate entity information or supporting documents.
06/15/23 F-1, R-5: Review the 5,298 tax returns that TIGTA identified for which the
January IRS incorrectly allowed retroactive credit claims and take steps to ensure
2022-40-013 that these erroneous benefits are recovered.
2022
Potential Funds Put to Better Use: $5,634,868
09/15/23 F-2, R-8: Ensure that the taxpayers associated with the 2,118 ITINs who had
a tax return rejected because their ITIN was no longer valid receive the
benefits to which they are entitled.
October 1, 2022 – March 31, 2023│ 38
Report Projected
Issued Report Title and Recommendation Summary
Number Completion
(F = Finding No., R = Recommendation No.)
Date
EMPLOYEE PLANS EXAMINATION QUALITY REVIEW SCORES HAVE DECLINED,
AND EFFORTS TO IDENTIFY TRENDS AND IMPLEMENT CORRECTIVE ACTIONS
COULD BE IMPROVED
February 07/15/23 F-1, R-6: Ensure that Employee Plans Examinations’ proposed corrective
2022-10-014 actions are implemented timely and should develop performance metrics and
2022
data collection methods to measure the effectiveness of the corrective actions
to improve quality scores.
PLANS TO CLOSE THE AUSTIN TAX PROCESSING CENTER SHOULD BE
HALTED UNTIL HIRING CHALLENGES AND SUBSTANTIAL BACKLOGS AT
REMAINING CENTERS ARE ADDRESSED
02/15/24 F-1, R-1: Allocate adequate funding to support Submission Processing
2022-40-015 function’s transition of its clerical staff to the new, higher-graded position
February
2022 descriptions.
06/15/23 F-2, R-1: Identify and implement interim solutions that will address the
resource constraints currently being placed on the Submission Processing
function due to its backlog.
12/15/24 F-3, R-1: Ensure that efforts to evaluate and purchase updated or new mail
opening/sorting technology are timely addressed.
CENTRALIZED PARTNERSHIP AUDIT REGIME RULES HAVE BEEN
IMPLEMENTED; HOWEVER, INITIAL NO-CHANGE RATES ARE HIGH AND
March MEASURABLE GOALS HAVE NOT BEEN ESTABLISHED
2022-30-020
2022
10/15/23 F-2, R-1: Implement a fully systemic method of monitoring and verifying
pushouts to ensure that they are properly reported on partners’ returns.
THE ADMINISTRATION OF PARTIAL PAYMENT INSTALLMENT AGREEMENTS
NEEDS IMPROVEMENT
11/15/23 F-1, R-1: Inform taxpayers of the availability of Partial Payment Installment
Agreements (PPIA) and provide outreach and information in the following
areas: 1) tax topics and tips on the IRS public website; 2) instructions
referencing PPIAs including what is required to qualify for a PPIA; and 3)
collection notices.
11/15/23 F-1, R-2: Explore and consider additional potential changes to the
March instructions for Form 9465, Installment Agreement Request, concerning
2022-30-021
2022 PPIAs.
11/15/23 F-2, R-1: Extend Accounts Management Services history note retention
requirements pertaining to taxpayers’ Forms 433-F, Collection Information
Statement, and financial analyses.
11/15/23 F-2, R-3: Request a change to Computer Paragraph 522, Installment
Agreement – Review Financial Condition, to notify taxpayers that the
financial information that they provide may result in a higher or lower
installment amount or no change to their installment amount.
October 1, 2022 – March 31, 2023│ 39
Report Projected
Issued Report Title and Recommendation Summary
Number Completion
(F = Finding No., R = Recommendation No.)
Date
THE IRS PRIVATE DEBT COLLECTION PROGRAM HAS NOT EFFECTIVELY
REPORTED ALL PROGRAM COSTS OR INCLUDED ADEQUATE DISCLOSURES
10/15/23 F-1, R-1: Address the growing balance of $25.8 million in the Cost of
Services Fund, disclose in its Annual Reports to Congress the net revenue
sent from the Private Debt Collection (PDC) program to the General Fund,
and determine the amount necessary to retain to pay the Private Collection
March Agencies without causing further growth in the Cost of Services Fund.
2022-30-022
2022 Potential Funds Put to Better Use: $25,763,453
08/15/23 F-8, R-1: Adjust the Special Compliance Personnel Fund by $607,099 and
disclose this in the next PDC and Special Compliance Personnel Program
Annual Report to Congress.
Potential Questioned Costs: $607,099
08/15/23 F-9, R-1: Adjust the indirect costs by $639,070 and disclose these
adjustments in the next Annual Report to Congress.
RESULTS OF THE 2021 FILING SEASON
07/15/23 F-1, R-2: Review and correct the remaining 183 out of 191 cases that TIGTA
identified and recover the Additional Child Tax Credit (ACTC) amounts that
were issued in error.
Potential Funds Put to Better Use: $2,925,923
March F-1, R-3: Review and correct the 14,030 tax returns for which the tax
2022-40-024 07/15/23
2022 examiner did not allow the use of the Tax Year 2019 earned income to
calculate the Earned Income Tax Credit (EITC) amount.
