TIGTA Semiannual Report to Congress, April 1, 2022 through September 30, 2022
Summary
The Semiannual Report to Congress of the Treasury Inspector General for Tax Administration (TIGTA) for April 1, 2022, through September 30, 2022, opening with a message from Inspector General J. Russell George. During the period the Office of Audit completed 39 audits and the Office of Investigations 1,143 investigations, with monetary benefits totaling more than $2.1 billion. The report highlights oversight work on the CARES Act, the Consolidated Appropriations Act of 2021 and the American Rescue Plan Act of 2021, and reports on management challenges such as Modernizing IRS Operations and Human Capital. The message states that the Inflation Reduction Act of 2022 provided TIGTA with $403 million in supplemental funding through September 30, 2031, and the IRS with nearly $80 billion.
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TREASURY INSPECTOR GENERAL FOR
TAX ADMINISTRATION
(TIGTA)
TIGTA’s VISION
Maintain a highly skilled, proactive, and diverse Inspector General organization
dedicated to working in a collaborative environment with key stakeholders to foster
and promote fair tax administration.
TIGTA’s MISSION
Provide quality professional audit, investigative, and inspection and evaluation
services that promote integrity, economy, and efficiency in the administration
of the Nation’s tax system.
TIGTA’s CORE VALUES
Integrity—Maintain the highest professional standards of integrity, personal responsibility,
independence, objectivity, and operational excellence in pursuit of TIGTA’s mission.
Organizational Innovation—Model innovative practices in organizational structure,
operational programs and processes, audit, investigative, and inspection and evaluation
methodologies, and the application of advanced information technology.
Communication—Achieve effective organizational approaches and solutions
by encouraging open, honest, and respectful communication among TIGTA’s executives,
employees, offices, and functions, as well as between TIGTA and its external stakeholders.
Value Employees—Respect the dignity, contributions, and work-life balance of our
employees, and recognize diversity as fundamental to the strength of our organization.
Commitment to Collaboration—Establish and maintain collaborative and professional
relationships with other Government and non-Government stakeholders.
Inspector General’s Message to Congress
In this Semiannual Report to Congress, I am pleased to
summarize the accomplishments of the Treasury Inspector
General for Tax Administration (TIGTA) for the period April 1,
2022, through September 30, 2022. Some of TIGTA’s more
notable achievements related to providing oversight of the
Internal Revenue Service (IRS) and protecting the integrity of
Federal tax administration are highlighted in the various audits,
investigations, and inspections and evaluations summarized in
this report.
During this reporting period, TIGTA’s Office of Audit completed
39 audits, and its Office of Investigations completed 1,143
investigations. TIGTA’s combined audit and investigative efforts
resulted in the recovery, protection, and identification of
monetary benefits totaling more than $2.1 billion.
Highlights of TIGTA’s Work
This report highlights the oversight work that TIGTA has completed with respect to the
Coronavirus Aid, Relief, and Economic Security Act (CARES Act), the Consolidated
Appropriations Act of 2021, and the American Rescue Plan Act of 2021 (ARPA). These
pandemic-relief laws contain numerous tax-related provisions that will continue to impact IRS
operations and Federal tax administration. We share some of the key pandemic-related
audits, investigations, and inspections completed during the reporting period.
Further, we highlight several reports that address TIGTA-identified management and
performance challenges for the IRS, including: Administration of Tax Law Changes; Enhancing
Security of Taxpayer Data and Protection of IRS Resources; Improving Tax Reporting and
Payment Compliance to Reduce the Tax Gap; Modernizing IRS Operations; Increasing
International Tax Compliance; and Human Capital.
Our Office of Investigations remains dedicated to aggressively pursuing, investigating, and
mitigating emerging threats to the IRS’s ability to conduct Federal tax administration. TIGTA
has a long tradition of providing this support to the IRS, including situations where IRS
employees abuse their authority. TIGTA’s Office of Investigations has always investigated illicit
access to Federal taxpayer information, regardless of whether it is an IRS employee or an
unauthorized outside party trying to obtain access.
The Office of Investigations also works with the IRS to detect and prevent scams, such as
those involving the theft of benefits provided by the CARES Act and ARPA programs
administered or supported by the IRS. In addition, TIGTA continues to dedicate resources to
traditional investigative areas and to ever-increasing cyberthreats to the IRS network and
online applications.
April 1, 2022 – September 30, 2022 │3
Supplemental Funding
The Inflation Reduction Act of 2022 (IRA) provided TIGTA with $403 million in supplemental
funding through September 30, 2031. The IRS also received IRA funds of nearly $80 billion.
This is the most significant one-time infusion of funds that TIGTA and the IRS have ever
received.
We look forward to working with Congress, the Administration, the IRS, and other stakeholders
to use this additional funding effectively and efficiently, which benefits Federal tax
administration and taxpayers.
Sincerely,
J. Russell George
Inspector General
4│ April 1, 2022 – September 30, 2022
Table of Contents
Inspector General’s Message to Congress ........................................................................................... 3
TIGTA’s Profile ......................................................................................................................................... 7
Statutory Mandate ....................................................................................................................... 7
Organizational Structure .............................................................................................................. 8
Authorities..................................................................................................................................... 8
Pandemic Relief Oversight Efforts ......................................................................................................... 9
Promote the Economy, Efficiency, and Effectiveness of Tax Administration ...................................... 18
Administration of Tax Law Changes ........................................................................................... 18
Enhancing Security of Taxpayer Data and Protection of IRS Resources ................................. 20
Improving Tax Reporting and Payment Compliance to Reduce the Tax Gap .......................... 24
Modernizing IRS Operations ....................................................................................................... 27
Increasing International Tax Compliance .................................................................................. 28
Human Capital ............................................................................................................................. 29
Protect the Integrity of Tax Administration ............................................................................................ 31
The Performance Model .............................................................................................................. 31
Performance Area: Employee Integrity....................................................................................... 31
Performance Area: Employee and Infrastructure Security ....................................................... 34
Performance Area: External Attempts to Corrupt Tax Administration ...................................... 36
Advance Oversight of America’s Tax System ........................................................................................ 41
Audit Statistical Reports ......................................................................................................................... 44
Reports With Questioned Costs .................................................................................................. 44
Reports With Recommendations That Funds Be Put to Better Use.......................................... 45
Reports With Additional Quantifiable Impact on Tax Administration ........................................ 46
Investigations Statistical Reports .......................................................................................................... 48
Significant Investigative Achievements ...................................................................................... 48
Summary of Investigative Reports and Criminal Referrals ........................................................ 50
Interference .................................................................................................................................. 50
Instances of Whistleblower Retaliation ...................................................................................... 50
Closed Investigations Involving IRS Senior Government Employees ........................................ 51
Inspections and Evaluations Statistical Reports .................................................................................. 52
Evaluation Reports With Significant Unimplemented Corrective Actions ................................. 52
Appendices
Appendix I – Other Statistical Reports .................................................................................................. 53
Reports With Significant Unimplemented Corrective Actions ................................................... 53
Other Statistical Reports .............................................................................................................. 69
Appendix II – Audit Products .................................................................................................................. 70
April 1, 2022 – September 30, 2022 │5
Appendix III – TIGTA’s Statutory Reporting Requirements ................................................................... 74
Appendix IV – Inspector General Peer Review Activity ......................................................................... 81
Appendix V – Data Tables Provided by the Internal Revenue Service ................................................ 82
Internal Revenue Service Memorandum .................................................................................... 82
Report of Employee Misconduct by Disposition Groups ............................................................ 83
Report of Employee Misconduct National Summary ................................................................. 84
Summary of Substantiated I.R.C. Section 1203 Inquiries Recorded in ALERTS...................... 85
Appendix VI – Section 1203 Standards ................................................................................................ 86
Glossary of Acronyms ............................................................................................................................. 87
6│ April 1, 2022 – September 30, 2022
TIGTA’s Profile
The Treasury Inspector General for Tax Administration (TIGTA) provides audit, investigative,
and inspection and evaluation services that promote economy, efficiency, and integrity in
the administration of the Internal Revenue laws. TIGTA provides independent oversight of
matters of the Department of the Treasury (Treasury Department) involving activities of the
Internal Revenue Service (IRS), the IRS Oversight Board, and the IRS Office of Chief Counsel.
Although TIGTA is placed organizationally within the Treasury Department and reports to the
Secretary of the Treasury and to Congress, it functions independently from all other offices
and bureaus within the Treasury Department.
TIGTA oversees all aspects of activity related to the Federal tax system as administered by
the IRS. TIGTA protects the public’s confidence in the tax system by identifying and
recommending strategies for addressing the IRS’s management challenges and
implementing the priorities of the Treasury Department.
TIGTA’s organizational structure (see following page) is comprised of the Office of the
Inspector General and six functional offices: the Office of Audit; the Office of Inspections and
Evaluations; the Office of Investigations; the Office of Mission Support; the Office of
Information Technology; and the Office of Chief Counsel.
April 1, 2022 – September 30, 2022 │7
Organizational Structure
Authorities
TIGTA has all of the authorities granted under the Inspector General Act of 1978, as amended
(Inspector General Act). 1 In addition to the standard authorities granted to Inspectors
General, TIGTA has access to tax information in the performance of its tax administration
responsibilities. TIGTA also reports potential criminal violations directly to the Department of
Justice when TIGTA deems that it is appropriate to do so. TIGTA and the Commissioner of
Internal Revenue (Commissioner or IRS Commissioner) have established policies and
procedures delineating responsibilities to investigate potential criminal offenses under the
Internal Revenue laws. In addition, the IRS Restructuring and Reform Act of 1998 (RRA 98) 2
amended the Inspector General Act to give TIGTA the statutory authority to carry firearms,
execute search and arrest warrants, serve subpoenas and summonses, and make arrests as
set forth in Internal Revenue Code (I.R.C.) Section (§) 7608(b)(2).
1 5 United States Code (U.S.C.). App. (2018).
2 Pub. L. No. 105-206, 112 Stat. 685 (codified as amended in scattered sections of 2, 5, 16, 19, 22, 23, 26, 31,
38, and 49 U.S.C.).
8│ April 1, 2022 – September 30, 2022
Pandemic Relief Oversight Efforts
The Coronavirus Aid, Relief, and Economic Security Act (CARES Act), the Consolidated
Appropriations Act, 2021, and the American Rescue Plan Act of 2021 (ARPA) 3 were enacted
to address the impact of the coronavirus pandemic on the economy, public health, and State
and local governments. 4 These relief packages also contained numerous tax-related
provisions intended to help individuals and businesses. These provisions have had, and will
continue to have, a significant impact on IRS operations and Federal tax administration.
Since the beginning of the pandemic, the IRS has received $3.1 billion in supplemental
funding to plan and execute three rounds of Economic Impact Payments (EIP), expand
multiple tax credits, and modernize and secure IRS systems. As of September 30, 2022,
approximately $309 million of the supplemental funding remains available for the IRS to use
through Fiscal Year (FY) 2023.
The following summaries highlight some of the key pandemic-relief related audits,
investigations, and inspections completed during this six-month reporting period: 5
The Child Tax Credit Update Portal Was Successfully Deployed, but Security and Process
Improvements Are Needed (Report Number 2022-27-028)
On July 15, 2021, the IRS issued the first round of advance Child Tax Credit (CTC) 6 payments
totaling $15 billion to 35 million taxpayers and impacting more than 60 million children. As of
October 30, 2021, the IRS had generated 142.8 million CTC payments totaling $61 billion.
In addition, as part of the CTC Update Portal 7 development, the IRS accelerated the initial
launch of the Secure Access Digital Identity (SADI) system from a small-scale pilot program to
a full-scale production solution that will serve as the next-generation identity proofing solution
to improve taxpayer access to online services.
Implementing the CTC Update Portal and SADI system will improve taxpayer services and the
security of taxpayer data accessed through online applications. This audit was initiated to
assess the IRS’s requirements review process and the development of the CTC Update Portal,
including any impacted or associated systems and applications.
3 Pub. L. 117-2.
4 Pub. L. No. 116-136, 134 Stat. 281 (codified as amended in scattered sections of 2, 5, 12, 15, 20, 21, 29, 42,
and 45 U.S.C.); Pub. L. No. 116-260, 134 Stat. 1182 (2020); and Pub. L. No. 117-2, 135 Stat. 4 (codified in
scattered sections of 7, 12, 15, 19, 20, 26, 29, 42, and 45 U.S.C.).
5
The facts in the summarized investigative case narratives come from court documents of the respective
jurisdictions named.
6 On March 11, 2021, the President signed the American Rescue Plan Act of 2021 into law. This Act created
Internal Revenue Code § 7527A, which requires the Secretary of the Treasury to establish the CTC Advance
Payment Program.
7 The CTC Update Portal would allow taxpayers to elect out of receiving payments related to the advance CTC and
provide information to update factors including a significant change in the taxpayer’s income.
April 1, 2022 – September 30, 2022 │9
TIGTA found that the Enterprise Life Cycle 8 process was generally effective in ensuring that
both the CTC Update Portal and SADI system met accelerated deployment timelines in order
to meet legislative requirements. The Security Risk Management 9 organization took
management action to revise the Milestone Exit Memorandum template to provide explicit
concurrence for systems to operate in the production environment. However, due to a
communication issue, a cloud service provider’s solution was implemented without having an
agency-issued Authorization to Operate. In addition, the IRS appropriately assessed and
implemented the CTC Update Portal’s identity, authenticator, and federated assurance levels.
TIGTA also found that the IRS implemented
Figure 1: CTC Update Portal and SADI System
311 (87 percent) of 356 applicable security Vulnerabilities That Exceeded IRS Policy for
controls for the CTC Update Portal and SADI Remediation
system, but the Privacy, Governmental Liaison,
and Disclosure organization did not have a
formal documented process to manage the
selection, implementation, and assessment of
privacy controls.
Figure 1 notes that the IRS failed to timely
remediate 1,818 critical (356 unique), six high
(all unique), and two medium (all unique)
security vulnerabilities that were identified in
either the CTC Update Portal or SADI system.
In addition, 199 (96 percent) of 207 CTC Source: TIGTA analysis of CTC Update Portal and
Update Portal and SADI system servers were SADI system vulnerabilities as of August 10, 2021.
noncompliant due to either failing a high-
compliance check or having weighted
compliance scores of less than 90 percent.
The IRS stated that the root cause of the remediation findings stemmed from older software
versions being installed during the server build process. Also, an administrative oversight
related to server monitoring resulted in a CTC Update Portal outage for approximately
28 hours.
TIGTA made 10 recommendations that included:
• Ensuring that Enterprise Life Cycle coaches comply with existing agency requirements
related to the independent verification and validation;
• Establishing a validation process so that all required physical, environmental, and
media protection controls are implemented;
• Ensuring that Plans of Action and Milestones are completed timely;
8 The Enterprise Life Cycle is a defined, developed, and institutionalized proven set of best project management
practices for managing change in IRS business processes and systems.
9 The Security Risk Management organization is part of the IRS’s Cybersecurity function.
10 │ April 1, 2022 – September 30, 2022
• Ensuring that IRS systems supported by cloud service providers have an approved
Authorization to Operate prior to deployment;
• Validating that newly built servers meet minimum compliance requirements during the
server build process; and
• Ensuring that formal documentation is created that provides evidence that all privacy
controls were properly selected, implemented, and assessed.
IRS management agreed with all of the recommendations.
Processing of Recovery Rebate Credit Claims During the 2021 Filing Season
(Report Number 2022-46-032)
The IRS correctly calculated the allowable Recovery Rebate Credit (RRC) 10 for 26.1 million
(99.3 percent) of the 26.3 million tax returns that claimed the RRC as of May 27, 2021.
However, TIGTA’s testing identified 181,743 returns for which IRS programming
(11,797 returns), Error Resolution 11 function tax examiner errors (167,130 returns), and
timing issues (2,816 returns) resulted in the incorrect RRC being given to the taxpayer.
In addition, 355,015 potentially ineligible individuals were erroneously issued the RRC. These
included ineligible dependents, nonresidents, and individuals associated with a credit from a
U.S. Territory. TIGTA also identified approximately 10 million potentially eligible individuals
who had not received the RRC as of May 27, 2021. Finally, debit card policies and the
decision to manually verify RRC claims unnecessarily burdened taxpayers and delayed access
to stimulus payments for some taxpayers.
During this review, TIGTA issued 12 alerts about its concerns to the IRS. The IRS implemented
programming changes to address only one alert and agreed to take action on four additional
alerts. TIGTA also made 22 recommendations to the IRS. These recommendations included:
• Taking actions needed to correct erroneous RRC payments;
• Ensuring that eligible individuals receive their credit;
• Notifying individuals who have not filed a tax return or did not claim the RRC of their
potential eligibility;
• Obtaining recurring data in Processing Year 2022 to identify individuals who have not
activated their debit card for the advance ARPA stimulus payment; and
• Establishing processes to reverse these advance payments so that individuals can
receive the RRC on their Tax Year (TY) 2021 tax return.
10 The CARES Act, signed into law on March 27, 2020, created a refundable tax credit, the RRC, of up to $1,200
per eligible adult to be applied toward the taxpayer’s Tax Year 2020 tax liability. In addition, eligible individuals
can receive up to $500 for each child in their family who is under 17 years old.
11 Tax returns with a discrepancy between the RRC claimed by the taxpayer and the RRC computed by the IRS’s
computer program are sent to the Error Resolution function for manual verification.
April 1, 2022 – September 30, 2022 │ 11
IRS management agreed with only eight of the 22 recommendations. Some of the
recommendations that the IRS did not agree to included:
• Reviewing erroneous payments totaling nearly $598 million that were paid to ineligible
individuals as of May 27, 2021;
• Conducting analysis to identify and recover additional erroneous RRC payments issued
after May 27, 2021; and
• Taking action to ensure that the approximately 10 million potentially eligible individuals
that TIGTA identified as of May 27, 2021, received their RRC, or to identify additional
individuals who were eligible for the RRC but did not claim the credit.
The IRS’s Inability to Timely Process Noncorporate Applications for Refund of Net
Operating Losses Under the CARES Act Delayed Taxpayer Refunds and Cost Millions of
Dollars in Additional Interest (Report Number 2022-36-048)
Despite initial actions to promote more efficient processing of applications for tentative
refunds, including the ability to e-fax these applications, the IRS was unable to timely process
the large volume of applications and accumulated a large backlog.
The IRS is statutorily required to process tentative refund
applications within 90 days. However, the number of
Forms 1045, Application for Tentative Refund, considered The IRS needs to take more
overaged (i.e., not processed within 90 days), increased from concrete steps to mitigate
900 in FY 2020 to 7,585 in FY 2021. The cases remaining additional interest and
in ending inventory (i.e., not processed by the end of the costs to taxpayers.
fiscal year) went from 1,626 in FY 2020 to 8,974 in FY 2021.
The overall impact has been negative for taxpayers, whose
potential refunds have been delayed, as well as the Federal Government, which must pay the
accumulated interest due to taxpayers on these delayed refunds.
IRS officials stated that CARES Act changes presented a different compliance risk because
they were generally more favorable to the taxpayer. As such, they believed compliance risk
was not as high as in other areas and made no effort to update examination plans to ensure
that taxpayers complied with the provisions of the CARES Act.
In addition, the IRS did not change the criteria used to identify potentially noncompliant cases
during net operating loss (NOL) 12 processing that would require further scrutiny by the IRS’s
Examination functions. Finally, the IRS did not change the criteria it used to identify
potentially noncompliant cases during NOL processing that would require further scrutiny by
the IRS’s Examination functions despite the large volume of cases and, at times, significant
losses being carried back under the CARES Act.