Potential Funds Put to Better Use: $485,415
07/15/23 F-1, R-4: Review and correct the 9,592 tax returns for which the tax
examiner did not allow the Tax Year 2019 earned income to calculate the
ACTC amount.
Potential Funds Put to Better Use: $1,523,473
IMPROVEMENTS ARE NEEDED WHEN DOCUMENTING AND MONITORING
EMPLOYEE LEAVE
09/15/23 F-1, R-1: Ensure that the IRM and additional guidance available to
employees and managers for requesting and approving Family and Medical
Leave Act leave is clear and consistent.
04/15/23 F-1, R-2: Review the delivery methods of available training, guidance, and
March other resources to managers to ensure that managers comply with, and are
2022-10-025
2022 aware of, the procedures for approving and administering leave options.
06/15/24 F-2, R-2: Update the manager’s guidance for the Employee Performance File
to be consistent with the revised records management guidance.
09/15/23 F-3, R-1: Revise the IRM so that it is consistent with U.S. Office of Personnel
Management (OPM) guidance and the Manager’s Guide to Penalty
Determinations and clarifies the actions managers should take when
employees are charged with Absence Without Leave.
October 1, 2022 – March 31, 2023│ 40
Report Projected
Issued Report Title and Recommendation Summary
Number Completion
(F = Finding No., R = Recommendation No.)
Date
PROGRAM AND ORGANIZATIONAL CHANGES ARE NEEDED TO ADDRESS THE
CONTINUED INADEQUATE TAX ACCOUNT ASSISTANCE PROVIDED TO
TAXPAYERS
09/15/23 F-2, R-1: Evaluate establishing two distinct IRS programs as part of the IRS
reorganization under the Taxpayer First Act – one dedicated to answering
toll-free telephone calls and another dedicated to working Accounts
Management inventory – with adequate staffing to provide appropriate
service to taxpayers using each channel.
06/15/23 F-3, R-3: Complete a strategic review of all 10 Image Control Team (ICT)
sites to determine what contributes to the ICT’s inability to timely scan and
validate documents.
10/15/24 F-3, R-7: Ensure that programming is updated to systemically reject
electronic submissions of Forms 2848, Power of Attorney and Declaration of
Representative, and 8821, Tax Information Authorization, when missing one
March of the five essential elements without manually mailing a rejection letter.
2022-46-027 F-3, R-9: Develop an action plan to prioritize the continued expansion of
2022 06/15/23
documents that can be sent in via electronic fax and converted into a
Correspondence Imaging System image.
06/15/23 F-3, R-10: Identify priority work that needs to be expedited by the ICT and
assess the feasibility of creating an electronic fax number to receive this
inventory.
10/15/24 F-4, R-4: Develop a process to systemically pull all controlled inventory for
each Accounts Management site for the Accounts Management Inventory
Report to ensure consistency, reduce human error, and increase
efficiencies.
REDESIGN EFFORTS FOR MOST TAXPAYER FIRST ACT SECTION 1302
REQUIREMENTS WERE PLANNED OR COMPLETED; HOWEVER,
IMPLEMENTATION SCHEDULES AND REORGANIZATION PLANS NEED TO BE
FINALIZED
2022-15-031 March
06/15/23 F-1, R-1: Ensure that requests for organizational change are properly
2022 prepared, submitted, and approved prior to implementing any additional
changes to the IRS’s organizational structure.
THE CHILD TAX CREDIT UPDATE PORTAL WAS SUCCESSFULLY DEPLOYED,
BUT SECURITY AND PROCESS IMPROVEMENTS ARE NEEDED
06/30/23 F-3, R-2: Ensure that formal documentation is created that shows that all the
2022-27-028 May 2022 privacy controls applicable to the Secure Access Digital Identity (SADI) system
are properly selected, implemented, and assessed.
09/15/24 F-5, R-1: Ensure that all Child Tax Credit Update Portal and SADI system
associated Plans of Actions and Milestones are completed timely based on
IRS-defined timelines and processes.
PROCESSING OF RECOVERY REBATE CREDIT CLAIMS DURING THE 2021
FILING SEASON
2022-46-032 May 2022 10/15/23 F-1, R-1: Review the returns that TIGTA identified and provide the corrective
actions that the IRS intends to take.
10/15/23 F-1, R-3: Review the returns that TIGTA identified and take the actions
necessary to ensure that taxpayers receive the amount of the Recovery
Rebate Credit they are entitled to receive.
Potential Funds Put to Better Use: $217,927,531
October 1, 2022 – March 31, 2023│ 41
Report Projected
Issued Report Title and Recommendation Summary
Number Completion
(F = Finding No., R = Recommendation No.)
Date
A SERVICE-WIDE STRATEGY IS NEEDED TO ADDRESS CHALLENGES
LIMITING GROWTH IN BUSINESS TAX RETURN ELECTRONIC FILING
03/15/24 F-1, R-1: Develop a Service-wide strategy to incorporate all forms for e-
2022-40-036 May 2022 filing. This strategy should include processes and procedures to compile an
accurate and comprehensive list of forms not available for e-filing along
with prioritization and specific timelines for the continued addition of forms
for e-filing.
REVIEW OF THE INDEPENDENT OFFICE OF APPEALS COLLECTION DUE
PROCESS PROGRAM
2022-10-043 August 06/15/23 F-1, R-1: Reinforce the existing procedures for Appeals personnel to ensure
2022 that the correct Collection Statute Expiration Dates (CSED) are posted to
taxpayer accounts.
06/15/23 F-1, R-2: Update the inaccurate suspension dates for the 18 taxpayer
cases that TIGTA identified with CSED errors.
COMPLIANCE EFFORTS ARE NEEDED TO ADDRESS REFUND CLAIMS
REPORTED ON FORM 1139 THAT ARE BASED ON THE CARES ACT NET
OPERATING LOSS CARRYBACK PROVISIONS
07/15/24 F-1, R-1: Track and monitor examination results for the 25 “still open”
examinations of Forms 1120, U.S. Corporation Income Tax Return, with
reported net operating losses (NOL) and an associated Form 1139,
Corporation Application for Tentative Refund, excluding Joint Committee
2022-35-049 August Refund cases which currently have specific monitoring requirements in
2022 place.
02/15/25 F-1, R-2: Use the examination results from Recommendation 1 to assess
whether to increase the number of examinations of Forms 1120 with
reported NOL and an associated Form 1139.
07/15/24 F-2, R-1: Review the examination results and computations of proposed
NOL adjustments for the 25 “still open” Form 1120 examinations with
associated Forms 1139, excluding Joint Committee Refund cases which
currently have specific review requirements in place, to determine if the
interim guidance regarding NOLs is being properly followed.
DELAYS CONTINUE TO RESULT IN BUSINESSES NOT RECEIVING PANDEMIC
RELIEF BENEFITS
10/15/23 F-2, R-1: Review the 928 business entities identified that do not appear to
2022-46-059 August qualify as a recovery startup business and take actions needed to recover
2022 the Employee Retention Credits that are determined to be erroneous.
12/15/23 F-3, R-5: Submit a request for the development of a systemic process to
identify Form 941-X, Adjusted Employers QUARTERLY Federal Tax Return or
Claim for Refund, claims that meet referral criteria and alert the Accounts
Management employee when processing these claims of the need to refer
the return to Examination.
THE PROCESS FOR TRACKING PHYSICAL SECURITY WEAKNESSES
IDENTIFIED IN IRS FACILITIES DOES NOT ENSURE THAT VULNERABILITIES
ARE PROPERLY ADDRESSED
2022-10-046 September 10/15/23 F-1, R-1: Ensure that countermeasure recommendations, approvals or
2022 denials, implementation decisions and actions, risk acceptance
decisions, and the associated cost of countermeasure implementation
are adequately tracked and maintained in a central location.
10/15/23 F-1, R-3: Ensure that all recommended countermeasures identified in the
most recent risk assessment for each facility are tracked until a new risk
assessment is completed using the new countermeasure tracking
mechanism.
October 1, 2022 – March 31, 2023│ 42
Report Projected
Issued Report Title and Recommendation Summary
Number Completion
(F = Finding No., R = Recommendation No.)
Date
MAINFRAME PLATFORM CONFIGURATION COMPLIANCE CONTROLS
NEED IMPROVEMENT
2022-20-050 September 04/15/23 F-1, R-3: Ensure that the weighted configuration compliance scores
include the results of completed **************. 27
2022 07/15/23 F-1, R-7: Ensure that agency procedures are updated to include
checklist adjudication requirements for the mainframe platforms.
CLOUD SERVICES WERE IMPLEMENTED WITHOUT KEY SECURITY
CONTROLS, PLACING TAXPAYER DATA AT RISK
2022-20-052 September 10/15/24 F-1, R-1: Expedite full implementation of the cloud security control
infrastructure **************. 28
2022 09/15/23 F-1, R-2: Develop an implementation plan for selected cloud capability
gaps relating to identity and access management, data and
infrastructure protection, continuous security monitoring, and program
management.
THE END-USER INCIDENT MANAGEMENT PROCESS CAN BE IMPROVED
2022-20-053 September 06/15/23 F-1, R-1: Ensure that incident ticket handling requirements are
2022 followed including selecting specific codes related to the issues,
documenting actions taken including the reason for reassignments,
and obtaining user concurrence before closing the incident ticket.
IMPROVEMENTS ARE NEEDED FOR AN EFFECTIVE USER BEHAVIOR
ANALYTICS CAPABILITY
2022-20-055 September
2022 06/15/23 F-2, R-1: Ensure that the User Behavior Analytics Capability team
implements a process to document feedback from stakeholders on
referred incidents.
DELAYS IN MANAGEMENT ACTIONS CONTRIBUTE TO THE CONTINUED
TAX PROCESSING CENTER BACKLOGS
2022-46-057 September
2022 01/15/29 F-4, R-1: Ensure that the various products and IRS.gov landing pages
are updated to reflect acceptable methods for faxing information to
the IRS.