12 An NOL might occur when a taxpayer’s allowable deductions exceed its gross income for a tax year, resulting in
negative income.
12 │ April 1, 2022 – September 30, 2022
TIGTA recommended that the IRS:
• Devote additional resources to process applications for tentative refunds faster to
reduce the accumulation of interest;
• Complete the evaluation of filing tentative refunds by e-fax;
• Develop contingency plans, specific to the processing of Forms 1045, so that taxpayers
are not adversely affected by a future cessation of operations; and
• Evaluate compliance strategies to determine if they match the risks presented by the
CARES Act.
IRS management agreed with three recommendations and disagreed with the fourth.
Regarding the fourth recommendation, the IRS stated that it had evaluated the risks
associated with changes to the NOL deduction provisions and completed training, publication
of materials, and Internal Revenue Manual (IRM) 13 updates. However, the statute of
limitations for tax returns involving CARES Act NOL provisions will not expire until Calendar
Year (CY) 2024 at the earliest. Therefore, TIGTA maintains it would be prudent for the IRS to
consider the risks associated with CARES Act NOL provisions for TYs 2018 through 2020
returns that the agency examines in coming years.
American Rescue Plan Act: Accuracy of Advance Child Tax Credit Periodic Payments
(Report Number 2022-47-070)
The IRS swiftly implemented the ARPA of 2021 14 related to monthly advance CTC payments,
which was a significant undertaking. The first monthly payments were issued on
July 15, 2021, only four months after legislation was enacted. As of December 2021, the IRS
had issued 216.9 million payments totaling $93.5 billion.
TIGTA’s review of 178.9 million payments made between July and November 2021, totaling
more than $76.7 billion, determined that the IRS correctly sent more than 175.6 million
payments (98 percent) totaling about $75.6 billion. However, 3.3 million payments, totaling
over $1.1 billion, were sent to 1.5 million taxpayers who should not have received the
payment. Further, the IRS did not send 8.3 million payments, totaling about $3.7 billion, to
4.1 million eligible taxpayers.
The IRS developed a reconciliation letter, as required by legislation. The letter identifies
advanced payments received by taxpayers and advises them to use the letter when preparing
their TY 2021 tax return. TIGTA’s review of the 57.1 million reconciliation letters sent to
taxpayers identified only 6,829 letters that were not sent to taxpayers or were sent with an
incorrect amount of advance CTC payments taxpayers received. This was primarily due to the
reversals of advance payments that were not reflected on the reconciliation letters. TIGTA
13 The primary, official source of IRS instructions to staff related to the organization, administration, and
operation of the IRS.
14 Pub. L. 117-2.
April 1, 2022 – September 30, 2022 │ 13
plans to continue monitoring payment reversals that occur after the issuance of the letters in
our review of the reconciliation of CTC payments in Filing Season 2022.
Finally, processes are needed to ensure the validity of bank account information received
from third parties. This review identified 11,459 payments, totaling $4.2 million, were
erroneously sent to 523 bank accounts. The IRS also erroneously updated 1,610 taxpayers’
direct deposit information with bank account information associated with a payroll allotment
account, e.g., a health savings account.
TIGTA made five recommendations that included the need to:
• Prevent taxpayers from receiving additional improper advance CTC payments;
• Inform taxpayers of the possibility that their advance payments may have been sent to
other accounts the taxpayers may own; and
• Validate incoming files from third-party sources prior to their use.
The IRS agreed with all of the recommendations.
Final Report – The IRS Leveraged Its Telework Program to Continue Operations During the
COVID-19 Pandemic (Report Number 2022-IE-R003)
On March 13, 2020, the President declared a national emergency due to the Coronavirus
Disease 2019 (COVID-19) pandemic. Effective March 30, 2020, IRS employees were directed
to evacuate offices and telework if possible. The IRS reopened offices to employees with
nonportable work and mission-critical functions in July 2020.
TIGTA determined that the IRS effectively used its telework program to reduce the impact of
the COVID-19 pandemic on IRS operations.
The COVID-19 pandemic began to have a significant impact on IRS operations in March 2020
when the IRS began closing some offices to protect the health and safety of its employees and
the taxpaying public. During this period, the number of employees who worked any amount of
time at IRS facilities declined by about 51,000 employees, while the number of employees
who teleworked any amount of time increased by about 13,000 employees.
Nearly 35,000 IRS employees were on paid Weather and Safety Leave because they could not
work in IRS facilities or were not prepared to telework. By July 2020, the IRS had reopened
the majority of its facilities to employees with nonportable work or mission-critical functions,
which helped to reduce the number of employees on Weather and Safety Leave.
The telework program had the biggest impact on continuing IRS operations during the
COVID-19 pandemic. As indicated in Figure 2, the IRS steadily increased the number of
teleworkers, which helped to significantly decrease the number of employees on Weather and
Safety Leave and allowed thousands of employees to safely work from alternative locations.
14 │ April 1, 2022 – September 30, 2022
Figure 2: IRS Leveraged Telework Program to Continue Operations During the COVID-19 Pandemic
Source: TIGTA analysis of FY 2020 and FY 2021 Treasury Integrated Management
Information System and Single Entry Time Reporting data.
To increase program participation, the IRS waived the requirement for employees to have an
approved telework agreement and encouraged, but did not require, evacuated teleworkers to
complete telework training. As of March 2022, IRS records indicated that nearly 3,200
evacuated employees charged time to telework without a telework agreement and have not
completed telework training. Employees should complete telework training to ensure that
they are aware of the appropriate policies, procedures, and best practices while teleworking.
Effective May 8, 2022, the IRS planned to allow employees to telework only if they have
completed telework training and have an approved telework agreement.
TIGTA made no recommendations in this report.
Utah Woman Sentenced for Theft of Economic Impact Payment
On June 2, 2022, in the District of Utah, Taylor Ann-Marie Daly was sentenced for aggravated
identity theft. Daly entered a guilty plea on February 23, 2022.
Daly and her co-conspirators stole mail to obtain Personally Identifiable Information (PII),
including driver’s licenses, Social Security cards, checks, debit cards, and credit cards to
obtain funds belonging to other individuals. Daly and her co-conspirators used the PII to forge
checks to obtain funds from financial institutions.
Around May 3, 2020, Daly stole mail, including a U.S. Department of the Treasury EIP check or
stimulus check for $3,900. Daly altered the stolen check and electronically deposited it into
her bank account. Daly also had a picture of the stolen check on her electronic devices and
several photos of alterations to the U.S. Treasury check, including one photo with the
beneficiary's name removed and another with Daly’s name added.
Daly was sentenced to 24 months in prison, three years of supervised release, and ordered to
pay restitution of $3,900.
April 1, 2022 – September 30, 2022 │ 15
Tax Preparer Pleads Guilty After Defrauding Clients and the IRS
On June 23, 2022, in the District of Utah, Grant Walker pled guilty to aiding and assisting in
filing false tax returns.
Beginning around April 8, 2020, and continuing through August 2021, Walker prepared and
submitted false forms to the IRS. Form 7200, Advance Payment of Employer Credits Due to
COVID-19; and Form 941, Employer's Quarterly Federal Tax Return, were submitted. Walker
claimed more than $11 million in Employee Retention Credits (ERC) and sick and family leave
wage credits.
The CARES Act allows businesses to use the ERC to retain employees on their payroll. The
Families First Coronavirus Response Act requires certain employers to provide employees with
paid sick leave of up to 80 hours and expanded family and medical leave of up to 10 weeks
for specified reasons related to COVID-19.
Walker actively solicited single-member, limited liability companies (LLCs) to apply for the
COVID-related tax credits, including the ERC and sick and family leave wages. He also actively
solicited independent contractors involved in door-to-door sales, rideshare drivers, sole
proprietors, and other Form 1099-MISC, Miscellaneous Income, workers to convert their
“businesses” into LLCs, to allow the independent contractors to qualify for COVID-related tax
credits. Walker sought ERC credits for LLCs regardless of whether the LLC was statutorily
eligible to receive the ERC, resulting in false and fraudulent claims.
Additionally, without approval or prior knowledge from his clients, Walker signed his clients’
names on IRS forms seeking COVID-related tax credits. Walker’s employer submitted the
forms and charged each client additional fees for preparing and filing the COVID-related tax
credits.
At sentencing, Walker could receive up to three years in prison, three years of supervised
release, a fine of $250,000, and be ordered to pay $50,000 in restitution.
Kentucky Man Pleads Guilty to Forging Endorsement on a Treasury Check
On May 9, 2022, in the Eastern District of Kentucky, Tony Sparks pled guilty to passing a
forged endorsement signature on a U.S. Treasury EIP check distributed by the IRS. As part of
the CARES Act, qualified individuals were eligible to receive EIP benefits. The IRS required
individuals who had not filed taxes in 2019 to apply for their EIP benefits on the IRS’s website.
In October 2020, an associate of Sparks requested his assistance in completing the online
EIP application on her behalf. She was incarcerated at a county detention center and did not
have regular access to the internet. Sparks and his associate agreed that the EIP check
would be sent to his address, and he would deliver the check to her. Sparks submitted the
online EIP application using the Social Security Number and other identifying information of
his associate. Around October 10, 2020, a U.S. Treasury check in the amount of $1,200
made payable to the associate arrived at the Sparks residence.
16 │ April 1, 2022 – September 30, 2022
Instead of delivering the check to his associate, Sparks cashed the check at a local
convenience store by forging the signature of his associate. Sparks kept the funds and lied to
his associate, telling her that he was still waiting for the check.
In December 2020, additional CARES Act relief legislation was passed, and the associate was
eligible for an additional EIP check for $600. Because of the information supplied in the
original EIP application, this payment was automatically generated from the IRS. In
January 2021, Sparks received the second EIP payment at his residence. He forged his
associate’s signature and cashed the check without her knowledge.
At sentencing, Sparks could receive up to 10 years in prison, up to three years of supervised
release, and a maximum fine of $250,000.
April 1, 2022 – September 30, 2022 │ 17
Promote the Economy, Efficiency, and
Effectiveness of Tax Administration
TIGTA’s Office of Audit (OA) strives to promote the economy, efficiency, and effectiveness of
tax administration. TIGTA provides recommendations to improve IRS systems and operations
and to ensure the fair and equitable treatment of taxpayers. TIGTA’s comprehensive and
independent performance audits of the IRS’s programs and operations primarily address
statutorily mandated reviews and high-risk challenges the IRS faces.
The IRS’s implementation of audit recommendations results in:
• Cost savings;
• Increased or protected revenue;
• Protection of taxpayers’ rights and entitlements; and
• More efficient use of resources.
Each year, TIGTA identifies and addresses the IRS’s major management and performance
challenges. The OA places audit emphasis on statutory coverage required by the RRA 98 and
other laws, as well as areas of concern to Congress, the Secretary of the Treasury, the IRS
Commissioner, and other key stakeholders.
Audit Emphasis Areas for April 2022 Through September 2022
Administration of Tax Law Changes
Enhancing Security of Taxpayer Data and Protection of IRS Resources
Improving Tax Reporting and Payment Compliance to Reduce the Tax Gap
Modernizing IRS Operations
Increasing International Tax Compliance
Human Capital
The following summaries highlight significant audits completed in each area of emphasis
during this six-month reporting period:
Administration of Tax Law Changes
Delays in Management Actions Contribute to the Continued Tax Processing Center
Backlogs (Report Number 2022-46-057)
18 │ April 1, 2022 – September 30, 2022
The IRS continues to have significant inventory backlogs at its Tax Processing Centers. 15
Efforts to reduce these backlogs are hampered, in part, by ongoing substantial hiring
shortfalls of employees needed to fill mission-critical Tax Processing Center positions.
On March 10, 2022, the IRS announced plans to address the backlog of tax returns and other
tax account work during the 2022 Filing Season. These initiatives, referred to as the Get
Healthy Plan, are intended to return the IRS to healthy inventory levels by the end of CY 2022.
The IRS defines “healthy” inventory levels as pre-pandemic inventory levels.
As of December 10, 2021, the Kansas City Tax Processing Center had over
751,000 unprocessed transcript requests, and the Ogden Tax Processing Center
had a little more than 145,000 unprocessed transcript requests. The IRS also had an
imbalance between available staff (70 employees in Kansas City versus 183 employees in
Ogden) and the assigned inventory of unprocessed transcript requests. As of March 2022,
about three months after TIGTA brought this concern to management’s attention, no actions
had been taken to address the significant backlog of transcript requests at the Kansas City
Tax Processing Center.
In addition, the Tax Processing Centers had almost 1.8 million amended individual returns in
inventory as of April 25, 2022. The IRS sent approximately 300,000 amended individual
returns to Accounts Management, which also has a significant backlog of amended individual
returns.
Finally, in a prior report, 16 TIGTA recommended that the IRS ensure that efforts to evaluate
and purchase updated or new mail opening/sorting technology are executed timely. IRS
management agreed, stating that they planned to take the necessary actions. However,
because the procurement action is dependent on funding, management will reevaluate this
effort if implementation is not successful within three years. In March 2022, IRS
management advised us that steps are being taken to conduct market research and complete
a statement of work related to the replacement of the mail processing technology.
TIGTA made nine recommendations to the IRS that included actions to: 1) take immediate
steps to address the imbalance of Tax Processing Center staffing for transcript requests and
2) evaluate alternatives for using employees detailed from the Small Business/Self-Employed
(SB/SE) Division to address the backlog of amended returns in the Submission Processing
function.
The IRS agreed with all nine recommendations.
15 This audit is part of a multiseries review of the IRS’s efforts to reduce these significant backlogs at its Tax
Processing Centers.
16
TIGTA, Report No. 2022-40-015, Plans to Close the Austin Tax Processing Center Should Be Halted Until Hiring
Challenges and Substantial Backlogs at Remaining Centers Are Addressed (Feb. 7, 2022).
April 1, 2022 – September 30, 2022 │ 19
Enhancing Security of Taxpayer Data and Protection of IRS Resources
Taxpayer Digital Communications Platform Security and Access Controls Need to Be
Strengthened (Report Number 2022-20-051)
In an effort to improve customer service and the taxpayer experience, the IRS launched the
Taxpayer Digital Communications (TDC) platform. The TDC platform enables faster
communication and offers taxpayers and their authorized representatives the ability to send
and receive secure electronic messages and documents to and from IRS agents and customer
service representatives.
The eGain Corporation is the dedicated, managed service provider (MSP) for the TDC platform.
The TDC platform and its 12 installations in production are stored on the eGain platform in the
Federal Risk and Authorization Management Program authorized under Amazon Web Services
GovCloud. 17 Production servers on which the TDC platform resides are encrypted to protect
TDC installation data, and configuration settings for password length and complexity are in
compliance with Federal and local requirements.
However, the IRS is not conducting Federal Risk and Authorization Management Program
security reviews for continuous monitoring to ensure that the Amazon Web Services
GovCloud’s security posture remains sufficient for the TDC platform. Two critical and three
high-severity rated antivirus software releases were not installed on the TDC platform. The
platform also used an outdated version of the antivirus software for approximately one year.
TIGTA reviewed 175 security vulnerabilities and determined that the eGain MSP did not timely
remediate four (2.3 percent) critical security vulnerabilities. The remediation time ranged
from 16 to 42 calendar days. In addition, audit trails are not being reviewed.
The TDC platform has 3,939 distinct total users; however, 681 users were not authorized to
access the platform, and 498 users were authorized but did not have access. Of the
3,258 authorized users, 735 users were not timely recertified. Finally, 1,237 user accounts
were not timely disabled, quarantined, or removed due to inactivity, and 646 of these user
accounts were never logged in.
TIGTA’s 11 recommendations included requests for the IRS to ensure that: 1) standard
operating procedures are updated to require continuous monitoring security reviews and that
security reviews are conducted; 2) eGain MSP personnel timely upgrade antivirus software in
accordance with requirements; 3) users are both authorized and have access to the TDC
platform; and 4) a process is developed to timely identify, quarantine, and remove user
accounts for inactivity in accordance with requirements.
The IRS agreed with all 11 recommendations.
17 The Federal Risk and Authorization Management Program is a U.S. Federal Governmentwide program that
provides a standardized approach to security assessments, authorizations, and continuous monitoring for cloud
products and services. According to the Taxpayer Digital Communications Overview, the eGain platform provides
a wide range of capabilities that directly support the Taxpayer First Act of 2019.
20 │ April 1, 2022 – September 30, 2022
Cloud Services Were Implemented Without Key Security Controls, Placing Taxpayer Data at
Risk (Report Number 2022-20-052)
Governmentwide mandates required Federal agencies to expand the use of shared services to
enable broader use and adoption of cloud computing. Cloud computing is defined as the
delivery of computing services (e.g., servers, storage, databases, networking, software,
analytics, and intelligence) over the internet to offer faster innovation, flexible resources, and
economies of scale.
Control weaknesses over cloud computing services can pose a substantial risk to taxpayer
records currently residing on these services. Potential harms include breaches, unauthorized
access, and disclosure of taxpayer information. This audit was initiated to evaluate the
effectiveness of controls to protect taxpayer data on cloud computing services.
To facilitate and guide cloud security implementation efforts, the IRS developed its Cloud
Security Reference Architecture in September 2019 and the Cybersecurity Cloud Operations
Framework in November 2019. The IRS issued its updated Cloud Strategy and a cloud
security-specific IRM in March 2021 and September 2021, respectively.
By the end of CY 2020, the IRS had fully implemented 56 cloud services, 12 of which
contained taxpayer data. The IRS deployed these cloud services without fully implemented
security controls for protecting the data.
Encryption is a key control for protecting taxpayer data on IRS cloud services. The IRS has
continued cloud deployments, despite not having a fully implemented security control
infrastructure in place.
TIGTA recommended that the IRS:
• Expedite full implementation of the cloud security control infrastructure; and
• 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 IRS partially agreed with the first recommendation, stating that it has a robust and
comprehensive security control infrastructure documented within the IRMs for cloud
implementations. The IRS also stated that it will continue to ensure compliance with the
documented cloud security control infrastructure, even though it has not fully implemented
key security controls as outlined in this report. IRS management agreed with the second
recommendation.
April 1, 2022 – September 30, 2022 │ 21
Improvements Are Needed for an Effective User Behavior Analytics Capability
(Report Number 2022-20-055)
An insider threat is defined as an employee or contractor who has authorized access to an
organization’s network, systems, or data and could intentionally misuse that access to have a
negative effect on information or information systems. The IRS implemented its insider threat
capability, renamed the User Behavior Analytics Capability (UBAC), 18 to detect and mitigate
risks to data and systems arising from insider threats.
TIGTA found that the IRS did not have a
complete inventory of systems to
monitor for the UBAC. The UBAC list of
systems that store or process Federal
Tax Information and PII is missing
234 (67 percent) of the 351 systems
included in the Enterprise Security Audit
Trails 19 list.
Systems not included in the UBAC list are not subject to user behavior analysis. While the
UBAC team has been developing analytics and an inventory of systems for analysis, they have
not coordinated with the Enterprise Security Audit Trails team to ensure that they have all the
correct systems in place.
The UBAC team is experiencing delays receiving access to systems with information to
improve analytics. For example, the UBAC team requested access to the Human Resources
Connect System and is waiting on approval. Data from this system will allow the UBAC team
to incorporate 16 risk indicators into the UBAC.
TIGTA determined that UBAC analysts performed appropriate reviews of the incidents of
potential insider threats, documented the reviews in the anomaly report, and either escalated
the incidents as necessary or closed the incidents if the analysts determined the risks of
insider threats were low.