27 Redaction due to subject matter that might create a risk of circumvention of the law if publicly released.
28 Redaction due to subject matter that might create a risk of circumvention of the law if publicly released.
October 1, 2022 – March 31, 2023│ 43
Report Projected
Issued Report Title and Recommendation Summary
Number Completion
(F = Finding No., R = Recommendation No.)
Date
FISCAL YEAR 2022 STATUTORY REVIEW OF DISCLOSURE OF COLLECTION
ACTIVITY WITH RESPECT TO JOINT RETURNS
10/15/23 F-1, R-1: Update the Office of Appeals IRM to provide guidance on what
collection activity must be disclosed and what collection activity must not be
disclosed to taxpayers who jointly filed returns, whether they are married,
divorced, or separated and whether or not they have mirrored accounts.
10/15/23 F-1, R-2: Require I.R.C. §§ 6103(e)(7) and (e)(8) refresher training for all
appeals officers and settlement officers in Appeals regarding employee
requirements to disclose collection activity on jointly filed returns when
requested from individuals who are no longer married or no longer reside in
the same household, whether or not they have mirrored accounts, and the
2022-30-058 September nondisclosure of prohibited taxpayer information.
2022 09/15/23 F-1, R-3: Update the Taxpayer Advocate Service’s (TAS) IRM 13.1.18,
Resolving TAS Cases, to provide a cross-reference to IRM 13.1.16, Receipt
and Assignment of TAS Cases, which contains commonly encountered
scenarios, explaining what collection activity must be disclosed to taxpayers
who jointly filed returns, whether they are married, divorced, or separated and
whether or not they have mirrored accounts.
04/15/23 F-1, R-4: Require I.R.C. §§ 6103(e)(7) and (e)(8) refresher training for all
case advocates and intake advocates in the TAS regarding employee
requirements to disclose collection activity on jointly filed returns when
requested from individuals who are no longer married or no longer reside in
the same household, whether or not they have mirrored accounts, and the
nondisclosure of prohibited taxpayer information.
FISCAL YEAR 2022 STATUTORY REVIEW OF COMPLIANCE WITH LEGAL
GUIDELINES WHEN ISSUING LEVIES
06/15/24 F-1, R-3: Ensure that the necessary programming changes are made to
address the recommendations made in last year’s review.
06/15/24 F-2, R-1: Monitor the average processing time of Collection Due Process
2022-30-061 September hearing requests and, if warranted, outline and make recommendations to
2022 revise procedures and/or develop automation tools to ensure the timely input
of the transaction code.
06/15/24 F-3, R-1: Ensure that corrective programming is implemented so that the
Integrated Collection System (ICS) looks for existing Centralized Authorization
File (CAF) information, updates the system accordingly, and notifies the
revenue officer when there is a discrepancy between the Power Of Attorney
information in the ICS and the CAF.
ADDITIONAL ACTIONS ARE NEEDED TO ENSURE COMPLIANCE WITH THE
SECTION 965 REPATRIATION TAX
10/15/23 F-2, R-1: Revise the CP56 and CP256 notices to add more information on
how the Section 965 installment payments should be made.
10/15/23 F-2, R-2: Ensure that any business requirements developed by the “Section
965 Core Team” systemically identify all Section 965 payments that are
2022-34-062 September applied to TY 2019 or later tax modules so they can be evaluated to
2022 determine if they were correctly processed.
10/15/23 F-3, R-2: Develop procedures to identify S Corporation shareholders who
made an election under Section 965(i) and who did not annually submit the
Form 965-A, Individual Report of Net 965 Tax Liability, or did not report the
correct amount of the Section 965 deferral on the Form 965-A.
Potential Increased Revenue: $6,265,523
October 1, 2022 – March 31, 2023│ 44
Report Issued Projected Report Title and Recommendation Summary
(F= Finding No. and R=Recommendation No.)
Number Completion
Date
THE IRS NEEDS TO IMPROVE ITS DATABASE VULNERABILITY SCANNING AND
PATCHING CONTROLS
10/15/24 F-1, R-1: Ensure that ***************** 29 is performed on all IBM
mainframe databases.
10/15/23 F-2, R-1: Ensure that **************** 30 are performed on the cloud
systems when possible.
10/15/23 F-2, R-2: Ensure that the IRS provides oversight to cloud service providers
and obtains detailed scan results so the IRS can assess the database
2022-20-065 September vulnerabilities.
2022 05/15/23 F-3, R-1: Ensure that IRS policy is followed and create Plans of Action and
Milestones for unresolved issues from ****************. 31
08/20/23 F-4, R-1: Ensure that databases are patched or upgraded to the latest
version or appropriately document risk acceptance with a risk-based decision
or Risk Acceptance Form and Tool.
FISCAL YEAR 2022 STATUTORY AUDIT OF COMPLIANCE WITH LEGAL
GUIDELINES RESTRICTING THE USE OF RECORDS OF TAX ENFORCEMENT
RESULTS
05/31/23 F-1, R-1: Ensure that the 12 RRA 98 § 1204(a) violations identified by TIGTA
are discussed with the responsible managers to ensure that the managers
2022-30-067 September understand the guidelines related to the use of the records of tax
2022 enforcement results.