TIGTA also reviewed UBAC Anomaly Reports for 229 incidents and found that 109
(48 percent) of the incidents were forwarded to the TIGTA Office of Investigations for review
and possible investigation. Further, TIGTA determined that there is no formal process to
document feedback from stakeholders on referred incidents. The IRS recorded feedback in
anomaly reports for only three (3 percent) of the 109 incidents.
18 The UBAC was deployed to detect, report, and mitigate risks to data and systems arising from insider threats.
19 In March 2020, the IRS established the Enterprise Security Audit Trails Project Management Office within the
Information Technology organization’s Cybersecurity function. The office’s mission is to protect Sensitive But
Unclassified data, including taxpayer information and IRS electronic systems, service, and data from internal and
external cybersecurity-related threats by incorporating security practices in planning, implementation, risk
management, and operations.
22 │ April 1, 2022 – September 30, 2022
TIGTA recommended that the IRS ensure that the UBAC team:
• Coordinates with the Enterprise Security Audit Trails Project Management Office to
identify and update the inventory of all systems on a regular basis and subject the
systems to user behavior analysis; and
• Implements a process to document feedback from stakeholders on referred incidents.
The IRS agreed with the recommendations.
The Process for Tracking Physical Security Weaknesses Identified in IRS Facilities Does
Not Ensure That Vulnerabilities Are Properly Addressed
(Report Number 2022-10-046)
As the Nation’s tax collection agency, the IRS is often the target of threats from individuals
and organizations. To safeguard the security and safety of IRS personnel, facilities, and
assets, the agency develops and implements physical security policies, procedures, and
processes to mitigate both current and emerging threats.
This audit was initiated to determine whether the IRS’s process for implementing
countermeasures recommended in facility security risk assessments ensures that:
1) identified security vulnerabilities are addressed or 2) risk acceptance is adequately
documented when countermeasures are not implemented.
The IRS manages 532 locations throughout the United States. It is important for the IRS to
track the status of countermeasures at these locations to ensure that known security
vulnerabilities are mitigated. Without effective management and documentation of the
countermeasure tracking and approval process for known security vulnerabilities, IRS
employees and facilities may be at increased risk.
The IRS updated security countermeasure procedures; however, the new process did not
ensure that minimum physical security countermeasures were tracked and considered.
The IRS’s process for documenting the tracking and monitoring of recommended
countermeasures was not effective because the IRS does not consistently use a centralized
system to track physical security countermeasure recommendations, approvals,
implementation actions, and associated costs.
Furthermore, physical security specialists did not consistently and clearly document when a
request for risk acceptance was made or have a defined process to reject a recommended
countermeasure. Without a process that requires physical security specialists to document
their rationale and obtain approval for rejecting a recommended countermeasure, physical
security specialists may choose not to implement a countermeasure required per Interagency
Security Committee 20 standards.
20 The Interagency Security Committee (ISC) was established in October 1995. The ISC, chaired by the
Department of Homeland Security, consists of 64 departments and agencies. The ISC has a mission to develop
security policies, standards, and recommendations for nonmilitary Federal facilities in the United States.
April 1, 2022 – September 30, 2022 │ 23
TIGTA recommended that the IRS:
• Ensure that countermeasure recommendations, approvals or denials, implementation
decisions and actions, risk acceptance decisions, and the associated cost of
implementation are adequately tracked and maintained in a central location;
• Update the policies and procedures for any changes related to the tracking of
countermeasures identified in a Facility Security Assessment or Facility Security
Assessment Addendum 21 and provide formalized training to the physical security
specialists;
• Ensure that all recommended countermeasures from the most recent risk assessment
are tracked until a new risk assessment is completed using the new countermeasure
tracking mechanism; and
• Ensure that the countermeasure tracking mechanism requires physical security
specialists to document the reason and obtain approval for rejecting a recommended
countermeasure.
IRS management agreed with all of the recommendations.
Improving Tax Reporting and Payment Compliance to Reduce the Tax Gap
Compliance Efforts Are Needed to Address Refund Claims Reported on Form 1139 That
Are Based on the CARES Act Net Operating Loss Carryback Provisions
(Report Number 2022-35-049)
During the period March 27, 2020, to March 31, 2021, TIGTA noted that 17,537 taxpayers
submitted Form 1139, Corporation Application for Tentative Refund, involving carrybacks to
cover 19,262 loss tax years. The IRS issued a total of $17.4 billion in tentative refunds to
12,119 of these taxpayers. Despite the large volume of Forms 1139 submitted, the business
tax returns selected for examination represent a relatively low percentage of net operating
loss tax years claimed on the Form 1139.
From March 27, 2020, through July 26, 2021, the SB/SE Division selected a total of
12,760 Forms 1120, U.S. Corporation Income Tax Return, for examination. Of these, 36 (less
than 0.30 percent) involved a loss year claimed on the Form 1139. Similarly, the Large
Business and International (LB&I) Division selected a total of 5,214 Forms 1120 for
examination and 406 (7.8 percent) involved a loss year claimed on the Form 1139.
TIGTA reviewed eight Form 1120 examinations that the SB/SE Division closed and found that
the IRS examinations resulted in return adjustments on five cases (62.5 percent), which
21 The IRS uses the Facility Security Assessment report as the foundation for its Facility Security Assessment
Addendum. The Facility Security Assessment Addendum includes requirements specific to the Department of the
Treasury and the IRS, related findings, and cost estimates for any needed security enhancements to the facilities
being assessed. Along with the Facility Security Assessment, the Facility Security Assessment Addendum serves
as the official IRS risk assessment for each IRS facility.
24 │ April 1, 2022 – September 30, 2022
reduced the net operating loss that was carried back. Per the net operating loss provisions,
I.R.C. § 172, part of the tentative refunds issued in the five cases should have been
recaptured. The examiner did not always take steps to recapture the tentative refund issued
to the taxpayer. TIGTA performed similar reviews of LB&I Division examination cases and did
not find any exceptions.
After TIGTA shared these observations with the SB/SE Division, management took immediate
corrective actions to update the examination guidance for both the SB/SE and LB&I Divisions.
The IRS is in the process of taking steps to recover the excess tentative refunds issued.
TIGTA recommended that the IRS:
• Track and monitor examination results for the 25 open examinations of Forms 1120
with reported net operating losses and an associated Form 1139 presented in this
report (excluding Joint Committee Refund Cases 22);
• Use the examination results from Recommendation 1 to assess whether to increase
the number of examinations of Forms 1120 with reported net operating losses and an
associated Form 1139; and
• Review examination results and computations of proposed net operating loss
adjustments for the 25 open examinations presented in this report (excluding Joint
Committee Refund Cases) to determine whether interim guidance for net operating
losses is being properly followed.
IRS management agreed with all of the recommendations.
Reliance on Self-Certifications Resulted in Federal Agencies Awarding Contracts and
Grants to Entities With Delinquent Federal Taxes; However, the IRS Is Making Progress on
Establishing the Federal Contractor Tax Check System (Report Number 2022-10-066)
Federal agencies across the Government awarded contracts and grants to entities that owed
millions in delinquent Federal taxes. Between October 2018 and December 2019, the
Federal Government awarded 2.1 million Federal contracts and grants to more than
83,000 awardees. Of these, 3,040 contractors received almost $10.2 billion in Federal
contracts while owing $621.8 million in delinquent Federal taxes. In addition, 938 grantees
received $22.7 billion in Federal grants while owing $269.2 million in delinquent Federal
taxes.
In addition, such entities frequently did not self-certify their Federal tax status accurately, as
required, prior to receiving contracts or grants. Specifically, 66 (93 percent) of 71 contractors
selected in TIGTA’s judgmental sample certified in the System for Award Management
22 The IRS must review a refund or credit of more than $2 million ($5 million for C corporations) and provide a
report to the Joint Committee on Taxation, i.e., referred to here as Joint Committee Refund Cases.
April 1, 2022 – September 30, 2022 │ 25
(SAM.gov) 23 that they did not owe, or had not yet been notified of, delinquent Federal taxes
when IRS systems indicated a Federal tax debt was present.
The IRS did, however, make some progress establishing an application called the Federal
Contractor Tax Check System. The system allows prospective contractors and grantees to
request a certificate from the IRS stating that they did or did not owe seriously delinquent
taxes. The IRS designed a technical solution to build the Federal Contractor Tax Check
System and planned a foundational release in November 2022.
TIGTA recommended that the IRS continue to prioritize the development of the Federal
Contractor Tax Check System. The IRS agreed with this recommendation.
Review of the IRS’s Enforcement Program for Tax-Exempt Organizations That Participate in
Illegal or Nonexempt Activities (Report Number 2022-10-064)
The IRS’s Exempt Organizations and Government Entities (EO) function 24 is responsible for
oversight of tax-exempt organizations. If the IRS does not identify potential illegal or
fraudulent activities by tax-exempt organizations, unscrupulous individuals could take
advantage of this preferred tax status to commit crimes. This could diminish public trust in
legitimate tax-exempt organizations.
TIGTA found that both the IRS and State charity regulators are limited by their respective laws
and procedures for coordinating with each other as a means to identify tax-exempt
organizations potentially engaging in illegal or other nonexempt activities. Currently, no State
Attorneys General Offices have formal disclosure agreements with the IRS.
TIGTA identified 3,726 closed EO function referrals that allege potential fraudulent or illegal
activities during FYs 2018 through 2020. For these referrals, classifiers inaccurately recorded
the results for 42 cases on the referral database. In addition, of the 15,522 unique referral
cases closed during FYs 2018 through 2020, TIGTA’s analysis identified 980 closed cases for
which two referral database fields had conflicting information about the final dispositions of
the referrals. TIGTA also determined that 2,934 data fields were missing required information
because referral database system controls do not require these fields to be completed prior to
the case closing.
TIGTA reviewed two judgmental samples consisting of 46 referral cases closed between
FYs 2018 and 2020. The cases alleged potentially fraudulent or illegal activities and were
reviewed to determine whether the IRS’s assessments of the referrals were sufficiently
researched and properly documented. All 46 referral cases sampled were sufficiently
23 The General Services Administration operates and manages the online System for Award Management, which
is the official U.S. Government website for those that make, receive, or manage Federal awards as well as for
public users searching for Government business information.
24 According to the EO function, its mission is to provide customers with top-quality service, help customers
understand and comply with applicable tax laws, and protect the public interest by applying the tax law with
integrity and fairness to all.
26 │ April 1, 2022 – September 30, 2022
researched. However, five of the 46 referrals did not have sufficient documentation to justify
the decision to not pursue an examination.
TIGTA recommended that the IRS:
• Ensure that Classification managers periodically emphasize to classifiers the
importance of including supporting documentation in the case files for selecting or not
selecting referrals for examination;
• Implement referral database system controls to ensure that complete and accurate
data is input into the database; and
• Review the fields on the referral database and determine if any may be eliminated to
avoid confusion, conflicting information in similar fields, and redundancy.
The IRS agreed with all of the recommendations.
Modernizing IRS Operations
A Service-Wide Strategy Is Needed to Address Challenges Limiting Growth in Business Tax
Return Electronic Filing (Report Number 2022-40-036)
The IRS continues to receive large volumes of paper-filed tax and information returns,
resulting in significant costs to process each year. In FY 2020, the IRS spent more than
$226 million to process paper-filed tax returns.
E-filing provides benefits to taxpayers, including upfront validations, greater tax return
accuracy, and secure and confidential submission of highly personal tax return information.
The IRS has taken a number of actions and developed initiatives in an effort to increase
e-filing. Furthermore, legislative requirements have resulted and will continue to result in
increased e-filing.
The backlogs of paper tax and information returns to be processed, along with the inability to
ship paper tax returns and/or retrieve paper tax returns from Federal Records Centers due to
the pandemic, demonstrate the need for the IRS to develop a service-wide strategy to further
increase e-filing. However, the IRS does not have a service-wide strategy that identifies,
prioritizes, and provides a timeline for the addition of tax forms for e-filing. The agency also
does not have an accurate and comprehensive list of tax forms that are not available to e-file.
Since 2014, the overall percentage of business tax returns e-filed increased from 41 percent
to 63 percent. Employment tax returns continue to provide the most significant opportunity
for growth in business e-filing. The IRS has yet to establish processes and procedures to
identify and address corporate, employer, and Heavy Highway Vehicle Use Tax filers that do
not comply with e-file mandates. TIGTA’s analysis of tax return filings identified 15,108 filers
that paper-filed 22,569 TY 2018 returns that were required to be e-filed. TIGTA estimated
that the processing of these returns cost the IRS $30,196 in comparison to the $3,405 to
process the required e-filed tax returns.
April 1, 2022 – September 30, 2022 │ 27
As a result, TIGTA recommended that the IRS develop:
• A service-wide strategy to prioritize and incorporate all forms for e-filing;
• Processes and procedures to identify and address potentially noncompliant corporate
filers; and
• Processes and procedures to ensure that penalties are consistently assessed against
business filers that are noncompliant with e-filing requirements.
The IRS agreed with the first recommendation to develop a service-wide strategy to
incorporate all forms for e-filing, but did not agree to the other two recommendations. IRS
management stated they did not need to develop processes and procedures to identify
noncompliant corporate filers because all requirements needed to assess penalties are not
known at the time of filing. The IRS also has systemic processes in place for e-filed
partnership returns, which were found to be working as intended. Other types of business
returns have differing criteria for e-filing requirements and exceptions to the requirements,
which prevented the implementation of a standard process for all business filers.
However, TIGTA believes that IRS management’s justification for taking no action on these two
recommendations was insufficient. In view of the backlogs of paper-filed tax returns, the IRS
should take additional steps to continue reducing paper return filings.
Increasing International Tax Compliance
Additional Actions Are Needed to Ensure Taxpayer Compliance With the Section 965
Repatriation Tax (Report Number 2022-34-062)
On December 22, 2017, the Tax Cuts and Jobs Act 25 was enacted and provided for a one-time
deemed repatriation tax on U.S. shareholders of specified foreign corporations set forth under
I.R.C. § 965.
The Joint Committee on Taxation estimated that for FYs 2018 through 2027 this provision
would generate revenue for the U.S. Government of $338.8 billion. This estimate was not
based solely on the payment of the Section 965 repatriation tax and contained other revenue
generating impacts, such as the increase in qualified dividends paid by businesses that would
also result in increased tax revenue.
According to the IRS, multiple issues, including complex payment deferral procedures, have
limited the agency’s ability to compile accurate Section 965 data. The LB&I Division, which is
responsible for ensuring that taxpayers comply with the Section 965 tax, initiated three
compliance campaigns to address individual and business taxpayer compliance. The two
ongoing campaigns have resulted in taxpayers filing amended returns reporting the tax and
significant changes to the Section 965 tax calculation. However, TIGTA is concerned that the
25
Pub. L. No. 115-97, 131 Stat. 2054.
28 │ April 1, 2022 – September 30, 2022
campaign focused on the compliance of individuals does not plan any follow-up actions with
taxpayers who did not respond to the soft letters. 26
The Section 965 repatriation tax can be paid in eight installments. Some installment
payments were applied to incorrect tax periods, which could result in the taxpayer being
identified as not compliant. Numerous payments were miscoded as Section 965 payments,
impacting the IRS’s ability to determine Section 965 revenue. Also, the IRS does not have the
ability to systemically identify taxpayers not compliant with the required installment payments
or S Corporation shareholders who failed to annually report their deferred liability on the
Form 965-A, Individual Report of Net 965 Tax Liability.
TIGTA recommended that the IRS:
• Prioritize and follow up with compliance actions on nonresponsive taxpayers issued
soft letters;
• Revise notices to add more information on how the Section 965 installment payments
should be made;
• Ensure that system changes identify Section 965 payments that were potentially
processed incorrectly;
• Develop procedures to systemically identify taxpayers that are not compliant with the
Section 965(h) deferral requirements; and
• Develop procedures to identify S Corporation shareholders who made an election
under Section 965(i) and did not annually submit the Form 965-A or did not report the
correct amount of the Section 965 deferral on the Form 965-A.
The IRS agreed or partially agreed with four of the five recommendations.
Human Capital
Fingerprinting and Employment Eligibility Verification Delays Due to the COVID-19
Pandemic May Increase Taxpayer Data Exposure Risks
(Report Number 2022-16-039)
Although the IRS has made progress reducing the number of new employees hired during the
COVID-19 pandemic without identity documents inspected or getting fingerprinted, the delays
put the IRS at risk of potential exposure of taxpayer data.
Temporary Federal guidance allowed the IRS to defer physical inspection of employment
eligibility documents for new employees. As of January 2022, IRS records showed that
approximately 1,900 individuals hired from March 23, 2020, through July 17, 2021, were
26
A soft letter is directed at a particular filing position that a taxpayer takes and seeks information or suggests a
course of action. Soft letters are not necessarily followed up by an IRS compliance action, such as an
examination.
April 1, 2022 – September 30, 2022 │ 29
listed as not yet having employment eligibility documents physically inspected. Of the 1,900
individuals, over 1,200 started working in CY 2020.
As of August 2021, the IRS’s Form I-9 SharePoint site
did not accurately reflect whether hiring officials Several employees hired in
completed the physical inspection of new employees’ CY 2020 did not have a date of
Form I-9, Employment Eligibility Verification, identity physical inspection for their
documents. TIGTA judgmentally selected and reviewed
employment eligibility documents.
38 records from the Form I-9 SharePoint site for which
there was no indication that hiring officials had
physically inspected new employees’ verifying
documents. The review found that five of the forms had hiring official notations indicating a
physical inspection of the documents had taken place, even though the Form I-9 SharePoint
site was not updated to reflect that physical inspection.
Temporary Federal guidance also allowed deferred fingerprints for some employees.
Approximately one-quarter of the individuals who were hired from March 23, 2020, through
July 17, 2021, filled positions that qualified for the fingerprint deferral. As of January 2022,
IRS records showed that 113 individuals had not been fingerprinted, 29 of whom started
working in CY 2020.
Further, there were 11 individuals who were hired, worked for the IRS between eight and 371
calendar days, and then separated from the IRS without ever having their identity documents
physically inspected. Therefore, the IRS hired individuals to fill positions, the majority of which
had access to taxpayer data, yet the agency never verified whether those individuals were
eligible for Federal employment in the United States.
TIGTA recommended that the IRS conduct periodic reviews of the Form I-9 SharePoint site and
provide periodic reminders to hiring officials responsible for completing Forms I-9 to
determine whether the forms are still pending physical inspection and update the records
based on the results of that review. TIGTA also recommended that the IRS ensure that the
Form I-9 SharePoint site is a complete and accurate representation of the status of the
deferred physical inspections.
IRS management agreed with the recommendations.
30 │ April 1, 2022 – September 30, 2022
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 these serious offenses and refers them to IRS management when they
involve IRS employee misconduct. When appropriate, TIGTA also refers its investigations to
the U.S. Department of Justice or to State authorities for prosecution.
Performance Area: Employee Integrity
In order for the country’s tax system to operate successfully, taxpayers must have confidence
in the fair and impartial administration of Federal tax laws and regulations. IRS employee
misconduct can erode the public’s trust and impede the IRS’s ability to effectively enforce
tax laws. Employee misconduct can take many forms, such as: the misuse of IRS resources
or authority; theft; fraud; extortion; taxpayer abuse; unauthorized access to, and disclosure of,
tax returns and return information; and identity theft.
April 1, 2022 – September 30, 2022 │ 31
During this reporting period, employee integrity
investigations accounted for 37 percent of OI’s
work. OI conducted 366 employee misconduct
investigations that were referred to the IRS for
action. The IRS took action on 337 and closed 37%
29 investigations without action. 27 of OI’s work
was employee
As part of its employee integrity focus, TIGTA integrity
also conducts proactive investigative initiatives investigations
to detect misconduct in the administration of
IRS programs. During this reporting period,
TIGTA initiated eight 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: 28
IRS Employee Pleads Guilty to Wire Fraud in Scheme to Receive Fraudulent CARES Act
Loans
On July 27, 2022, in the Western District of Tennessee, Tina Humes pled guilty to a charge of
wire fraud. She perpetrated a scheme and received over $100,000 from fraudulent
applications for the CARES Act, the Paycheck Protection Program (PPP), and the Economic
Injury Disaster Loan (EIDL) pandemic loans.
Between May 2020 and February 2021, Humes, an IRS Lead Management and Program
Assistant, submitted fraudulent PPP and EIDL applications for the business “Tina Humes.”
In the applications, Humes certified that the funds would be used to retain workers, maintain
payroll, and support other permissible expenses. Humes also submitted IRS Schedule Cs,
Profit or Loss from Business, falsely representing that she received income from the business.
Based on the fraudulent PPP and EIDL applications, Humes obtained at least $123,612 in
loan benefits. Humes used loan proceeds for unauthorized personal items and expenditures,
including jewelry and trips to Las Vegas.
At sentencing, Humes could receive up to 20 years in prison.
27 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.
28 Facts in the summarized case narratives come from court documents of the jurisdiction named.
32 │ April 1, 2022 – September 30, 2022
Former IRS Employee Arrested on Three Counts of Wire Fraud
On July 6, 2022, in the Western District of Tennessee, former IRS Employee Courtney
Westmoreland was arrested on three counts of wire fraud for her role in a scheme to defraud
the U.S. Government through fraudulent EIDL applications and fraudulent State
unemployment insurance claims.
Westmoreland was an IRS contact representative in the Wage and Investment Service Centers
Department from approximately October 2020 to October 2021. Beginning around June
2020 and continuing through February 2021, Westmoreland devised a scheme to defraud the
Small Business Administration to obtain money and property by means of false and fraudulent
pretenses. She accomplished this by creating and submitting fraudulent loan applications on
behalf of herself and her purported company “Court Closet Connection.”
In the applications, Westmoreland falsely represented that her company had operated since
January 2018, employed four people, and had earned gross receipts of $5,000 per month. In
total, Westmoreland sought approximately $32,500 and obtained at least $11,500 in EIDL
payments.
Additionally, beginning in October 2020 and continuing through July 2021, while employed at
the IRS, Westmoreland falsely sought unemployment benefits from the State of Tennessee.
Prior to her employment at the IRS, Westmoreland received unemployment benefits. While
employed at the IRS, Westmoreland continued submitting fraudulent certifications to the
Tennessee Department of Labor, claiming that she was still unemployed and not earning any
wages. In total, Westmoreland received approximately $16,000 through fraudulent
unemployment insurance certifications.
If convicted, Westmoreland could receive up to 20 years in prison, up to three years of
supervised release, and a maximum fine of $250,000.
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: 29
IRS Employee Unlawfully Accessed Taxpayers’ Return Information
On May 19, 2022, in the Eastern District of California, information was filed against IRS
employee Paula Salcedo for unauthorized inspection of returns or return information. IRS
employees are authorized to access only those accounts required to accomplish their official
duties. Annually, employees certify they understand IRS procedures that restrict access to
taxpayer accounts for personal interest. Salcedo completed mandatory unauthorized
awareness certifications in May 2017 and May 2018.
29 Facts in the summarized case narrative come from court documents of the jurisdiction named.
April 1, 2022 – September 30, 2022 │ 33
On March 14, 2019, Salcedo attempted to conduct a search of her son’s father’s account,
with whom she had an ongoing child custody dispute; however, she accessed information of
another individual with the same name. Beginning on or about July 18, 2019, Salcedo
accessed Federal tax information of six individuals she knew personally, as well as the
information of their dependents, spouses, and parents. In total, Salcedo made unauthorized
accesses to IRS records pertaining to the tax filing history, wage, and income reports of 72
people.
If convicted, Salcedo could receive up to one year in prison and a fine up to $100,000.
Performance Area: Employee and Infrastructure Security
Threats and assaults directed at IRS employees, facilities, and
infrastructure impede the effective and safe administration of the
Federal tax system and the IRS’s ability to collect tax revenue. OI
receives referrals of all reports of threats, assaults, and forcible
interference against IRS employees in the course of performing their
official duties. TIGTA also actively pursues, investigates, and
mitigates emerging threats to the IRS’s ability to conduct Federal tax
administration in cyberspace.
Contact with the IRS can be stressful and emotional for taxpayers. While the majority of
taxpayer contacts are routine, some may become confrontational and even violent. TIGTA’s
special agents are statutorily mandated to provide physical security, known as “armed
escorts,” to IRS employees who have face-to-face contact with taxpayers who may pose a
danger to the employee, and to ensure that IRS employees have a secure environment in
which to perform their critical functions of tax administration. During this six-month reporting
period, OI provided 17 armed escorts for IRS employees.
OI undertakes investigative initiatives to identify individuals who could commit violence
against, or otherwise pose a threat to, IRS employees, facilities, or infrastructure. OI also
provides intelligence to IRS officials to assist them in making proactive operational decisions
about potential violence or other activities that could pose a threat to IRS systems, operations,
and employees.
Investigative information sharing between OI and the IRS’s Office of Employee Protection to
identify “potentially dangerous” taxpayers is one example of TIGTA’s commitment to protecting
IRS employees. Taxpayers who meet certain IRS criteria receive a 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.
34 │ April 1, 2022 – September 30, 2022
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 37%
ensure the safety of IRS employees during the of OI’s work was
reporting period: 30 investigations of
threats/assaults
Man Receives Five-Year Prison Sentence for
Retaliating Against an IRS Employee
On April 4, 2022, in the Southern District of
West Virginia, Jeffrey Reed was sentenced for retaliating against a Federal law enforcement
officer by filing a fraudulent lien and attempting to interfere with the administration of IRS
laws.
An IRS revenue officer was assigned to collect over $329,950 from Reed in tax delinquency
and liability for years 1995 through 2013. About January 14, 2015, the revenue officer met
with Reed’s employer to establish garnishment of his wages. In response, about May 12,
2015, Reed filed, in a public record with the Mercer County Clerk for West Virginia, a false lien
and encumbrance against the real and personal property of his employer and the revenue
officer for $4.95 million. Reed also claimed that the revenue officer owed him an additional
$9 million because of the copyright for his name. The lien also claimed 165 constitutional
violations, to include illegal search and seizure, war, treason, and slavery.
Reed was sentenced to five years in prison, three years of supervised release, and ordered to
pay a $200 special assessment fee.
Georgia Man Sentenced for Bomb Threat Against IRS Office in New York City
On August 11, 2022, in the Southern District of Georgia, Benjamin Stasko was sentenced for
the interstate transmission of a threat to injure. He threatened to bomb an IRS office located
in New York City.
On July 6, 2020, Stasko posted a bomb threat on a public website. In his posting, Stasko
claimed that a “highly explosive pipe bomb,” intended for the IRS, was placed inside a Federal
building located in New York City. Law enforcement officers and bomb-sniffing canines
responded to the Federal building but did not locate an explosive device. Subsequent
investigative efforts by TIGTA special agents identified Stasko as the person responsible for
posting the threat. The investigation also revealed that Stasko had items at his residence
believed to be the beginnings of a pipe bomb, along with notes explaining how he would blow
up the IRS building.
Stasko was sentenced to time served (21 months) and three years of supervised release.
30 Facts in the summarized case narratives come from court documents of the respective jurisdictions named.
April 1, 2022 – September 30, 2022 │ 35
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; offer bribes
to IRS employees to influence their tax
cases; commit fraud in contracts the IRS
awards to contractors; or commit
cybercrimes. In addition, unscrupulous
tax preparers can impede tax 26%
administration by including errors or of OI’s work was
false information on a customer’s return. investigating attempts
to corrupt or impede
tax administration
During this reporting period,
investigations into attempts to corrupt or
impede tax administration accounted for
26 percent of OI’s work.
The following cases represent OI’s
efforts in this area during the reporting period: 31
Fighting Cybercrime
Four Maryland Individuals Charged With Bank Fraud Using the IRS’s Modernized Internet
Employer Identification Number
On July 7, 2022, Victor Ojo, Raissa Kaossele, Jamelia Thompson, and Damilola Ojo were
charged in the District of Maryland with conspiracy to commit bank fraud and aggravated
identity theft. They used Employer Identification Numbers (EINs) obtained from the IRS in the
scheme to defraud.
The co-conspirators used stolen PII to create, or cause to be created, EINs through the IRS’s
Modernized Internet Employer Identification Number (Mod IEIN) system. The Mod IEIN is the
IRS’s system that allows users to register for a unique EIN and requires the users to enter the
valid name and Social Security Number of a real living person in order to obtain an EIN for a
business. These EINs were used in conjunction with fraudulently obtained State business
certificates to open bank accounts for the purpose of depositing stolen and/or altered checks
or receiving fraudulently obtained wire transfers. Proceeds from the fraud were rapidly
withdrawn and/or transferred to other bank accounts co-conspirators controlled.
The investigation identified more than $4 million in fraudulent bank transactions. The four
individuals were arrested on July 13, 2022.
31 Facts in the summarized case narratives come from court documents of the respective jurisdictions named.
36 │ April 1, 2022 – September 30, 2022
Impersonation Scams and Schemes
Tennessee Woman Steals $300,000 in IRS Impersonation Scheme
On April 11, 2022, TIGTA special agents arrested Telisha Futrell in Jackson, Tennessee. In
March 2022, Futrell was indicted in the Western District of Tennessee for wire fraud,
impersonating an officer or employee of the U.S. Government, obstruction of a grand jury
investigation, and tampering with a witness or victim.
Beginning in May 2014 and continuing into May 2019, Futrell devised an impersonation
scheme to defraud and obtain money through false pretenses. The scheme began with a
victim being contacted via Facebook by an individual using the name Jessica Johnson. The
victim and Johnson corresponded for several months, after which the victim received a
telephone call from an individual claiming to be Johnson’s cousin. The cousin told the victim
that Johnson had stage four cancer and did not have long to live. Subsequently, the victim
was notified Johnson died and the victim was the beneficiary of a multimillion-dollar
inheritance. In order to receive the inheritance, the victim was instructed to pay taxes in
advance through an IRS employee named Shieka Obannon, who was actually Futrell.
Futrell introduced herself to the victim as an IRS employee. During the course of the scheme,
Futrell portrayed the role of an IRS attorney, Federal agent, and other employees. To appear
as an IRS employee, Futrell sent text messages, e-mails, and called the victim to collect
purported tax payments. Futrell instructed the victim to pay her in cash and also via money
transmitters, such as Western Union, JPay, and MoneyGram. The victim began making
payments in 2015 and met with Futrell regularly. Futrell stole approximately $300,000 during
the scheme.
Futrell repeatedly attempted to obstruct the Federal investigation against her when she
provided false statements to special agents and tried to persuade one of the victims to lie
about their knowledge of the investigation.
If convicted, Futrell could receive more than 20 years in prison, three years of supervised
release, and a fine over $250,000.
Georgia Man Arraigned in IRS Impersonation Scheme
On May 25, 2022, in the Northern District of Georgia, Damian Alphonse Addison was
arraigned for charges of money laundering and conspiracy to commit money laundering.
He was an alleged co-conspirator in an IRS impersonation scheme.
Beginning in September 2017 and continuing until September 2018, Addison and other co-
conspirators allegedly engaged in the scheme. They allegedly called victims and falsely stated
that the victims owed money to the IRS. In some instances, victims were allegedly told that a
warrant for their arrest had been issued because of the money owed to the IRS. These victims
were instructed to either make a payment by wire transfer or deposit the funds directly into a
April 1, 2022 – September 30, 2022 │ 37
bank account Addison controlled. Addison allegedly received the wired funds and distributed
a portion of the proceeds to his co-conspirators.
If convicted, Addison could face up to 20 years in prison.
New York Man Pleads Guilty to Fraud Related to an Impersonation Scam
On June 23, 2022, in the Eastern District of New York, Kamal Zafar pled guilty to conspiracy to
commit wire fraud. According to a U.S. Department of Justice press release dated August 19,
2022, the conspiracy was related to an IRS impersonation scam.
Between January 2018 and September 2018, Zafar and his co-conspirators engaged in a
fraudulent telephone call and internet retail scam directed at thousands of individuals across
the United States. As part of the scam, telemarketing call centers in India were used to place
calls seeking to defraud victims of money by various fraudulent scenarios. The callers
claimed to be employees of the IRS, the Social Security Administration, or the Drug
Enforcement Administration. Victims were told they owed money to the U.S. Government or
one of its agents. They also were told they would be arrested if the debts were not
immediately paid.
Victims wired payments to bank accounts that Zafar and his co-conspirators opened in the
names of various inactive and shell corporations. Once received, the funds were withdrawn
and laundered through additional bank accounts. In total, Zafar and his co-conspirators
received approximately $2.3 million dollars from victims.
At sentencing, Zafar could receive up to 20 years in prison.
Tax Preparer Outreach
In addition to promoting employee integrity, TIGTA is committed to tax preparers’ education on
integrity. Tax preparers play an important role ensuring the integrity of tax administration
because of their frequent contact with the IRS and their influence on tax compliance or
noncompliance. Tax preparers can assist in the enforcement of tax administration by
ensuring that taxpayers comply with Internal Revenue laws, or they can impede it.
During this reporting period, TIGTA special agents provided integrity presentations to more
than 8,797 tax preparers at various locations nationwide. The presentations detailed
TIGTA’s role in protecting the integrity of Federal tax administration; the differences between
the respective jurisdictions of TIGTA and the IRS; how to identify various forms of preparer
misconduct; and common IRS impersonation scams.
The following cases represent OI’s efforts to protect tax administration from unscrupulous
tax preparers during this six-month reporting period: 32
32 Facts in the summarized case narratives come from court documents of the respective jurisdictions named.
38 │ April 1, 2022 – September 30, 2022
Virginia Woman Sentenced for Defrauding Taxpayers
On April 25, 2022, in the Western District of Virginia, Lisa Dillard was sentenced for wire
fraud. Dillard devised a scheme to defraud at least eight small businesses and their owners,
many of whom speak limited English. She pretended to be a registered tax and accounting
services professional. Dillard does not have a Preparer Tax Identification Number or an
Electronic Filing Identification Number. She also is not registered as an enrolled agent with
the IRS.
Beginning around February 2016 and continuing until July 2018, Dillard operated a tax and
accounting services business. In exchange for a monthly fee, she claimed to provide
accounting and Federal tax services. Dillard told victims they owed a tax liability, and she
falsely represented that she had established an installment agreement with the IRS. Dillard
instructed victims to pay installment payments directly to her, and she would pay the IRS on
their behalf. Victims typically made checks payable to Dillard, and she would deposit the
money into her personal bank account.
Dillard did not file the victims’ taxes or make any payments to the IRS on their behalf. Using
an IRS symbol, she created and provided victims fraudulent documents purporting to show
the existence of an installment agreement and their payment.
Dillard received 24 months in prison, three years of supervised release, and was ordered to
pay $190,294 in restitution.
Tax Preparer Sentenced After Defrauding the IRS
On June 23, 2022, in the Southern District of Texas, Brian Washington was sentenced for
providing a false statement on an income tax return. Washington pled guilty to this charge on
February, 25, 2022.
During the 2014 through 2015 tax filing seasons, Washington worked as a Volunteer Income
Tax Assistance (VITA) return preparer at the Neighborhood Tax Center. VITA is a nationwide
initiative that the IRS sponsors to provide income tax filing assistance to low-to-moderate
income individuals. While volunteering in the VITA program, Washington took taxpayer return
information from VITA locations to prepare and file taxpayers’ returns from his residence,
without authorization.
From about January 1, 2015, until approximately April 15, 2018, Washington fraudulently
prepared the taxpayers’ IRS Forms 1040, U.S. Individual Income Tax Return, using false
schedules and tax credits to claim larger refunds than what the taxpayers were entitled to
receive. Washington paid the taxpayers the refund they expected, while keeping the portion of
the refund that had been falsely claimed. During the course of the scheme, Washington filed
approximately 258 income tax returns, claiming refunds totaling over $1.19 million.
Washington received 10 months in prison, one year of supervised release, and was ordered to
pay $129,011 in restitution.
April 1, 2022 – September 30, 2022 │ 39
Kentucky Man Sentenced for Making a False Statement
On May 24, 2022, in the Eastern District of Kentucky, Charles Marshall Stivers was sentenced
for making and using a false document containing a false statement.
Stivers was initially licensed to practice as a Certified Public Accountant (CPA) by the State of
Kentucky in 1989. On October 23, 2015, the Kentucky State Board of Accountancy
permanently revoked Stivers’ CPA license by an Agreed Order. The Agreed Order prohibited
Stivers from ever holding himself as a CPA to the public in any capacity, including to the IRS or
any other tax authority.
On March 22, 2016, in Manchester, Kentucky, Stivers signed an IRS Form 2848, Power of
Attorney and Declaration of Representative, and indicated he was the Power of Attorney for a
business. As part of his completion of this form, Stivers specified in writing that he was a
licensed CPA. He also listed CPA license number 12597 that belonged to his son. Stivers
submitted the signed form to an IRS revenue officer.
On three more occasions in 2018 and 2019, Stivers completed IRS Form 2848 on behalf of
clients in Knoxville, Tennessee. Each time he indicated he was a licensed CPA, used his son’s
CPA license number, and forged his son’s signature.
Stivers was sentenced to 10 months in prison and two years of supervised release. He also
received a $30,000 fine, a $100 assessment fee, and was ordered not to hold himself out as
a CPA.
40 │ April 1, 2022 – September 30, 2022
Advance Oversight of America’s Tax System
TIGTA’s Office of Inspections and Evaluations identifies opportunities for improvement in IRS
and TIGTA programs by performing inspections and evaluations that report timely, useful, and
reliable information to decision makers and stakeholders.
This function has two primary product lines: inspections and evaluations.
Inspections are intended to:
• Provide factual and analytical information;
• Monitor compliance;
• Measure performance;
• Assess the effectiveness and efficiency of programs and operations;
• Share best practices; and
• Inquire into allegations of waste, fraud, abuse, and mismanagement.
Evaluations are intended to:
• Provide in-depth reviews of specific management issues, policies, or programs;
• Address Governmentwide or multiagency issues; and
• Develop recommendations to streamline operations, enhance data quality, and
minimize inefficient and ineffective procedures.
Fiscal Year 2022 Statutory Review of Compliance With Legal Guidelines Prohibiting the
Use of Illegal Tax Protester and Similar Designations (Report Number 2022-IE-R004)
Section 3707 of the RRA 98 prohibits the use of the term “Illegal Tax Protester” and similar
designations. 33 This legislation was enacted due to concerns that some taxpayers were being
permanently labeled as Illegal Tax Protesters by the IRS despite subsequently becoming
compliant with tax laws. TIGTA is required to annually evaluate the IRS’s compliance with this
law. Using Illegal Tax Protester or other similar designations may stigmatize the taxpayers and
cause employee bias in future contacts with them.
Prior to the enactment of the RRA 98, the IRS used Illegal Tax Protester indicators on its
Individual Master File to accelerate enforcement activity for taxpayers whose tax returns or
correspondence contained specific indicators of noncompliance with tax law, such as the use
of arguments repeatedly rejected by the courts. Section 3707 of the RRA 98 required the IRS
to remove the existing Illegal Tax Protester designations from taxpayers’ accounts on the
Individual Master File beginning January 1, 1999.