05/31/23 F-1, R-2: Ensure that the four self-assessments that contained high-risk
terms and phrases are discussed with the responsible employees and their
managers so they understand IRS policy that these terms should not be used
in self-assessments.
29 Redaction due to subject matter that might create a risk of circumvention of the law if publicly released.
30 Redaction due to subject matter that might create a risk of circumvention of the law if publicly released.
31 Redaction due to subject matter that might create a risk of circumvention of the law if publicly released.
October 1, 2022 – March 31, 2023│ 45
Inspections and Evaluations Statistical Reports
Evaluation Reports With Unimplemented Corrective Actions
The Inspector General Act requires identification of recommendations described in previous
semiannual reports, including the potential cost savings of those recommendations, 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).
Report Issued Projected
Report Title and Recommendation Summary
Number Completion
(F = Finding No., R = Recommendation No.)
Date
OVERSIGHT OF REPORTED SEXUAL HARASSMENT ALLEGATIONS NEEDS
IMPROVEMENT
2021-IE-R001 March 2021 06/30/23 F-2, R-3: Review all relevant policies and procedures and ensure that
guidance on how to address sexual harassment allegations is
available to all employees.
October 1, 2022 – March 31, 2023│ 46
Appendix I
Other Reports
The Inspector General Act requires Inspectors General to address the following issues for the
Offices of Audit and Inspections and Evaluations: 32
Issue Result for TIGTA
Interference/Access to Information
Report any attempt to interfere with the independence of TIGTA, As of March 31, 2023, there were no attempts to
including: budget constraints designed to limit the capabilities of interfere with the independence of TIGTA or
TIGTA; and incidents of resistance or objection to oversight
instances of restricted or significantly delayed
activities of TIGTA.
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, 2023, there were no instances
Provide information on significant management decisions in in which significant recommendations were
response to recommendations with which the Inspector General disputed.
disagrees.
Revised Management Decisions
Provide a description and explanation of the reasons for any As of March 31, 2023, there were no significant
significant revised management decisions made during the revised management decisions.
reporting period.
Reports Issued in the Prior Reporting Period With No
Management Response As of March 31, 2023, there were no prior
Provide a summary of each report issued before the beginning of reports for which management’s response was
the current reporting period for which no management response not received within 60 days of issuance.
was received within 60 days of the report issuance date.
Management Decisions Issued in the Current Reporting Period
For Any Reports Issued in a Prior Reporting Period As of March 31, 2023, there were no reports
issued during the prior reporting period for which
Provide a summary of reports issued before the beginning of the management’s response was received during the
current reporting period for which a management response was current reporting period.
received during the current reporting period.
Disclosure
Provide detailed descriptions of the circumstances of each As of March 31, 2023, there were no reports that
inspection, evaluation, and audit that was closed by the agency were closed and not disclosed to the public.
and was not disclosed to the public.
Review of Legislation and Regulations
TIGTA’s Office of Chief Counsel reviewed 85
Review existing and proposed legislation and regulations, and proposed regulations and legislative requests
make recommendations concerning the impact of such during this reporting period.
legislation or regulations.
32 Results listed are for this reporting period only.
October 1, 2022 – March 31, 2023│ 47
Appendix II
Audit Products
Issued October 1, 2022, through March 31, 2023 33
Report Title Report Number/ Link 34
October 2022
More Information Is Needed to Make Informed Decisions on
2023-10-001
Streamlined Applications for Tax Exemption
November 2022
More Should Be Done to Increase Use and Availability of
2023-30-003
the IRS’s Taxpayer Digital Communication Tools
Controls to Prevent and Recover From Ransomware Attacks 2023-20-002
Were Generally Effective
December 2022
Procedural Changes and Training Could Improve the
Processing of Proposed Denied Applications for Tax 2023-10-004
Exemption
Backlogs of Tax Returns and Other Account Work Will
2023-46-007
Continue Into the 2023 Filing Season
Fiscal Year 2023 Biannual Independent Assessment of
2023-30-005
Private Collection Agency Performance
January 2023
Review of the Internal Revenue Service’s Purchase Card 2023-10-012
Violations Report and the Status of Recommendations
February 2023
Opportunities Exist for the IRS to Develop a More
Coordinated Approach to Examination Workplan 2023-30-008
Development and Resource Allocation
Actions Have Been Taken to Implement Taxpayer First Act
Provisions Related to the IRS Independent Office of 2023-15-010
Appeals; However, Some Improvements Are Still Needed
Improvements to the Employment Tax Examination Process
Are Needed to Increase Taxpayer Compliance and 2023-30-009
Collection Potential
33 Unless otherwise noted, IRS management decisions were made by the end of the reporting period for all audit products
listed in this appendix.
34 Dollar values for any recommendations with Questioned Costs and/or Funds Put to Better Use are available in the
Outcome Measure Appendix of the report linked, if applicable.