33
Pub. L. No. 105-206, 112 Stat. 685.
April 1, 2022 – September 30, 2022 │ 41
TIGTA’s review found that Illegal Tax Protester codes were not used on the Master File in
FY 2021. Additionally, TIGTA’s review of over half a million Taxpayer Information File records
found no records created in FY 2021 using the term Illegal Tax Protester or similar
designation.
However, TIGTA’s review of over 70 million narrative records created during FY 2021 in the
Accounts Management Services System found that employees referenced the term Illegal Tax
Protester or similar designation on six records for six different taxpayers. Further, TIGTA
reviewed 25,814 narrative records from the Criminal Investigation Management Information
System and identified 10 records of Illegal Tax Protester or similar designation involving eight
employees. TIGTA also reviewed 155,431 narrative records in the Taxpayer Advocate
Management Information System and identified two records referencing the term Illegal Tax
Protester or similar designation.
TIGTA made no recommendations in this report.
Fiscal Year 2022 Statutory Review of Compliance With Notifying Taxpayers of Their Rights
When Requested to Extend the Assessment Statute (Report Number 2022-IE-R005)
TIGTA is required by law to annually report information regarding extensions under I.R.C.
§ 6501(c)(4)(B), which requires the IRS provide notice to taxpayers of their rights to decline
requests to extend the assessment statute of limitations or to request any extension be
limited to a specific period of time or specific issues.
The IRS is required by law to notify taxpayers of their rights when requesting an extension of
the statute of limitations for assessing additional taxes and penalties. Taxpayers may be
adversely affected if the IRS does not follow requirements to notify taxpayers of their rights
related to assessment statute extensions.
TIGTA determined that the IRS was compliant with legal requirements related to requests to
extend the assessment statute. The IRS complied with the legal requirement to notify
taxpayers of their rights when requesting an extension of the assessment statute of
limitations.
TIGTA reviewed a statistically valid sample of 39 taxpayer audit files closed between
October 1, 2020, and September 30, 2021, in which the taxpayers agreed to extend the
statute expiration date. We found that the IRS complied with legal requirements. We did not
identify any instances in which the IRS failed to provide notice to the taxpayers of their rights
to decline to extend the assessment statute of limitations or to request that any extension be
limited to a specific period of time or specific issues.
However, the IRS is still unable to locate the majority of paper documents requested. The IRS
was unable to provide the majority of taxpayer audit files requested during our review. The
IRS reported that there was a backlog in processing requests in Kansas City, which
contributed to the delays in receiving documents. According to the IRS, there are multiple
42 │ April 1, 2022 – September 30, 2022
efforts throughout the IRS aimed at modernization and digitization. The IRS believes that
these efforts, which are long-term and service-wide, will improve the IRS’s document systems
and tracking capabilities.
TIGTA made no recommendations in this report.
April 1, 2022 – September 30, 2022 │ 43
44 │ April 1, 2022 – September 30, 2022
Audit Statistical Reports
Reports With Questioned Costs
TIGTA did not issue any audit reports with questioned costs during this semiannual reporting
period. The phrase “questioned costs” means costs that are questioned because of:
• An alleged violation of a provision of a law, regulation, contract, or other requirement
governing the expenditure of funds;
• A finding, at the time of the audit, that such cost is not supported by adequate
documentation (an unsupported cost); or
• A finding that expenditure of funds for the intended purpose is unnecessary or
unreasonable.
The phrase “disallowed cost” means a questioned cost that management, in a management
decision, has sustained or agreed should not be charged to the Government.
Unsupported
Amount Costs
Report Category Number
(in thousands) (in thousands)
1. Reports with no management decision at the
0 $0 $0
beginning of the reporting period
2. Reports issued during the reporting period 0 $0 $0
3. Subtotals (Item 1 plus Item 2) 0 $0 $0
4. Reports for which a management decision was
made during the reporting period:
a. Value of disallowed costs 0 $0 $0
b. Value of costs not allowed 0 $0 $0
5. Reports with no management decision at the
end of the reporting period (Item 3 minus 0 $0 $0
Item 4)
6. Reports with no management decision within
0 $0 $0
six months of issuance
April 1, 2022 – September 30, 2022 │ 45
Reports With Recommendations That Funds Be Put to Better Use
TIGTA issued seven audit reports during this semiannual reporting period with the recommendation
that funds be put to better use. 34 The phrase “recommendation that funds be put to better use”
means funds could be used more efficiently if management took actions to implement and complete
the recommendation, including:
• Reductions in outlays;
• Deobligations of funds from programs or operations;
• Costs not incurred by implementing recommended improvements related to operations;
• Avoidance of unnecessary expenditures noted in pre-award reviews of contract agreements;
• Prevention of erroneous payment of refundable credits, e.g., Earned Income Tax Credit; or
• Any other savings that are specifically identified.
The phrase “management decision” means the evaluation by management of the findings and
recommendations included in an audit report, and the issuance of a final decision concerning its
response to such findings and recommendations, including actions deemed necessary.
Report Category Amount
Number
(in thousands)
Section 1
Reports for which no management decision had been made by the
0 $0
beginning of the reporting period
Reports issued during the reporting period 3 $1,130,966
Total Section 1 3 $1,130,966
Section 2
Reports for which management decisions were made during the reporting period
Value of recommendations agreed to by management
Based on proposed management action 3 35 $530,504
Based on proposed legislative action 0 $0
Value of recommendations to which management did not agree 1 $600,462
Total Section 2 4 36 $1,130,966
Section 3
Reports for which no management decisions had been made by the end
0 $0
of the reporting period (Sec. 1 minus Sec. 2)
Reports with no management decision within six months of issuance 0 $0
34 See Appendix II for identification of audit reports involved.
35
One report (2022-46-059) claimed a total dollar amount for Funds Put to Better Use for three
recommendations. The IRS agreed with two of the three recommendations.
36 One report (2022-46-032) had recommendations where management both agreed and disagreed, as well as a
recommendation where management agreed with the recommendation but disagreed with the associated
outcome measure.
46 │ April 1, 2022 – September 30, 2022
Reports With Additional Quantifiable Impact on Tax Administration
In addition to questioned costs and funds put to better use, OA has identified measures that
demonstrate the value of audit recommendations to tax administration and business
operations. These issues are of interest to executives at the IRS and the Treasury
Department, Members of Congress, and the taxpaying public, and are expressed in
quantifiable terms to provide further insight into the value and potential impact of OA’s
products and services. Including this information also promotes adherence to the intent and
spirit of the Government Performance and Results Act. 37
Definitions of these additional measures are:
Increased Revenue: Assessment or collection of additional taxes.
Revenue Protection: Ensuring the accuracy of the total tax, penalties, and interest paid to the
Federal Government.
Reduction of Burden on Taxpayers: Decreases by individuals or businesses in the need for,
frequency of, or time spent on communication, record keeping, preparation, or costs to comply
with tax laws, regulations, and IRS policies and procedures.
Taxpayer Rights and Entitlements at Risk: The protection of due process rights granted to
taxpayers by law, regulation, or IRS policies and procedures. These rights most commonly
arise when filing tax returns, paying delinquent taxes, and examining the accuracy of tax
liabilities. The acceptance of claims for and issuance of refunds (entitlements) are also
included in this category, such as when taxpayers legitimately assert that they overpaid their
taxes.
Taxpayer Privacy and Security: Protection of taxpayer financial and account information
(privacy). Processes and programs that provide protection of tax administration, account
information, and organizational assets (security).
Inefficient Use of Resources: Value of efficiencies gained from recommendations to reduce
cost while maintaining or improving the effectiveness of specific programs; resources saved
would be available for other IRS programs. Also, the value of internal control weaknesses that
resulted in an unrecoverable expenditure of funds with no tangible or useful benefit in return.
Reliability of Management Information: Ensuring the accuracy, validity, relevance, and
integrity of data, including the sources of data and the applications and processing thereof,
used by the organization to plan, monitor, and report on its financial and operational
activities. This measure will often be expressed as an absolute value (i.e., without regard to
whether a number is positive or negative) of overstatements or understatements of amounts
recorded on the organization’s documents or systems.
Protection of Resources: Safeguarding human and capital assets, used by or in the custody of
the organization, from accidental or malicious injury, theft, destruction, loss, misuse,
overpayment, or degradation.
37 Pub. L. No. 103-62, 107 Stat. 285 (codified as amended in scattered sections of 5, 31, and 39 U.S.C.).
April 1, 2022 – September 30, 2022 │ 47
The number of taxpayer accounts and dollar values shown in the following chart were
derived from analyses of historical data and are thus considered potential barometers
of the impact of audit recommendations. Actual results will vary depending on the
timing and extent of management’s implementation of the corresponding corrective
actions and the number of accounts or subsequent business activities affected as of
the dates of implementation. Also, a report may have issues that affect more than one
outcome measure category.
Number of
Number of Dollar Value
Outcome Measure Category Taxpayer
Reports 38 (in thousands)
Accounts
Increased Revenue 2 3,502 $8,727
Revenue Protection 1 0 $58,091
Reduction of Burden on Taxpayers 2 4,009 $0
Taxpayer Rights and Entitlements at Risk 6 10,123,300 $822,366
Taxpayer Privacy and Security 0 0 $0
Inefficient Use of Resources 0 0 $0
Reliability of Management Information 2 12,826 $41,540
Protection of Resources 0 0 $0
The following reports contained quantifiable impacts other than the number of taxpayer
accounts and dollar value:
• Revenue Protection: Report Number 2022-34-062
• Taxpayer Rights and Entitlements at Risk: Report Numbers 2022-10-044,
2022-30-056, and 2022-47-070
• Reliability of Management Information: Report Numbers 2022-16-039,
2022-30-056, 2022-10-046, 2022-34-062, 2022-20-051, 2022-10-064, and
2022-20-050
• Protection of Resources: Report Numbers 2022-10-046, 2022-20-055,
2022-20-051, and 2022-20-065.
38 See Appendix II for identification of audit reports involved.
48 │ April 1, 2022 – September 30, 2022
Investigations Statistical Reports 39
Significant Investigative Achievements (April 1, 2022, through September 30, 2022)
Complaints/Allegations Received by TIGTA
Complaints Against IRS Employees 1,259
Complaints Against Non-Employees 1,470
Total Complaints/Allegations 2,729
Status of Complaints/Allegations Received by TIGTA
Investigations Initiated 713
In Process Within TIGTA 40 349
Referred to IRS for Action 385
Referred to IRS for Information Only 446
Referred to a Non-IRS Entity 41 0
Closed With No Referral 505
Closed Associated With Prior Investigation 118
Closed With All Actions Completed 213
Total Complaints/Allegations 2,729
Investigations Opened and Closed
Total Investigations Opened 1,065
Total Investigations Closed 1,143
Financial Accomplishments
Embezzlement/Theft Funds Recovered $9,624,565
Contract Fraud and Overpayments Recovered $71,141
Court-Ordered Fines, Penalties, and Restitution $86,228,102
Out-of-Court Settlements 0
Potentially Compromised by Bribery 0
Tax Liability of Taxpayers Who Threaten and/or Assault IRS Employees $2,247,983
IRS Assets and Resources Protected Against Malicious Loss $303,274
Total Financial Accomplishments $98,475,065
39 Includes the reporting requirements under the Inspector General Empowerment Act of 2016, Pub. L. No. 114-
317, 130 Stat. 1595 (codified in 5 U.S.C. App. (2018)).
40 Complaints for which final determination had not been made at the end of the reporting period.
41 A non-IRS entity includes other law enforcement entities or Federal agencies.
April 1, 2022 – September 30, 2022 │ 49
Status of Closed Criminal Investigations
Criminal Referral Employee Non-Employee Total
Referred – Accepted for Prosecution 7 121 128
Referred – Declined for Prosecution 138 194 332
Referred – Pending Prosecutorial Decision 1 64 65
Total Criminal Referrals 42 146 379 525
No Referral 273 317 590
Criminal Dispositions 43
Criminal Disposition Employee Non-Employee Total
Guilty 4 84 88
Nolo Contendere (no contest) 0 1 1
Pretrial Diversion 0 3 3
Deferred Prosecution 44 1 1 2
Not Guilty 0 0 0
Dismissed 1 6 7
Total Criminal Dispositions 6 95 101
Administrative Dispositions on Closed Investigations 45
Removed/Terminated 26
Suspended/Reduction in Grade 21
Resigned/Retired/Separated Prior to Adjudication 89
Oral or Written Reprimand/Admonishment 51
Clearance Letter/Closed, No Action Taken 42
Alternative Discipline/Letter With Cautionary Statement/Other 52
Non-Employee Actions 46 400
Total Administrative Dispositions 681
42 Criminal referrals include both Federal and State dispositions.
43 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.
44 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.
45 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.
46 Administrative actions taken by the IRS against non-IRS employees, e.g., contractors.
50 │ April 1, 2022 – September 30, 2022
Summary of Investigative Reports and Criminal Referrals
Criminal Referral Breakdown
Number of Investigative Reports Issued 460
Referred to the Department of Justice for Criminal Prosecution 440
Referred to State/Local Prosecuting Authorities 20
Number of Indictments and Criminal Informations 113
Indictments 84
Criminal Informations 29
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.
April 1, 2022 – September 30, 2022 │ 51
Closed Investigations Involving IRS Senior Government Employees 48
47
If Declined,
Detailed Description of the Facts and Criminal Date
Disposition: Date of
Circumstances of the Investigation: Status: Referred:
Declination:
A senior Government employee
allegedly circumvented the Special Act Other N/A N/A N/A
Award approval process.
A senior Government employee
allegedly committed an unsafe act
Other N/A N/A N/A
with a firearm while on a firearms
range.
A senior Government employee
allegedly yelled at a coworker,
Other N/A N/A N/A
threatened a coworker, and had
unauthorized outside employment.
47 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.
48 For this report, a “senior Government employee” refers to an officer or employee in the Executive branch who
occupies a position classified at or above GS-15 of the General Schedule. 5 U.S.C. App. § 5(f)(7).
52 │ April 1, 2022 – September 30, 2022
Inspections and Evaluations Statistical Reports
Evaluation Reports with Significant Unimplemented Corrective Actions
The Inspector General Act requires identification of significant recommendations described in
previous semiannual reports for which corrective actions have not been completed. The following
list is based on information from the Treasury Department’s Joint Audit Management Enterprise
System (JAMES).
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.
April 1, 2022 – September 30, 2022 │ 53
54 │ April 1, 2022 – September 30, 2022
Appendix I
Other Statistical Reports
Reports With Significant Unimplemented Corrective Actions
The Inspector General Act requires the identification of any outstanding unimplemented
recommendations, including the aggregate potential cost savings of those recommendations
described in previous semiannual reports for which corrective actions have not been completed.
The following list is based on information from the Treasury Department’s Joint Audit
Management Information System (JAMES).49,50
Report Projected
Issued Report Title and Recommendation Summary
Number Completion
(F = Finding No., R = Recommendation No.)
Date
INEFFICIENCIES IN PROCESSING OPERATIONS ASSISTANCE REQUESTS CAUSED
TAXPAYERS UNNECESSARY DELAYS
May 12/15/22 F-3, R-1: Revise Form 12412, Operations Assistance Request, to allow
2007-10-068
2007 requests to be closed as completed or as misrouted only if they had been
sent to the wrong Operations liaison.
THE OFFICE OF RESEARCH, ANALYSIS, AND STATISTICS NEEDS TO ADDRESS
COMPUTER SECURITY WEAKNESSES
September
2008-20-176 11/15/22 F-1, R-5: Ensure that audit and accountability controls are sufficient by
2008
requiring audit logs to be maintained a minimum of six years and to be
periodically reviewed by the security officer.
REVISING TAX DEBT IDENTIFICATION PROGRAMMING AND CORRECTING
PROCEDURAL ERRORS COULD IMPROVE THE TAX REFUND OFFSET
PROGRAM
On Hold51 F-1, R-1: Revise identification processes to include sole proprietor
March information from Form SS-4, Application for Employer Identification Number,
2016-40-028 to identify individual tax refunds to offset to business tax debt.
2016
03/15/23 F-3, R-1: Revise computer programming to use the Limited Liability
Company indicator on the business tax account to ensure that individual tax
refunds are not offset to the associated Limited Liability Company’s
business tax debt.
49 This summary data does not include recommendations that are specifically prohibited from disclosure by any
provision of law, such as I.R.C. § 6103, protecting tax returns and return information, or that are specifically
required by Executive Order to be protected from disclosure in the interest of national defense or national
security or in the conduct of foreign affairs.
50 The Office of Audit has previously designated two reports with unimplemented recommendations as Sensitive
But Unclassified. These Sensitive But Unclassified reports include subject matter that might create a risk of
circumvention of the law if publicly released. There are no potential cost savings associated with any
unimplemented recommendations from these reports.
51 Except where noted, recommendations designated as “On Hold” were agreed to by the IRS, but action was
deferred pending the availability of funds.
April 1, 2022 – September 30, 2022 │ 55
Report Projected
Issued Report Title and Recommendation Summary
Number Completion
(F = Finding No., R = Recommendation No.)
Date
IMPROVEMENTS ARE NEEDED TO ENSURE THAT TAX ACCOUNTS ON THE
AUTOMATED NON-MASTER FILE ARE ACCURATELY PROCESSED
On Hold F-1, R-1: Correct Automated Non-Master File programming to compute and
assess the Failure to File penalty on Form 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.
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
On Hold52 F-3, R-1: Establish processes and procedures to reduce unnecessary
resources expended notifying employers of an address change when
programming incorrectly identifies an address change resulting from minor
September formatting revisions.
2017-40-085
2017
52 This recommendation was agreed to by the IRS, but was placed “On Hold” because the IRS is awaiting input
from another agency.
56 │ April 1, 2022 – September 30, 2022
Report Projected
Issued Report Title and Recommendation Summary
Number Completion
(F = Finding No., R = Recommendation No.)
Date
PROCESSES NEED TO BE IMPROVED TO IDENTIFY INCOMPLETE AND
FRAUDULENT APPLICATIONS FOR INDIVIDUAL TAXPAYER IDENTIFICATION
NUMBERS
January
2018-40-010 On Hold F-3, R-2: Ensure that programming changes are made to require mandatory
2018
review when the Real-Time System alerts tax examiners that an applicant is
using duplicate supporting documents as has previously been used to
obtain an 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 when IRS
February
2018-40-013 data indicate that the sole proprietor is deceased.
2018
On Hold F-3, R-1: Perform an assessment to determine how an additional field could
be added to the Business Master File so that both the decedent Social
Security Number and a responsible party TIN can be captured for estates
and trusts.
On Hold F-3, R-5: Develop programming to reject estate applications if the decedent
TIN is not that of a deceased individual.
ACTIVE DIRECTORY OVERSIGHT NEEDS IMPROVEMENT AND CRIMINAL
INVESTIGATION COMPUTER ROOMS LACK MINIMUM SECURITY CONTROLS
09/15/23 F-2, R-1: Complete a cost analysis to: 1) determine the efficacy of
June relocating Criminal Investigation assets in each of the field offices to existing
2018-20-034
2018 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.
IMPROVEMENTS ARE NEEDED IN THE WITHHOLDING COMPLIANCE
PROGRAM
September On Hold F-3, R-2: Analyze the current selection criteria used by the Withholding
2018-30-072 Compliance System to determine if the taxpayers identified for systemic
2018
lock-in letter issuance are the best use of limited resources. This would
include potentially identifying taxpayers with multiple years of
under-withholding and the percentage of inventory that includes nonfilers.