October 1, 2022 – March 31, 2023│ 48
March 2023
The IRS Has Not Adequately Prioritized Federal Civilian
2023-30-011
Employee Nonfilers
Additional Actions Are Needed to Improve and Secure the
2023-45-014
Income Verification Express Service Program
Additional Actions Could Improve the Quality and
Productivity of Employment Tax Examinations of Federal, 2023-10-015
State, and Local Governments
The IRS Implemented the Business Entitlement Access
2023-20-013
Request System; However, Improvements Are Needed
Actions Are Needed to Improve the Completeness,
2023-10-016
Development, and Review of IRS Tax Gap Estimates
The Enterprise Case Management System Did Not
2023-20-018
Consistently Meet Cloud Security Requirements
The IRS Eliminated Its Employee Suggestion Program
2023-30-020
Without Plans for a Replacement
Significant Progress Has Been Made Implementing the
2023-15-022
Taxpayer First Act
Results of the 2022 Filing Season 2023-40-021
October 1, 2022 – March 31, 2023│ 49
Appendix III
Inspections and Evaluations Products
Issued October 1, 2022, through March 31, 2023 35
Report Title Report Number/ Link 36
October 2022
Physical Security Controls at the ****************** 37 2023-IE-R001
November 2022
National Research Program Tax Return Selection Process for 2023-IE-R002
Tax Years 2017 and 2019
January 2023
Inflation Reduction Act: Assessment of the Internal Revenue 2023-IE-R003
Service Implementation Efforts
35 Unless otherwise noted, IRS management decisions were made by the end of the reporting period for all audit products
listed in this appendix.
36 Dollar values for any recommendations with Questioned Costs and/or Funds Put to Better Use are available in the
Outcome Measure Appendix of the report linked, if applicable.
37 Redaction due to subject matter that might create security risk if publicly released.
October 1, 2022 – March 31, 2023│ 50
Appendix IV
TIGTA’s Statutory Reporting Requirements
The following table reflects the FY 2023 statutory reviews.
Reference to
Explanation of the Provision Comments/TIGTA Audit Status
Statutory Coverage
Enforcement Statistics Requires TIGTA to evaluate the IRS’s
compliance with restrictions under RRA Fieldwork currently in process.
I.R.C. § 7803(d)(1)(A) 98 § 1204 on the use of enforcement
statistics to evaluate IRS employees.
Restrictions on Directly Contacting Requires TIGTA to evaluate the IRS’s
Taxpayers compliance with restrictions under Fieldwork currently in process.
I.R.C. § 7521 on directly contacting
I.R.C. § 7803(d)(1)(A)(ii) taxpayers who have indicated they prefer
their representatives be contacted.
Filing of a Notice of Lien Requires TIGTA to evaluate the IRS’s
compliance with required procedures Fieldwork currently in process.
I.R.C. § 7803(d)(1)(A)(iii) under I.R.C. § 6320(a) upon the filing of a
notice of lien.
Extensions of the Statute of Requires TIGTA to include information
Limitations for Assessment of Tax regarding extensions of the statute of
limitations for assessment of tax under
I.R.C. § 7803(d)(1)(C) I.R.C. § 6501 and the provision of notice to Fieldwork currently in process.
I.R.C. § 6501(c)(4)(B) taxpayers regarding the right to refuse or
limit the extension of particular issues or a
particular period of time.
Levies Requires TIGTA to evaluate the IRS’s
I.R.C. § 7803(d)(1)(A)(iv) compliance with required procedures under Fieldwork currently in process.
I.R.C. § 6330 regarding levies.
October 1, 2022 – March 31, 2023│ 51
Reference to
Explanation of the Provision Comments/TIGTA Audit Status
Statutory Coverage
Collection Due Process Requires TIGTA to evaluate the IRS’s
compliance with required procedures Fieldwork currently in process.
I.R.C. §§ 7803(d)(1)(A)(iii) and (iv) under I.R.C. §§ 6320 and 6330
regarding taxpayers’ rights to appeal lien
or levy actions.
Seizures Requires TIGTA to evaluate the IRS’s
compliance with required procedures Fieldwork currently in process.
I.R.C. § 7803(d)(1)(A)(iv) under I.R.C. §§ 6330 through 6344
when conducting seizures.
Memorandum to IRS; Mar. 2023
TIGTA’s review of taxpayer accounts on
Taxpayer Designations – Illegal Tax An evaluation of the IRS’s compliance both the Individual and Business
Protester Designation and Similar with restrictions under RRA 98 § 3707 Master Files showed that the IRS did
Designations on designation of taxpayers. not reintroduce past Illegal Tax
I.R.C. § 7803(d)(1)(A)(v) Protester codes or similar designations
on taxpayer accounts during the review
period of October 1, 2021 through
June 30, 2022. Since our first review
in FY 1999, when the IRS removed the
Illegal Tax Protester code from the
Master File, TIGTA has not identified
any uses of the code or any other
coding of a similar designation on the
Master File.