ELECTRONIC AUTHENTICATION SECURITY CONTROLS HAVE IMPROVED, BUT
CONTINUED PROGRESS IS NEEDED TO ENSURE THE PROTECTION OF
PUBLIC-FACING APPLICATIONS
April 02/15/23 F-1, R-1: Ensure that public-facing legacy applications are complying with
2019-20-017
2019 National Institute of Standards and Technology Special Publication 800-63-3
and that an implementation plan includes specific timelines for
accomplishing full compliance of legacy applications.
April 1, 2022 – September 30, 2022 │ 57
Report Projected
Issued Report Title and Recommendation Summary
Number Completion
(F = Finding No., R = Recommendation No.)
Date
IMPLEMENTATION OF THE TAX CUTS AND JOBS ACT DEEMED REPATRIATION
TAX PRESENTED SIGNIFICANT CHALLENGES
May
2019-34-033
2019 On Hold F-2, R-1: Take steps to ensure that Section 965 payments are recorded with
the correct designated payment code.
BILLIONS OF DOLLARS OF POTENTIALLY ERRONEOUS CARRYFORWARD
CLAIMS ARE STILL NOT BEING ADDRESSED
August
2019-40-044
2019 09/15/23 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 application
2019
audit logs for the appropriate period and periodic review of the application
audit logs by an independent source.
ADDITIONAL ACTIONS ARE NEEDED TO FURTHER REDUCE UNDELIVERABLE
MAIL
On Hold F-1, R-1: Develop 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; suppress
September the issuance of correspondence when a taxpayer’s address of record is an
2019-40-074
2019 IRS campus; and research and update taxpayer addresses for which the
U.S. Postal Service returns undeliverable mail with a yellow label that
provides a more current address.
On Hold F-2, R-1: Install and use hygiene software to perfect taxpayer addresses on
the ITIN Real-Time System.
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.
ACTIVE DIRECTORY OVERSIGHT NEEDS IMPROVEMENT
February 12/15/24 F-2, R-6: Ensure that business role account passwords are appropriately
2020-20-006
2020 configured to expire and require that Personal Identity Verification cards be
used in accordance with policy.
58 │ April 1, 2022 – September 30, 2022
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.
IMPROPER PAYMENT REPORTING HAS IMPROVED; HOWEVER, THERE HAVE
BEEN NO SIGNIFICANT REDUCTIONS TO THE BILLIONS OF DOLLARS OF
IMPROPER PAYMENTS
April
2020-40-025 01/15/23 F-1, R-1: Work with the Department of Health and Human Services to
2020
develop a comprehensive risk assessment of improper Premium Tax Credit
payments, including the risk of Advanced Premium Tax Credit improper
payments.
SOME CORRECTIVE ACTIONS TO ADDRESS REPORTED INFORMATION
TECHNOLOGY WEAKNESSES WERE NOT FULLY AND EFFECTIVELY
IMPLEMENTED AND DOCUMENTED
June
2020-20-022 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.
CONTROLS OVER THE MANAGEMENT AND SECURITY OF OFFICIAL
PASSPORTS NEED IMPROVEMENT
August 03/10/23 F-3, R-1: Consider including a requirement for independent periodic or
2020-10-051 annual surprise security reviews of the passport offices to ensure that
2020
passport personnel are adhering to updated guidelines for securing and
safeguarding passports.
THE ENTERPRISE CASE MANAGEMENT SOLUTION DEVELOPMENT IS
DELAYED, AND ADDITIONAL ACTIONS ARE NEEDED TO DEVELOP A
DECOMMISSIONING STRATEGY
September 09/15/23 F-3, R-1: Coordinate with the business operating divisions to perform the
2020-20-061
2020 fit-gap analysis on all case management systems to maximize the Enterprise
Case Management (ECM) solution's functionality and ensure that the
majority of legacy case management systems are consolidated.
THE INTERNAL REVENUE SERVICE CAN IMPROVE TAXPAYER COMPLIANCE
FOR VIRTUAL CURRENCY TRANSACTIONS
September
2020-30-066 On Hold53 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.
53 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.
April 1, 2022 – September 30, 2022 │ 59
Report Projected
Issued Report Title and Recommendation Summary
Number Completion
(F = Finding No., R = Recommendation No.)
Date
BILLIONS IN POTENTIAL TAXES WENT UNADDRESSED FROM UNFILED
RETURNS AND UNDERREPORTED INCOME BY TAXPAYERS THAT RECEIVED
FORM 1099-K INCOME
December 10/15/22 F-1, R-3: Define high-income business nonfilers and create a strategy to
2021-30-002
2020 work these cases so that all high-income business nonfiler cases will have
the opportunity to be selected and worked. Include the business
high-income strategy in the IRS Nonfiler Strategy plan.
Potential Increased Revenue: $1,197,629,572
IMPROVEMENTS HAVE BEEN MADE, BUT CONTROLS NEED TO BE
STRENGTHENED TO DETECT IMPROPER SELF-EMPLOYED RETIREMENT
DEDUCTIONS
December
2021-10-007 On Hold F-1, R-1: Revise procedures for determining eligibility for the self-employed
2020
retirement deduction to include Schedule SE, Self-Employment Tax, as
evidence of self-employment.
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
12/15/22 F-1, R-3: Update the transcript request form to include a box indicating
whether the form was signed electronically by the taxpayer, or require
Income Verification Express Service (IVES) participants to submit
electronically signed transcript requests in a separate batch from those that
are not electronically signed.
On Hold F-1, R-4: Implement a process to compare electronically signed transcript
requests received from IVES participants to a current list of all IVES
participants allowed to submit electronically signed requests to prevent the
processing of any requests submitted by IVES participants that are not
February approved to participate in the electronic signature program.
2021-45-017
2021 12/15/22 F-3, R-1: Update the transcript request form to include a separate line to
identify the client, such as the client's business name, address, and
telephone number.
12/15/22 F-3, R-2: Update the transcript request form instructions to require
identifying information for the client in cases in which the transcript request
is submitted by an IVES participant on behalf of their client that will
ultimately receive the taxpayer’s transcript.
On Hold F-4, R-1: Allocate sufficient resources to the IVES Program to perform
suitability checks that are consistent with other IRS programs at the time of
enrollment and implement a continuous tax compliance check to ensure
that they remain suitable for the program.
02/15/23 F-6, R-1: Ensure that IVES Program internal guidelines are updated in the
IRM to include key processes and procedures.
60 │ April 1, 2022 – September 30, 2022
Report Projected
Issued Report Title and Recommendation Summary
Number Completion
(F = Finding No., R = Recommendation No.)
Date
THE INTERNAL REVENUE SERVICE FACES CHALLENGES IN ADDRESSING THE
GROWTH OF PEER-TO-PEER PAYMENT APPLICATION USE
April 11/15/22 F-3, R-1: Consider requiring the completion of the internet use and
2021-30-022
2021 e-commerce income activity minimum income probe for all individual
business, corporate, and other business taxpayers, including those
designated as limited-scope examinations.
TAXPAYER FIRST ACT: DATA SECURITY IN THE IDENTITY THEFT TAX REFUND
FRAUD INFORMATION SHARING AND ANALYSIS CENTER
May
2021-25-025 04/15/24 F-3, R-1: F-3, R-1: Ensure that the Information Sharing and Analysis
2021
Center’s alternate processing site is converted to a ******** that achieves
the maximum tolerable downtime to prevent any filing season delays. 54
BACKUP WITHHOLDING NONCOMPLIANCE AND UNDERREPORTED
EMPLOYMENT TAXES CONTINUE TO CONTRIBUTE BILLIONS OF DOLLARS TO
THE TAX GAP
May
2021-40-030
2021 10/15/22 F-1, R-1: Develop processes and procedures to identify and address the
reporting of income on information returns using a decedent TIN.
THE INDIAN TRIBAL GOVERNMENT FUNCTION NEEDS TO STRENGTHEN
INTERNAL CONTROLS AND PERFORMANCE MEASURES
11/15/22 F-1, R-3: Ensure that Outreach and Education (O&E) management oversees
and complies with reporting and approval requirements for O&E events,
ensure that O&E activity data are complete and reliable by developing a
single inventory control system to electronically track and report O&E event
data and documentation, and reinstitute reporting and documenting
May feedback from completed O&E events.
2021-10-040
2021 10/15/22 F-2, R-1: Routinely obtain Indian Tribal Government taxpayer feedback and
use the results to measure and improve the program.
11/15/22 F-2, R-2: Revise and report Indian Tribal Government performance
measures to include the business results for O&E and taxpayer assistance
efforts and establish an objective methodology to assess the effectiveness
of O&E events.
10/15/22 F-4, R-1: Review all current Indian Tribal Government function Memoranda
of Understanding and update them accordingly.
CRIMINAL RESTITUTION ASSESSMENT PROCEDURES NEED IMPROVEMENT
12/15/22 F-2, R-1: Establish monitoring procedures to provide reasonable assurance
that all interest and penalties incorrectly assessed to Restitution-Based
June Assessment accounts are removed.
2021-30-033
2021
54 Redaction due to subject matter that might create a risk of circumvention of the law if publicly released.
April 1, 2022 – September 30, 2022 │ 61
Report Projected
Issued Report Title and Recommendation Summary
Number Completion
(F = Finding No., R = Recommendation No.)
Date
CONTROLS OVER THE INTERNAL REVENUE SERVICE CONTRACTOR TAX
CHECK PROCESS NEED TO BE IMPROVED
12/15/22 F-2, R-1: Coordinate with the Treasury Suspension and Debarment Official
to identify a required time frame and sample format for what information
June
2021-10-039 should be included in the reports that the IRS provides on contractors with
2021
Federal tax delinquencies. Revise the IRS Acquisition Policy Procedures,
Guidance, and Information to specify a required time frame for the reporting
to the Suspension and Debarment Official and include a sample reporting
format to help ensure that all required information is included.
EFFORTS TO ADDRESS THE COMPLIANCE RISK OF UNDERREPORTING OF
S CORPORATION OFFICERS’ COMPENSATION ARE INCREASING, BUT MORE
ACTION CAN BE TAKEN
August
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.
FISCAL YEAR 2021 STATUTORY AUDIT OF COMPLIANCE WITH LEGAL
GUIDELINES RESTRICTING THE USE OF RECORDS OF TAX ENFORCEMENT
RESULTS
02/15/23 F-1, R-4: Ensure that RRA 98 § 1204(b) instances of noncompliance are
August
2021-30-052 discussed with the responsible managers to ensure that they understand
2021
the retention standard documentation.
02/15/23 F-3, R-1: Ensure that internal procedures and controls are documented,
established, and implemented as soon as possible and no later than the
currently established due date of December 23, 2021.
THE EARNED INCOME TAX CREDIT EXAMINATION COMPLIANCE STRATEGY
CAN BE IMPROVED
September 03/15/23 F-1, R-3: Evaluate and revise the scoring process to ensure that the cases
2021-30-051 with the highest risk are scored as such. This process should include adding
2021
weight to cases with higher Questionable Refund Program and Dependent
Database scores and Duplicate TIN repeaters.
FISCAL YEAR 2021 REVIEW OF COMPLIANCE WITH LEGAL GUIDELINES
WHEN CONDUCTING SEIZURES OF TAXPAYERS’ PROPERTY
September
2021-30-055 11/15/22 F-1, R-1: Require Advisory to review Form 2433, Notice of Seizure, for real
2021
property seizures during the pre-seizure review process.
LAPTOP AND DESKTOP SANITIZATION PRACTICES NEED IMPROVEMENT
11/15/22 F-1, R-1: Ensure that the IRS only uses sanitization products that are
September approved by the Department of Defense, the Department of Homeland
2021-20-056 Security, or the National Security Agency.
2021
11/15/22 F-1, R-2: Ensure that sanitization equipment and procedures are tested
annually to verify that the intended sanitization results are being achieved.
62 │ April 1, 2022 – September 30, 2022
Report Projected
Issued Report Title and Recommendation Summary
Number Completion
(F = Finding No., R = Recommendation No.)
Date
IMPROVEMENTS ARE NEEDED TO IDENTIFY POTENTIALLY FRAUDULENT
INDIVIDUAL INTERNATIONAL TAX RETURNS DURING PROCESSING
10/15/22 F-1, R-4: Review the 1,368 Forms 1040-PR, Self-Employment Tax Return -
Puerto Rico, and 1040-SS, U.S. Self-Employment Tax Return, TIGTA
identified and take actions to recover erroneous credits.
Potential Funds Put to Better Use: $2,366,596
10/15/22 F-3, R-3: Review the 99 questionable returns that received the Additional
Child Tax Credit that TIGTA identified and take actions to recover any
September erroneous Additional Child Tax Credit received.
2021-40-057 Potential Funds Put to Better Use: $170,901
2021
10/15/22 F-6, R-1: Review the 36,373 returns that TIGTA identified that potentially
received erroneous Additional Opportunity Tax Credit and take actions to
recover any erroneous Additional Opportunity Tax Credit received.
Potential Funds Put to Better Use: $33,151,406
10/15/22 F-6, R-3: Review the 13,924 returns that TIGTA identified that potentially
received erroneous refundable credits and take actions to recover any
erroneous refundable credits received.
Potential Funds Put to Better Use: $50,600,852
ENTERPRISE CASE MANAGEMENT DEPLOYED ITS INITIAL RELEASE, BUT
PROCESS IMPROVEMENTS ARE NEEDED FOR FUTURE RELEASES
September 03/15/23 F-1, R-1: Ensure that the ECM program optimizes and fully implements the
2021-20-059 selected Scaled Agile Environment configuration’s core competencies.
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 55
September 10/15/22 F-3, R-2: Evaluate and implement controls to provide an age tracking
2021-20-063 capability for vulnerabilities detected by the configuration
2021
compliance-scanning tool.
EFFECTS OF THE COVID-19 PANDEMIC ON BUSINESS TAX RETURN
PROCESSING OPERATIONS
September 01/15/23 F-2, R-1: Evaluate the feasibility to direct additional types of payments from
2021-46-064 Tax Processing Centers to lockbox sites. This evaluation should also assess
2021
the feasibility of directing payments received by field office employees to
lockbox sites for processing.
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.
55 Redaction due to subject matter that might create a risk of circumvention of the law if publicly released.
April 1, 2022 – September 30, 2022 │ 63
Report Projected
Issued Report Title and Recommendation Summary
Number Completion
(F = Finding No., R = Recommendation No.)
Date
FISCAL YEAR 2021 STATUTORY REVIEW OF COMPLIANCE WITH NOTICE OF
FEDERAL TAX LIEN FILING DUE PROCESS PROCEDURES
11/15/22 F-1, R-1: Correct IRM references to the Automated Lien System User Guide
for Automated Collection System Support function employees to update
September
2021-30-067 delivery status when undeliverable mail is received.
2021
02/15/23 F-1, R-2: Issue a Service-Wide Electronic Research Program Alert to
Automated Collection System Support functions reminding employees to
follow IRM instructions when processing undeliverable Notices of Federal
Tax Lien, once the IRM section is updated.
FISCAL YEAR 2021 STATUTORY REVIEW OF COMPLIANCE WITH LEGAL
GUIDELINES WHEN ISSUING LEVIES
05/15/23 F-2, R-1: Ensure that corrective programming is implemented so that the
September Automated Collection System will block levies for which the final Collection
2021-30-069 2021 Due Process (CDP) notice is reversed or disqualified.
02/15/23 F-3, R-1: Ensure that corrective programming changes are implemented to
block the issuance of levies when previous CDP notices were reversed and
not reissued.
ADDRESSING COMPLEX AND INCONSISTENT EARNED INCOME TAX CREDIT
AND ADDITIONAL CHILD TAX CREIT RULES MAY REDUCE UNINTENTIONAL
ERRORS AND INCREASE PARTICIPATION
12/15/22 F-1, R--1: Modify the language in soft notices sent to individuals who claim a
September multiple-use child’s TIN to instruct individuals to amend their return if they
2021-40-070 determine the child’s TIN was used in error.
2021
12/15/22 F-1, R-2: Establish processes to notify individuals who claim a multiple-use
child’s TIN to the potential theft of their child’s identity and provide actions
they can take to report the theft and protect their child’s identity from future
misuse.
FISCAL YEAR 2020 DIGITAL ACCOUNTABILITY AND TRANSPARENCY ACT
REPORTING COMPLIANCE
10/15/22 F-1, R-1: Implement the automated quality review program and use the
results of the quality reviews to guide training focused on high error rate
elements.
10/15/22 F-1, R-2: Develop a standardized template for documenting quality
October assurance reviews and use the results of these reviews to guide training
2022-10-003 focused on high error elements.
2021
10/15/22 F-2, R-1: Implement procedures requiring: 1) source documentation be
provided to support the detailed grantee obligation information, and 2) the
reconciliation between grantee award amounts reported to the Department
of Health and Human Services and the detailed grantee obligation
information provided by the grant program offices for posting.
64 │ April 1, 2022 – September 30, 2022
Report Projected
Issued Report Title and Recommendation Summary
Number Completion
(F = Finding No., R = Recommendation No.)
Date
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
2021 time frames, the Plan of Action and Milestones and Risk-Based Decisions
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
01/15/23 F-1, R-1: Update the Schedule Limited English Proficiency (LEP) instructions
to clearly communicate to taxpayers when they may expect to begin
receiving notices and letters in their preferred language.
10/15/22 F-3, R-1: Implement a procedure for translation specialists to ensure the
accuracy of translated notices and letters prior to placing the program into
production.
12/15/25 F-4, R-1: Implement a more centralized and structured approach that
December includes an assessment of factors including high-volume notices and letters
2022-40-008 issued to taxpayers to ensure that frequently issued notices and letters as
2021
well as those that have significant impact on the taxpayer are translated into
Spanish.
01/15/23 F-5, R-1: Increase outreach to IRS employees encouraging the use of Form
14162, Over-the-Phone Service Feedback, to evaluate Over-the-Phone
Interpreter (OPI) service provided to LEP taxpayers.
12/15/25 F-5, R-2: Establish a process for LEP taxpayers to provide feedback on their
experience using the 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.
PROCEDURES TO ADDRESS EMPLOYEE MISCONDUCT WERE FOLLOWED,
BUT RESOLUTION TIME AND QUARTERLY REVIEW NEED IMPROVEMENT
12/15/22 F-1, R-1: Automate employee misconduct case processes, including
elevation to higher level supervisors when appropriate, and upon
implementation, train Labor/Employee Relations and Negotiations
employees to use the system features to improve case timeliness.
December 12/15/22 F-2, R-1: Revise the Performance Quality Measurement System review
2022-10-011
2021 sheets to ensure that weighted formulas and calculations accurately
represent the circumstances of the case and management priorities.
12/15/22 F-2, R-2: Ensure that the quality review process for employee misconduct
provides management with sufficient detail to identify areas needing
improvements and is conducted by individuals who do not have
responsibility for the activities being evaluated.
April 1, 2022 – September 30, 2022 │ 65
Report Projected
Issued Report Title and Recommendation Summary
Number Completion
(F = Finding No., R = Recommendation No.)
Date
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
action, employee training, or outreach.
02/15/23 F-1, R-3: Establish an examination selection process for business owners
January submitting questionable Forms 8609-A, Annual Statement for Low-Income
2022-30-012
2022 Housing Credit, that do not correspond to Forms 8609, Low-Income Housing
Credit Allocation and Certification.
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 or pass-through Schedules K-1, Partner’s Share of Income, Deductions,
and Credits, etc.