Disclosure of Collection Activity With Requires TIGTA to review and certify
Respect to Joint Returns whether the IRS is complying with
I.R.C. § 6103(e)(8), which requires the
I.R.C. § 7803(d)(1)(B) (TIGTA IRS to disclose information to an Fieldwork currently in process.
requirement) individual filing a joint return on
I.R.C. § 6103(e)(8) (IRS collection activity involving the other
requirement) individual filing the return.
Taxpayer Complaints Requires TIGTA to include in each
I.R.C. § 7803(d)(2)(A) Semiannual Report to Congress the
number of taxpayer complaints received Statistical results on the number of
and the number of employee taxpayer complaints received are
misconduct and taxpayer abuse shown on page 29.
allegations received by the IRS or TIGTA
from taxpayers, IRS employees, and
other sources.
October 1, 2022 – March 31, 2023│ 52
Reference to
Explanation of the Provision Comments/TIGTA Audit Status
Statutory Coverage
Administrative or Civil Actions With Requires TIGTA to include information
Respect to the Tax Collection regarding any administrative or civil
Practices Act of 1996 actions with respect to violation of
the fair debt collection provision of Fieldwork currently in process.
I.R.C. § 7803(d)(1)(G) I.R.C. § 6304, including a summary of
I.R.C. § 6304 such actions and any resulting
judgments or awards granted.
RRA 98 § 3466
Denials of Requests for Information Requires TIGTA to include information
regarding improper denial of requests
I.R.C. § 7803(d)(1)(F) for information from the IRS, based on a
I.R.C. § 7803(d)(3)(A) statistically valid sample of the total
number of determinations made by the Fieldwork currently in process.
IRS to deny 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:
Report No. 2023-20-013; Mar. 2023
Requires TIGTA to evaluate the IRS’s Security Reviews:
Adequacy and Security of the
Technology of the IRS adequacy and security of its technology. Report No. 2023-20-002; Nov. 2022
I.R.C. § 7803(d)(1)(D) Report No. 2023-20-018; Mar. 2023
Report No. 2023-10-012; Jan. 2023
TIGTA’s review of the IRS’s purchase
Government Charge Card Abuse Requires TIGTA to report on the IRS’s card program found that controls are
Prevention Act of 2012 progress in implementing purchase and generally effective, and the number of
travel card audit recommendations. purchase card violations identified by
Pub. L. No. 112-194, 126 Stat.
1445 (codified as amended at the IRS Credit Card Services Branch
5 U.S.C. § 5701 note, 10 U.S.C. were minimal and generally for
§ 2784, and 41 § U.S.C. 1909) 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.
October 1, 2022 – March 31, 2023│ 53
Reference to
Explanation of the Provision Comments/TIGTA Audit Status
Statutory Coverage
Report No. 2023-30-005; Dec. 2022
During the second contract negotiation
Fixing America’s Surface Requires TIGTA to perform an process, the IRS did not assign any new
Transportation Act independent biannual assessment accounts to the private collection
of private collection agency agencies for almost nine months. Two
Pub. L. No. 114-94, 129 Stat. 1312 contractors from the first contract were
performance.
(2015) not selected for the second contract, and
payment arrangements that were set up
by these contractors were summarily
cancelled at the end of the first contract,
causing burden to those taxpayers.
Additionally, the Taxpayer First Act
contains adjustments to private collection
agency case inventory intended to protect
certain low-income taxpayers from being
subject to private collection agency
collections. However, TIGTA identified
14,141 taxpayers with new tax years
assigned to the private collection
agencies on or after January 1, 2021,
whose low incomes should have resulted
in the IRS recalling their accounts.
October 1, 2022 – March 31, 2023│ 54
Appendix V
Inspector General Peer Review Activity
This appendix implements § 989C of the Dodd-Frank Wall Street Reform and Consumer
Protection Act. 38
For the period October 1, 2022 – March 31, 2023:
Peer Reviews Conducted of TIGTA by Another Office of Inspector General
• A peer review of TIGTA was not conducted during the reporting period.
Outstanding Recommendations From Peer Reviews of TIGTA
• There are no outstanding recommendations from peer reviews of TIGTA.
Peer Reviews Conducted by TIGTA
• TIGTA did not conduct a peer review during this reporting period.
Outstanding Recommendations From Peer Reviews Conducted by TIGTA
• There are no outstanding recommendations from peer reviews conducted by TIGTA.
38 Pub. L. 111-203, 124 Stat. 1376, 1945-46 (2010) (codified at 5 U.S.C. § 405(a)(8)-(10)).
October 1, 2022 – March 31, 2023│ 55
Appendix VI
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, 2022, through March 31, 2023. Also, data concerning
substantiated RRA 98 § 1203 allegations for the same period are included. See Appendix VII
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:
October 1, 2022 – March 31, 2023│ 56
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) 55 0 9 25 89
REMOVAL AT OPM DIRECTION 0 12 0 0 12
PROBATION/SEPARATION 271 11 0 9 291
SEPARATION OF TEMPORARY EMPLOYEE 0 0 0 0 0
RESIGNATION, RETIREMENT, ETC.
(REASON NOTED ON SF50)
37 0 4 11 52
RESIGNATION, RETIREMENT, ETC. (REASON
90 0 17 24 131
NOT NOTED ON SF50)
SUSPENSION, 14 DAYS OR LESS 72 0 15 23 110
SUSPENSION, MORE THAN 14 DAYS 17 0 6 12 35
INDEFINITE SUSPENSION 4 0 0 0 4
REPRIMAND 74 0 23 29 126
ADMONISHMENT 109 0 102 34 245
WRITTEN COUNSELING 74 9 134 41 258
ORAL COUNSELING 21 0 7 0 28
ALTERNATIVE DISCIPLINE: IN LIEU OF
REPRIMAND
8 0 0 0 8
ALTERNATIVE DISCIPLINE: IN LIEU OF
SUSPENSION
10 0 5 0 15
CLEARANCE LETTER 42 0 9 21 72
CLOSED WITHOUT ACTION CAUTIONARY 37
LETTER
95 115 112 359
CLOSED WITHOUT ACTION LETTER 44 11 25 28 108
TERMINATION FOR ABANDONMENT OF
POSITION
8 0 0 0 8
CASE SUSPENDED PENDING EMPLOYEE 0 0 0 0 0
RETURN TO DUTY
PROSECUTION PENDING FOR TIGTA’S ROI 0 0 0 0 0
CLOSED - SUPPLEMENTAL REQUESTED 0 0 0 0 0
FORWARDED TO TIGTA 23 0 0 0 23
TOTAL 1,054 158 468 294 1,974
Source: ALERTS (extract date: April 1, 2023). Columns containing numbers of three or less and protected by
I.R.C. § 6103 are annotated with a zero and are not reflected in the column and row totals.
October 1, 2022 – March 31, 2023│ 57
Report of Employee Misconduct National Summary
Cases Closed
Cases
Inventory Open Conduct Non- Ending
Conduct Merged
Case Type Inventory Cases Conduct Inventory
Issues With Other
Received Issues
Cases
Administrative
1,106 1,172 1,218 31 6 1,023
Case
Employee
Character 78 212 194 0 0 96
Investigation
Employee Tax
Compliance 645 595 520 21 0 699
Case
TIGTA Report of
380 385 387 0 0 378
Investigation
Total 2,209 2,364 2,319 52 6 2196
Source: ALERTS (extract date: April 5, 2023). Columns containing numbers of three or less and protected by
I.R.C. § 6103 are annotated with a zero and are not reflected in the column and row totals.
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.
October 1, 2022 – March 31, 2023│ 58
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 0 0 0 0 0 0 0
RIGHTS/CONSTRUCTIVE
VIOLATION
1203(b)(4): CONCEALED 0 0 0 0 0 0 0
WORK ERROR
1203(b)(6): 0 0 0 0 0 0 0
I.R.C./IRM/REG VIOLATION-
RETALIATION
1203(b)(8): WILLFUL 12 0 0 0 0 77 89
UNTIMELY RETURN
1203(b)(9): WILLFUL 0 0 0 0 0 33 33
UNDERSTATED TAX
1203(b)(10): THREAT OF 0 0 0 0 0 0 0
AUDIT FOR PERSONAL GAIN
Total 12 0 0 0 0 110 122
Source: ALERTS (extract date: April 1, 2023). Columns containing numbers of three 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, 2022 – March 31, 2023│ 59
Appendix VII
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 regulations, or 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.
October 1, 2022 – March 31, 2023│ 60
Glossary of Acronyms
ACTC Additional Child Tax Credit
ALERTS Automated Labor and Employee Relations Tracking System
CAF Centralized Authorization File
CSED Collection Statute Expiration Dates
CY Calendar Year
ECM Enterprise Case Management
EIN Employer Identification Number
FERDI Federal Employee/Retiree Delinquency Initiative
F.I.C.A. Federal Insurance Contribution Act
FY Fiscal Year
ICS Integrated Collection System
ICT Image Control Team
IRA Inflation Reduction Act of 2022
I.R.C. Internal Revenue Code
IRM Internal Revenue Manual
IRS Internal Revenue Service
ITIN Individual Taxpayer Identification Number
JAMES Joint Audit Management Information System
LEP Limited English Proficient
LIHTC Low Income Housing Tax Credit
NOL Net Operating Loss
OI Office of Investigations
OPI Over-the-Phone Interpreter
OPM U. S. Office of Personnel Management
PDC Private Debt Collection
October 1, 2022 – March 31, 2023│ 61
POA&M Plans of Action and Milestones
PPIA Partial Payment Installment Agreement
PPP Paycheck Protection Program
RAAS Office of Research, Applied Analytics and Statistics (IRS)
RRA 98 Restructuring and Reform Act of 1998
SADI Secure Access Digital Identity
TAC Taxpayer Assistance Center
TAS Taxpayer Advocate Service
TIGTA Treasury Inspector General for Tax Administration
TIN Taxpayer Identification Number
TY Tax Year
U.S.C. United States Code
October 1, 2022 – March 31, 2023│ 62
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OR WRITE:
Treasury Inspector General for Tax Administration
P.O. Box 23291
Washington, DC 20026
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