ADMINISTRATION OF THE INDIVIDUAL TAXPAYER IDENTIFICATION NUMBER
PROGRAM
12/15/22 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.
11/15/22 F-1, R-5: Review the 5,298 tax returns that TIGTA identified for which the
IRS incorrectly allowed retroactive credit claims and take steps to ensure
that these erroneous benefits are recovered.
Potential Funds Put to Better Use: $5,634,868
01/15/23 F-2, R-2: Review the 6,688 ITINs that TIGTA identified and take appropriate
actions to ensure that these ITINs do not remain active unless the individual
can demonstrate a continued tax filing need.
12/15/22 F-2, R-5: Review the 716 ITINs that TIGTA identified to determine why these
January
2022-40-013 ITINs were not identified by systemic programming for deactivation due to
2022
nonuse and modify the programming as appropriate.
12/15/22 F-2, R-6: Review the 910 ITINs that TIGTA identified that were not
deactivated as required and revoke or deactivate them as appropriate.
11/15/22 F-2, R-7: Review the 2,118 ITINs that TIGTA identified that were deactivated
in error and reactivate as appropriate.
11/15/22 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.
10/15/22 F-2, R-9: Evaluate whether extending the six-month holding period for
original identification documents will improve the identification of a better
return address and reduce the number of applicants who request
documents that have been destroyed or returned to an embassy.
MORE INTERIM STEPS COULD BE TAKEN TO MITIGATE INFORMATION
TECHNOLOGY SUPPLY CHAIN RISKS
February 02/15/23 F-1, R-1: Implement controls to manage information technology supply
2022-20-009
2022 chain risks based on the revised IRM 10.8.1 guidance as well as do more to
identify and incorporate Supply Chain Risk Management best practices of
other Federal agencies that would be applicable to the IRS.
66 │ April 1, 2022 – September 30, 2022
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
02/15/23 F-1, R-1: Ensure that quality reviewers always select all applicable reason
codes, include “Other,” when reviewing Employee Plans (EP) Examinations
cases to show why the element failed.
02/15/23 F-1, R-2: Include the number of errors for all reason codes, including
February “Other,” in case quality reports.
2022-10-014
2022 03/15/23 F-1, R-3: Periodically analyze the population of cases that failed an element
due to the reason code “Other” to determine if new reason codes or quality
reviewer training is warranted.
07/15/23 F-1, R-6: Ensure that EP Examinations’ proposed corrective actions are
implemented timely and should develop performance metrics and 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
function’s transition of its clerical staff to the new, higher-graded position
descriptions.
12/15/22 F-2, R-1: Identify and implement interim solutions that will address the
February
2022-40-015 resource constraints currently being placed on the Submission Processing
2022
function due to its backlog.
10/15/22 F-2, R-2: Ensure that timely advancements are made to the digital platform
of Forms 3949-A, Information Referral, to develop automatic routing of the
forms directly to the business units to alleviate the Submission Processing
workload.
12/15/24 F-3, R-1: Ensure that efforts to evaluate and purchase updated or new mail
opening/sorting technology are timely addressed.
ADDITIONAL ACTIONS ARE NEEDED TO ADDRESS QUALIFIED OPPORTUNITY
ZONE FUND AND INVESTOR NONCOMPLIANCE
01/15/23 F-1, R-3: As part of the compliance initiative project, review the 699
Qualified Opportunity Funds (QOF) that were identified with an invalid
****** 56 number on Tax Year 2019 tax returns and take appropriate
actions to address noncompliance with QOF fund certification requirements.
February 01/15/23 F-1, R-4: Review the 341 QOFs that reported investments in another QOF or
2022-40-018
2022 their own EIN on Tax Year 2019 tax returns and address QOFs that include
these investments in their total Qualified Opportunity Zone property when
calculating their investment standard.
01/15/23 F-2, R-1: As part of the compliance initiative project, review the 5,141
investor returns for which the investor reported ************ 57 and
address any ineligible deferred capital gains.
56
Redaction due to subject matter that might create a risk of circumvention of the law if publicly released.
57
Redaction due to subject matter that might create a risk of circumvention of the law if publicly released.
April 1, 2022 – September 30, 2022 │ 67
Report Projected
Issued Report Title and Recommendation Summary
Number Completion
(F = Finding No., R = Recommendation No.)
Date
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
10/15/22 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
instructions for Form 9465, Installment Agreement Request, concerning
PPIAs.
11/15/23 F-2, R-1: Extend Accounts Management Services history note retention
requirements pertaining to taxpayers’ Forms 433-F, Collection Information
March Statement, and financial analyses.
2022-30-021 02/15/23 F-2, R-2: Remind Collection employees of the requirement to conduct a
2022
financial analysis to determine a taxpayer’s ability to pay and to document
the analysis when considering PPIAs.
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.
02/15/23 F-3, R-1: Revise Currently Not Collectible (CNC) procedures to include a PPIA
decision point before determining to place a taxpayer in a CNC status, and in
the interim, remind Collection employees of the requirement to consider and
document whether the taxpayer can afford to fully or partially pay their debt
before placing the taxpayer’s account in CNC status.
Potential Increased Revenue: $35,135,821
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.
68 │ April 1, 2022 – September 30, 2022
Report Projected
Issued Report Title and Recommendation Summary
Number Completion
(F = Finding No., R = Recommendation No.)
Date
AMERICAN RESCUE PLAN ACT: ASSESSMENT OF PROCESSES TO IDENTIFY
AND ADDRESS IMPROPER CHILD AND DEPENDENT CARE CREDIT CLAIMS
02/15/23 F-2, R-1: Revise Form 2441, Child and Dependent Care Expenses, to
include checkboxes to note whether dependent care expenses are for a
March spouse or dependent who is physically or mentally incapable of caring for
2022-47-023 themselves or if special deemed earned income rules apply.
2022
03/15/23 F-2, R-2: Develop a process to identify tax returns with adult
************. 58 These tax returns should be considered for selection for
post-refund compliance reviews.
03/15/23 F-5, R-1: Develop a compliance plan for post–refund treatment of cases
involving ****************. 59
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
07/15/23 F-1, R-3: Review and correct the 14,030 tax returns for which the tax
examiner did not allow the use of the Tax Year 2019 earned income to
March calculate the Earned Income Tax Credit (EITC) amount.
2022-40-024 Potential Funds Put to Better Use: $485,415
2022
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
11/15/22 F-4, R-1: Establish a timeline to evaluate the Identity Protection Personal
Identification Number unpostable process and determine if it is an effective
use of resources.
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 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.
58
Redaction due to subject matter that might create a risk of circumvention of the law if publicly released.
59
Redaction due to subject matter that might create a risk of circumvention of the law if publicly released.
April 1, 2022 – September 30, 2022 │ 69
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.
02/15/23 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 02/15/23 F-3, R-9: Develop an action plan to prioritize the continued expansion of
2022
documents that can be sent in via electronic fax and converted into a
Correspondence Imaging System image.
02/15/23 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.
02/15/23 F-4, R-2: Complete the inventory reconciliations for the four remaining
Accounts Management sites to identify and correct inventory inaccuracies
and inconsistencies and implement processes to provide oversight by
periodically performing reconciliations for each site so that any future
inconsistencies and errors are identified and corrected in a timely manner.
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
March FINALIZED
2022-15-031
2022
06/15/23 F-1, R-1: Ensure that requests for organizational change are properly
prepared, submitted, and approved prior to implementing any additional
changes to the IRS’s organizational structure.
70 │ April 1, 2022 – September 30, 2022
Other Statistical Reports
The Inspector General Empowerment Act of 2016 requires Inspectors General to address the
following issues for the Offices of Audit and Inspections and Evaluations: 60
Issue Result for TIGTA
Interference/Access to Information
Report any attempt to interfere with the independence of
TIGTA, including: budget constraints designed to limit the As of September 30, 2022, there were no
capabilities of TIGTA; and incidents of resistance or attempts to interfere with the independence
objection to oversight activities of TIGTA. of TIGTA or instances of restricted or
significantly delayed access to information.
Report restricted or significantly delayed access to
information, including the justification of the
establishment for such action.
Disputed Recommendations
As of September 30, 2022, there were no
Provide information on significant management decisions instances in which significant
in response to recommendations with which the Inspector recommendations were disputed.
General disagrees.
Revised Management Decisions
Provide a description and explanation of the reasons for As of September 30, 2022, there were no
any significant revised management decisions made significant revised management decisions.
during the reporting period.
Reports Issued in the Prior Reporting Period With No
Management Response As of September 30, 2022, there were no
Provide a summary of each report issued before the prior reports for which management’s
beginning of the current reporting period for which no response was not received within 60 days of
management response was received within 60 days of issuance.
the report issuance date.
Disclosure
As of September 30, 2022, there were no
Provide detailed descriptions of the circumstances of reports that had been closed and were not
each inspection, evaluation, and audit that was closed by disclosed to the public.
the agency and was not disclosed to the public.
Review of Legislation and Regulations
TIGTA’s Office of Chief Counsel reviewed 137
Review existing and proposed legislation and regulations, proposed regulations and legislative requests
and make recommendations concerning the impact of during this reporting period.
such legislation or regulations.
60 Results listed are for this reporting period only.
April 1, 2022 – September 30, 2022 │ 71
Appendix II
Audit Products (issued April 1, 2022, through September 30, 2022)
Report
Report Title Outcome Measure(s)
Number
April 2022
Additional Actions Are Needed to Address Non-Filing and
2022-30-019 Non-Reporting Compliance Under the Foreign Account Tax
Compliance Act
May 2022
2022-40-035 Interim Results of the 2022 Filing Season
Taxpayer Rights and Entitlements:
American Rescue Plan Act: Implementation of Premium
2022-47-034 $14,762,645 impacting 27,461 taxpayer
Tax Credit Provisions
accounts
Increased Revenue:
A Service-Wide Strategy Is Needed to Address Challenges
2022-40-036 $2,461,704 impacting 897 taxpayer
Limiting Growth in Business Tax Return Electronic Filing
accounts
Programs Susceptible to Improper Payments Are Not
2022-40-037
Adequately Assessed and Reported
2022-30-033 Trends in Compliance Activities Through Fiscal Year 2020
The Child Tax Credit Update Portal Was Successfully
2022-27-028 Deployed, but Security and Process Improvements Are
Needed
Taxpayer Rights and Entitlements:
$79,809,184 impacting 64,264 individuals
Processing of Recovery Rebate Credit Claims During the Taxpayer Rights and Entitlements:
2022-46-032
2021 Filing Season 10,026,968 individuals impacted
Cost Savings (Funds Put to Better Use):
$818,451,758
June 2022
Fiscal Year 2022 Review of Compliance With Legal Taxpayer Rights and Entitlements:
2022-30-038 Guidelines When Conducting Seizures of Taxpayers’ 10 taxpayer accounts impacted
Property
July 2022
Reliability of Information:
Fingerprinting and Employment Eligibility Verification Delays 975 inaccurate records impacted
2022-16-039 Due to the COVID-19 Pandemic May Increase Taxpayer
Data Exposure Risks Reliability of Information:
five Forms I-9 impacted
72 │ April 1, 2022 – September 30, 2022
Fiscal Year 2022 IRS Federal Information Security
2022-20-040
Modernization Act Evaluation
American Rescue Plan Act: Assessment of the Child Tax
2022-47-042
Credit Update Portal’s Capabilities and Related Processes
Review of the Internal Revenue Service’s Purchase Card
2022-10-047
Violations Report
Successful Detection and Assistance Processes Used to
2022-40-041 Combat Individual Identity Theft Should Be Implemented to
Improve Business Identity Theft
Fiscal Year 2022 Mandatory Review of Compliance With the Taxpayer Rights and Entitlements:
2022-10-044
Freedom of Information Act 360 responses to FOIA requests impacted
August 2022
Taxpayer Rights and Entitlements:
Review of the Independent Office of Appeals Collection Due 3,233 taxpayer accounts impacted
2022-10-043
Process Program Increased Revenue:
2,586 taxpayer accounts impacted
Fiscal Year 2022 Statutory Review of Restrictions on
2022-30-054
Directly Contacting Represented Taxpayers
Compliance Efforts Are Needed to Address Refund Claims
2022-35-049 Reported on Form 1139 That Are Based on the CARES Act
Net Operating Loss Carryback Provisions
Taxpayer Burden:
Delays Continue to Result in Businesses Not Receiving 4,001 taxpayer accounts impacted
2022-46-059
Pandemic Relief Benefits Cost Savings (Funds Put to Better Use):
$45,310,431
September 2022
The IRS Effectively Planned to Use and Provide Oversight of
2022-27-045 the American Rescue Plan Act Funds; However, Subsequent
Reallocation of Modernization Funds Resulted in Significant
Replanning
The IRS’s Inability to Timely Process Noncorporate
Applications for Refund of Net Operating Losses Under the
2022-36-048
CARES Act Delayed Taxpayer Refunds and Cost Millions of
Dollars in Additional Interest
Fiscal Year 2022 Statutory Review of Compliance With
2022-30-060
Notice of Federal Tax Lien Filing Due Process Procedures
April 1, 2022 – September 30, 2022 │ 73
Reliance on Self-Certifications Resulted in Federal Agencies
Awarding Contracts and Grants to Entities With Delinquent
2022-10-066
Federal Taxes; However, the IRS Is Making Progress on
Establishing the Federal Contractor Tax Check System
Reliability of Information:
Fiscal Year 2022 Statutory Review of six cases impacted
2022-30-056
Potential Fair Tax Collection Practices Violations
Taxpayer Rights and Entitlements 61
Fiscal Year 2022 Statutory Review of Disclosure of Taxpayer Burden:
2022-30-058
Collection Activity With Respect to Joint Returns eight taxpayers impacted
The Process for Tracking Physical Security Weaknesses Reliability of Information and Protection of
2022-10-046 Identified in IRS Facilities Does Not Ensure That Resources 62
Vulnerabilities Are Properly Addressed
Reliability of Information:
90 payments totaling $37,363,342;
Additional Actions Are Needed to Ensure Taxpayer Revenue Protection:
2022-34-062 37 payments totaling $58,091,350
Compliance With the Section 965 Repatriation Tax
Increased Revenue:
$6,265,523 impacting 19 S Corporation
shareholders
Fiscal Year 2022 Statutory Review of Compliance With Taxpayer Rights and Entitlements:
2022-30-061
Legal Guidelines When Issuing Levies 1,364 taxpayers impacted
Delays in Management Actions Contribute to the Continued
2022-46-057
Tax Processing Center Backlogs
Cost Savings (Funds Put to Better Use):
$267,203,496
Taxpayer Rights and Entitlements:
$727,794,113 impacting 1,927,433
American Rescue Plan Act: Accuracy of Advance Child Tax payments
2022-47-070
Credit Periodic Payments
Reliability of Information:
$4,176,294 impacting 11,216 taxpayers
Reliability of Information:
1,610 taxpayers impacted
61 Taxpayer information is redacted from the underlying report because TIGTA has determined that it is tax return
information related to taxpayer privacy.
62 Information is redacted because TIGTA has determined that it is law enforcement information related to the
physical safety of IRS facilities.
74 │ April 1, 2022 – September 30, 2022
Protection of Resources:
43 production servers impacted
Reliability of Information:
Taxpayer Digital Communications Platform Security and 15 security vulnerabilities impacted
2022-20-051
Access Controls Need to Be Strengthened
Reliability of Information:
498 incorrect authorizations impacted
Protection of Resources:
681 users impacted
Improvements Are Needed for an Effective User Behavior Protection of Resources:
2022-20-055
Analytics Capability 234 systems impacted
Reporting on the Use of Coronavirus Response Funding
2022-16-069
Could Be Enhanced
The End-User Incident Management Process Can Be
2022-20-053
Improved
Cloud Services Were Implemented Without Key Security
2022-20-052
Controls, Placing Taxpayer Data at Risk
Fiscal Year 2022 Statutory Audit of Compliance With Legal
2022-30-067 Guidelines Restricting the Use of Records of Tax
Enforcement Results
Review of the IRS’s Enforcement Program for Tax Exempt Reliability of Information:
2022-10-064 Organizations That Participate in Illegal or Nonexempt 3,956 referral cases impacted
Activities
The IRS Needs to Improve Its Database Vulnerability Protection of Resources 63
2022-20-065
Scanning and Patching Controls
Mainframe Platform Configuration Compliance Controls Reliability of Information 64
2022-20-050
Need Improvement
63 Outcome measure details are redacted because TIGTA has determined that it contains law enforcement
techniques/procedures and guidelines for law enforcement investigations or prosecutions.
64 Outcome measure details are redacted because TIGTA has determined that it contains law enforcement
techniques/procedures and guidelines for law enforcement investigations or prosecutions.
April 1, 2022 – September 30, 2022 │ 75
Appendix III
TIGTA’s Statutory Reporting Requirements
The following table reflects the FY 2022 statutory reviews.
Reference to
Explanation of the Provision Comments/TIGTA Audit Status
Statutory Coverage
Report No. 2022-30-067; Sept. 2022
TIGTA identified instances of
noncompliance with RRA 98 § 1204
requirements. Specifically, TIGTA
Requires TIGTA to evaluate the IRS’s identified the following noncompliance:
compliance with restrictions under 12 instances in which a Record of Tax
Enforcement Statistics
RRA 98 § 1204 on the use of Enforcement Results was used to
I.R.C. § 7803(d)(1)(A) enforcement statistics to evaluate IRS evaluate an employee § 1204(a), and
employees. 12 instances in which IRS management
failed to either maintain the retention
standard documentation or ensure that
it was appropriately signed (§ 1204(b)).
Additionally, the IRS self-reported one
instance of § 1204(a) noncompliance.
Report No. 2022-30-054; Aug. 2022
TIGTA reviewed a sample of 105
taxpayers and found no instances in
Requires TIGTA to evaluate the IRS’s which the Field Collection employee
Restrictions on Directly Contacting compliance with restrictions under violated a taxpayer’s rights under I.R.C.
Taxpayers I.R.C. § 7521 on directly contacting § 7521 and fair tax collection practices
taxpayers who have indicated they of I.R.C. § 6304(a)(2). However, while
I.R.C. § 7803(d)(1)(A)(ii) prefer their representatives be the majority of Field Collection
contacted. employees appeared to be familiar with
the direct contact provisions and fair
tax collection practices, not all revenue
officers are familiar with the
requirements of the provisions.
Report No. 2022-30-060; Sept. 2022
Tests of a statistically valid sample of
117 Notice of Federal Tax Liens
determined that the IRS did not always
timely mail the Notice of Federal Tax
Requires TIGTA to evaluate the IRS’s Lien filings and Collection Due Process
Filing of a Notice of Lien compliance with required procedures appeal rights to the taxpayers’ last
under I.R.C. § 6320(a) upon the filing of known addresses due to a
I.R.C. § 7803(d)(1)(A)(iii)
a notice of lien. programming error that has since been
corrected. Additionally, tests of a
judgmental sample of 34 undelivered
lien notices identified five cases for
which the address on the original lien
notice and the address on the IRS
computer system did not agree.
76 │ April 1, 2022 – September 30, 2022
Reference to
Explanation of the Provision Comments/TIGTA Audit Status
Statutory Coverage
Report No. 2022-IE-R005; Sept. 2022
TIGTA’s review of a statistical sample of
Requires TIGTA to include information 39 closed taxpayer audit files with
Extensions of the Statute of regarding extensions of the statute of assessment statute extensions found
Limitations for Assessment of Tax limitations for assessment of tax under that the IRS complied with I.R.C. §
I.R.C. § 6501 and the provision of notice 6501(c)(4)(B). However, the IRS
I.R.C. § 7803(d)(1)(C) continues to be unable to locate the
to taxpayers regarding the right to refuse
I.R.C. § 6501(c)(4)(B) or limit the extension of particular issues majority of paper documents
or a particular period of time. requested. Specifically, the IRS was
unable to provide the majority of
taxpayer audit files requested during
our review.
Report No. 2022-30-061; Sept. 2022
TIGTA reviewed levies issued for
57,775 taxpayers by IRS Collection
functions during the period October 1,
Levies Requires TIGTA to evaluate the IRS’s 2020, through September 30, 2021,
compliance with required procedures and found that the IRS generally
I.R.C. § 7803(d)(1)(A)(iv) under I.R.C. § 6330 regarding levies. complied with legal and administrative
requirements. However, there were
some instances of noncompliance in
which an estimated 190 taxpayers’
rights were potentially violated.
Report No. 2022-10-043; Aug. 2022
Similar to prior audits, TIGTA identified
processing errors in 18 (20 percent) of
91 sampled taxpayer cases. For
Requires TIGTA to evaluate the IRS’s example, taxpayer accounts had errors
Collection Due Process compliance with required procedures due to incorrectly input Collection
under I.R.C. §§ 6320 and 6330 Statute Expiration Date suspension
I.R.C. §§ 7803(d)(1)(A)(iii) and (iv) regarding taxpayers’ rights to appeal lien start and stop dates. In some cases,
or levy actions. the IRS incorrectly extended the time
period, allowing the IRS additional time
to collect delinquent taxes. In other
cases, the IRS incorrectly decreased
the time to collect delinquent taxes.
Report No. 2022-30-038; June 2022
TIGTA reviewed 74 of the 97 seizures
the IRS conducted from July 1, 2020,
Requires TIGTA to evaluate the IRS’s through June 30, 2021. The IRS
Seizures compliance with required procedures generally adhered to procedures that
I.R.C. § 7803(d)(1)(A)(iv) under I.R.C. §§ 6330 through 6344 help ensure compliance with I.R.C. §§
when conducting seizures. 6330 through 6344. However, TIGTA
identified some instances in which the
IRS did not comply with a particular
internal procedure requirement.
April 1, 2022 – September 30, 2022 │ 77
Reference to
Explanation of the Provision Comments/TIGTA Audit Status
Statutory Coverage
Report No. 2022-IE-R004; Sept. 2022
TIGTA’s review of taxpayer accounts on
both the Individual and Business
Master Files showed that the IRS did
not reintroduce past Illegal Tax
Protester codes or similar designations
on taxpayer accounts during FY 2021.
However, TIGTA’s review of over
Taxpayer Designations – Illegal Tax 70 million narrative records created
Protester Designation and Similar An evaluation of the IRS’s compliance during FY 2021 in the Accounts
Designations with restrictions under RRA 98 § 3707 Management Services system found
on designation of taxpayers. that employees referenced the term
I.R.C. § 7803(d)(1)(A)(v)
Illegal Tax Protester or similar
designation on six records for six
different taxpayers. Further, TIGTA
reviewed 25,857 narrative records
from the Criminal Investigation
Management Information System and
identified 10 records that used the
term Illegal Tax Protester or similar
designations.
Report No. 2022-30-058; Sept. 2022
TIGTA reviewed case files from the
Disclosure of Collection Activity With Requires TIGTA to review and certify Independent Office of Appeals and the
Respect to Joint Returns whether the IRS is complying with Taxpayer Advocate Service to
I.R.C. § 6103(e)(8), which requires the determine whether employees followed
I.R.C. § 7803(d)(1)(B) (TIGTA the joint return disclosure requirements
IRS to disclose information to an
requirement) on collection information
individual filing a joint return on
I.R.C. § 6103(e)(8) (IRS collection activity involving the other requests. TIGTA determined that
requirement) individual filing the return. disclosure requirements were not
followed in eight (7 percent) of 122
Independent Office of Appeals
employees’ history files.
Requires TIGTA to include in each
Semiannual Report to Congress the
number of taxpayer complaints received
Taxpayer Complaints Statistical results on the number of
and the number of employee
taxpayer complaints received are
I.R.C. § 7803(d)(2)(A) misconduct and taxpayer abuse
shown on page 49.
allegations received by the IRS or TIGTA
from taxpayers, IRS employees, and
other sources.
78 │ April 1, 2022 – September 30, 2022
Reference to
Explanation of the Provision Comments/TIGTA Audit Status
Statutory Coverage
Report No. 2022-30-056; Sept. 2022
TIGTA’s review of 35 employee
misconduct cases coded as Fair Tax
Administrative or Civil Actions With Collection Practices (FTCP) violations
Requires TIGTA to include information identified four cases that were
Respect to the Tax Collection regarding any administrative or civil
Practices Act of 1996 incorrectly coded as FTCP violations. In
actions with respect to violation of addition, our review of 167 SB/SE
I.R.C. § 7803(d)(1)(G) the fair debt collection provision of Division employee misconduct cases
I.R.C. § 6304, including a summary of closed in FY 2021 that could potentially
I.R.C. § 6304 such actions and any resulting relate to violations of taxpayers’ FTCP
RRA 98 § 3466 judgments or awards granted. rights (but were not coded as FTCP
potential violations) identified two
cases that should have been coded as
FTCP violations by labor relations
specialists.
Report No. 2022-10-044; July 2022
TIGTA reviewed a statistical sample of
83 of the 3,188 FY 2021 Freedom of
Information Act (FOIA) requests for
which the IRS denied the requested
information either partially or fully
based on exemption (b)(7), replied that
Requires TIGTA to include information no responsive records were available,
regarding improper denial of requests or closed the request as imperfect.
Denials of Requests for Information for information from the IRS, based on a TIGTA also reviewed all 34
statistically valid sample of the total FY 2021 I.R.C. § 6103(c) and (e)
I.R.C. § 7803(d)(1)(F)
number of determinations made by the requests documented in FOIAXpress for
I.R.C. § 7803(d)(3)(A) IRS to deny written requests to disclose which the IRS withheld information
information to taxpayers on the basis of from the requestor. While TIGTA
I.R.C. § 6103 or 5 U.S.C. § 552(b)(7). determined that information was
properly withheld or released in most
cases, the Disclosure Office did not
follow FOIA requirements when
withholding or releasing information for
13 (16 percent) cases. The Disclosure
Office properly processed all 34 I.R.C. §
6103(c) and (e) requests.
April 1, 2022 – September 30, 2022 │ 79
Reference to
Explanation of the Provision Comments/TIGTA Audit Status
Statutory Coverage
Information Technology Reviews:
Report No. 2022-20-001; Nov. 2021
Report No. 2022-20-005; Dec. 2021
Report No. 2022-25-029; Mar. 2022
Report No. 2022-47-023; Mar. 2022
Report No. 2022-27-028; May 2022
Report No. 2022-46-032; May 2022
Report No. 2022-IE-R003; May 2022
Report No. 2022-47-042; July 2022
Report No. 2022-27-045; Sept. 2021
Report No. 2022-20-055; Sept. 2022
Adequacy and Security of the
Technology of the IRS Requires TIGTA to evaluate the IRS’s Report No. 2022-20-053; Sept. 2022
adequacy and security of its technology.
I.R.C. § 7803(d)(1)(D)
Security Reviews:
Report No. 2022-20-005; Dec. 2021
Report No. 2022-20-006; Dec. 2021
Report No. 2022-20-007; Dec. 2021
Report No. 2022-20-009; Feb. 2022
Report No. 2022-20-010; Feb. 2022
Report No. 2022-20-040; July 2022
Report No. 2022-20-051; Sept. 2022
Report No. 2022-20-065; Sept. 2022
Report No. 2022-20-050; Sept. 2022
Report No. 2022-20-052; Sept. 2022
Report No. 2022-10-017; Jan. 2022
TIGTA’s review of the IRS’s purchase
card program found that controls are
generally effective, and the number of
purchase card violations identified by
Government Charge Card Abuse the IRS Credit Card Services Branch
Prevention Act of 2012 were minimal and generally for nominal
Requires TIGTA to report on the IRS’s amounts.
Pub. L. No. 112-194, 126 Stat. progress in implementing purchase and
1445 (codified as amended at travel card audit recommendations. Report No. 2022-10-047; July 2022
5 U.S.C. § 5701 note, 10 U.S.C.
§ 2784, and 41 § U.S.C. 1909) TIGTA’s review of the IRS’s purchase
card program found that controls are
generally effective, and the number of
purchase card violations identified by
the IRS Credit Card Services Branch
were minimal and generally for nominal
amounts.
80 │ April 1, 2022 – September 30, 2022
Reference to
Explanation of the Provision Comments/TIGTA Audit Status
Statutory Coverage
Report No. 2022-40-037; May 2022
The IRS was generally compliant with
the reporting requirements contained
in the Payment Integrity Information Act
of 2019 for FY 2021. However, TIGTA
found that the IRS inaccurately
assessed the risk for the U.S.
Improper Payments Elimination and Coronavirus EIP program as not
Requires TIGTA to assess the IRS’s susceptible to improper payments
Recovery Act of 2010 compliance with improper payment despite reports issued by TIGTA
31 U.S.C. § 3321 requirements. suggesting otherwise. In addition, the
IRS did not complete a risk assessment
for the Sick and Paid Family Leave
Credit and the Employee Retention Tax
Credit as required. Also, the IRS did not
calculate and report the dollar amount
and percentage rate of improper
payments for the Net Premium Tax
Credit for FY 2021.
Report No. 2022-10-003; Oct. 2021
The IRS submitted its FY 2020 third
quarter spending data by July 2020, as
Digital Accountability and required, for publication on
Transparency Act of 2014 USAspending.gov. In addition, based
Requires TIGTA to assess the on the standardized assessment
(DATA Act) completeness, timeliness, quality, and methodology used across Offices of
Pub. L. No. 113-101, 128 Stat. accuracy of data that the IRS submits to Inspectors General, the IRS earned an
1124 (codified at 31 U.S.C. comply with the DATA Act. overall rating of “Excellent” for data
§§ 3512, 3716, and 6101 note) quality, the highest of four possible
ratings. However, TIGTA’s review of a
statistical sample of 77 transactions
found some individual data elements
had high error rates.
Office of National Drug Control Policy Report No. 2022-10-016; Jan. 2022
(ONDCP) Detailed Accounting
Submission and Assertions TIGTA is not aware of any material
Requires TIGTA to authenticate the IRS’s modifications that should be made to
National Drug Enforcement Policy the assertions in the IRS’s FY 2021
ONDCP detailed accounting submission
21 U.S.C. § 1704(d) and the Office Budget Formulation Compliance Report
and assertions.
of National Drug Control Policy and Detailed Accounting Report in
Circular titled Drug Control order for them to be in accordance with
Accounting (May 1, 2007) the ONDCP Circular.
April 1, 2022 – September 30, 2022 │ 81
Reference to
Explanation of the Provision Comments/TIGTA Audit Status
Statutory Coverage
Report No. 2022-40-013; Jan. 2022
TIGTA continues to find that IRS
processes and procedures do not
ensure that ITINs are only issued to
individuals who have a Federal income
tax need. The IRS has addressed 10 of
the 13 agreed recommendations from
Protecting Americans From Tax TIGTA’s prior report. However,
Hikes Act of 2015 additional action is needed to address
Requires TIGTA to conduct an audit of
Pub. L. No. 114-11.3, 129 Stat. the issuance of ITINs. the three remaining agreed
2242 (2015) recommendations. These include
improving processes to prevent the
duplicate use of entity information (e.g.,
name, date of birth, and country of
birth) or supporting documents to
obtain an ITIN and establishing
processes to identify and address
retroactive tax credit claims that are
processed incorrectly.
82 │ April 1, 2022 – September 30, 2022
Appendix IV
Inspector General Peer Review Activity
This appendix implements § 989C of the Dodd-Frank Wall Street Reform and Consumer
Protection Act. 65
For the period April 1, 2022 – September 30, 2022:
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
During this reporting period, TIGTA’s Office of Inspections and Evaluation conducted a peer
review of the Federal Housing Finance Agency, Office of Inspector General. The final report
was issued on September 8, 2022.
Outstanding Recommendations From Peer Reviews Conducted by TIGTA
There are no outstanding recommendations from peer reviews conducted by TIGTA.
65 Pub. L. 111-203, 124 Stat. 1376, 1945-46 (2010) (codified at 5 U.S.C. App. §5(a)(14)-(16)).
April 1, 2022 – September 30, 2022 │ 83
Appendix V
Data Tables Provided by the Internal Revenue Service
The memorandum copied below is the IRS’s transmittal to TIGTA. The tables that follow the
memorandum contain information that the IRS provided to TIGTA and consist of IRS employee
misconduct reports from the IRS Automated Labor and Employee Relations Tracking System
(ALERTS) for the period April 1, 2022, through September 30, 2022. Also, data concerning
substantiated RRA 98 § 1203 allegations for the same period are included. See Appendix VI
for § 1203 Standards. IRS management conducted inquiries into the cases reflected in these
tables.
Internal Revenue Service Memorandum
The Following Tables Are Provided by the IRS:
84 │ April 1, 2022 – September 30, 2022
Report of Employee Misconduct by Disposition Groups
Employee Employee Tax TIGTA Report
Administrative
Disposition Character Compliance of Totals
Case
Investigation Case Investigation
REMOVAL (PROBATION PERIOD COMPLETE) 50 0 10 29 89
REMOVAL AT OPM DIRECTION 0 10 0 0 10
PROBATION/SEPARATION 216 7 0 4 227
SEPARATION OF TEMPORARY EMPLOYEE 0 0 0 0 0
RESIGNATION, RETIREMENT, ETC.
(REASON NOTED ON SF50)
27 0 9 17 53
RESIGNATION, RETIREMENT, ETC. (REASON
114 9 22 20 165
NOT NOTED ON SF50)
SUSPENSION, 14 DAYS OR LESS 80 0 46 33 159
SUSPENSION, MORE THAN 14 DAYS 21 0 13 7 41
INDEFINITE SUSPENSION 4 0 0 0 4
REPRIMAND 82 0 27 36 145
ADMONISHMENT 110 0 88 21 219
WRITTEN COUNSELING 63 14 135 19 231
ORAL COUNSELING 10 0 4 0 14
ALTERNATIVE DISCIPLINE: IN LIEU OF
REPRIMAND
5 0 0 0 5
ALTERNATIVE DISCIPLINE: IN LIEU OF
SUSPENSION
5 0 0 0 5
CLEARANCE LETTER 27 0 13 21 61
CLOSED WITHOUT ACTION CAUTIONARY
LETTER
72 107 77 57 313
CLOSED WITHOUT ACTION LETTER 58 15 18 42 133
TERMINATION FOR ABANDONMENT OF
POSITION
41 0 0 0 41
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 32 0 0 0 32
TOTAL 1,017 162 462 306 1,947
Source: ALERTS (extract date: October 3, 2022). 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.
April 1, 2022 – September 30, 2022 │ 85
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
1,063 1,278 1,225 10 0 1,103
Case
Employee
Character 86 189 196 0 0 78
Investigation
Employee Tax
Compliance 507 678 510 33 0 642
Case
TIGTA Report of
416 398 431 4 0 379
Investigation
Total 2,072 2,543 2,362 47 0 2,202
Source: ALERTS (extract date: October 3, 2022). 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.
86 │ April 1, 2022 – September 30, 2022
Summary of Substantiated I.R.C. Section 1203
Inquiries Recorded in ALERTS
Removed In
Resigned/ Probation Penalty
§ 1203 Violation Removals On Other Personnel Total
Retired Separation Mitigated
Grounds Process
1203(b)(2): FALSE 0 0 0 0 0 0 0
STATEMENT UNDER OATH
1203(b)(3): CIVIL 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 9 5 0 0 19 71 104
UNTIMELY RETURN
1203(b)(9): WILLFUL 10 0 0 6 19 33 68
UNDERSTATED TAX
1203(b)(10): THREAT OF 0 0 0 0 0 0 0
AUDIT FOR PERSONAL GAIN
Total 19 5 0 6 38 104 172
Source: ALERTS (extract date: October 3, 2022). 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.
April 1, 2022 – September 30, 2022 │ 87
Appendix VI
Section 1203 Standards
In general, the IRS Commissioner shall terminate any IRS employee if there is a final
administrative or judicial determination that, in the performance of official duties, such
employee committed any misconduct violations outlined below. Such termination shall be a
removal for cause on charges of misconduct.
Misconduct violations include:
• Willfully failing to obtain the required approval signatures on documents authorizing the
seizure of a taxpayer’s home, personal belongings, or business assets;
• Providing a false statement under oath with respect to a material matter involving a
taxpayer or taxpayer representative;
• Violating, with respect to a taxpayer, taxpayer representative, or other employee of the
IRS, any right under the Constitution of the United States, or any civil right established
under Title VI or VII of the Civil Rights Act of 1964; Title IX of the Education Amendments
of 1972; Age Discrimination in Employment Act of 1967; Age Discrimination Act of 1975;
Section 501 or 504 of the Rehabilitation Act of 1973; or Title I of the Americans With
Disabilities Act of 1990;
• Falsifying or destroying documents to conceal mistakes made by any employee with
respect to a matter involving a taxpayer or taxpayer representative;
• Committing assault or battery on a taxpayer, taxpayer representative, or another
employee of the IRS, but only if there is a criminal conviction or a final judgment by a
court in a civil case with respect to the assault or battery;
• Violating the I.R.C., the Treasury Department 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.
88 │ April 1, 2022 – September 30, 2022
Glossary of Acronyms
ALERTS Automated Labor and Employee Relations Tracking System
ARPA American Rescue Plan Act of 2021
CARES Act Coronavirus Aid, Relief, and Economic Security Act
CNC Currently Not Collectible
COVID-19 Coronavirus Disease 2019
CTC Child Tax Credit
CY Calendar Year
DATA Act Digital Accountability and Transparency Act of 2014
EIP Economic Impact Payments
EO Exempt Organizations and Government Entities
ERC Employee Retention Credits
FOIA Freedom of Information Act
FTCP Fair Tax Collection Practices
FY Fiscal Year
IRA Inflation Reduction Act of 2022
I.R.C. Internal Revenue Code
IRM Internal Revenue Manual
IRS Internal Revenue Service
ISC Interagency Security Committee
ITIN Individual Taxpayer Identification Number
LB&I Large Business and International
LLC Limited Liability Company
MSP Managed Service Provider
April 1, 2022 – September 30, 2022 │ 89
NOL Net Operating Loss
OA Office of Audit
OI Office of Investigations
ONDCP Office of National Drug Control Policy
PDC Private Debt Collection
PII Personally Identifiable Information
PPIA Partial Payment Installment Agreements
QOF Qualified Opportunity Funds
RRA 98 Restructuring and Reform Act of 1998
RRC Recovery Rebate Credit
SADI Secure Access Digital Identity
SB/SE Small Business/Self-Employed
TDC Taxpayer Digital Communications
TIGTA Treasury Inspector General for Tax Administration
TY Tax Year
UBAC User Behavior Analytics Capability
U.S.C. United States Code
90 │ April 1, 2022 – September 30, 2022
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File and source
- File
- REPORT_TIGTA_Semiannual-Report-to-Congress_sep2022.pdf
- Size
- 2,613,846 bytes
- SHA-256
- ca57dd029292d03bb98a6bcecce3956b9f584f3e501e08ee691307a4ad46a1ac
- Original
- No public link identified.