TIGTA Semiannual Report to Congress, April 1, 2023 through September 30, 2023
Summary
The Semiannual Report to Congress of the Treasury Inspector General for Tax Administration (TIGTA) for April 1, 2023 – September 30, 2023, opening with a message from Acting Inspector General Heather M. Hill. The message refers to the almost $78 billion in supplemental funding the IRS received from the Inflation Reduction Act through September 30, 2031, and the $403 million TIGTA received. For the period, the Office of Audit issued 47 reports, the Office of Inspections and Evaluations 9 reports and the Office of Investigations completed 1,054 investigations, with monetary benefits totaling more than $6.8 billion. A footnote states that approximately $1.4 billion in IRA funding was later rescinded under the Fiscal Responsibility Act of 2023. Highlighted reports include IRS processes for examining presidential tax returns.
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4│ April 1, 2023 – September 30, 2023
Acting Inspector General’s Message to Congress
In this Semiannual Report to Congress, I am pleased to share
some accomplishments the Treasury Inspector General for Tax
Administration (TIGTA) achieved during the April 1 through
September 30, 2023, reporting period. Several of the
accomplishments include TIGTA’s work providing oversight of
the Internal Revenue Service (IRS) and the almost $78 billion
in supplemental funding the IRS received from the Inflation
Reduction Act (IRA) through September 30, 2031. 1
With IRA funding lasting for eight more years, TIGTA’s work
and reporting will be ongoing. We will use the $403 million
in supplemental IRA funding that we received to continue our
enhanced oversight of the IRS’s taxpayer services,
enforcement, operations support, business systems
modernization, and reporting requirements. Supplemental
funds will also help support TIGTA’s business operations.
We especially want to draw attention to the IRA section of this semiannual report. This
section highlights several audit reports and evaluations completed during this reporting
period. Two of the reports highlighted discuss IRA interim results and the IRS’s efforts to show
improvements during the 2023 Filing Season. Other IRA reports highlighted call for the IRS to
take action on Taxpayer Assistance Centers and the information they provide to taxpayers;
encourage the IRS to leverage in-house training for revenue agents examining high-income
taxpayers; and assess the IRS’s audit selection process for the Qualified Plug-In Electric Drive
Motor Vehicle Credit. As we move forward, we plan to share ongoing IRA oversight efforts in
our semiannual reporting to Congress and on TIGTA.gov.
Highlights From This Reporting Period
For this reporting period, our Office of Audit issued 47 reports; Office of Inspections and
Evaluations issued 9 reports; and Office of Investigations completed 1,054 investigations.
TIGTA’s combined audit and investigative efforts resulted in the recovery, protection, and
identification of monetary benefits totaling more than $6.8 billion.
Additional highlights from our audit and evaluation work include reports that address
improving taxpayer services, IRS efforts to hire employees to conduct audits of high earners
and large businesses, protection of taxpayer data, and IRS processes for examining
presidential tax returns.
1 The IRS received approximately $79.4 billion in supplemental funding from the Inflation Reduction Act of 2022 (Pub. L. No.
117-169, 136 Stat. 1818). Approximately $1.4 billion in IRA funding was later rescinded under the Fiscal Responsibility Act
of 2023 (Pub. L. No. 118-5, 137 Stat. 10). The available IRA supplemental funding was reduced to approximately $78 billion.
April 1, 2023 – September 30, 2023 │3
Our investigative highlights include several cases that involve persons sentenced for schemes
to defraud the IRS, commit identity theft, and impersonate an IRS representative. In one such
scheme, in the District of Arizona, a woman was arrested for conspiracy to defraud, theft of
public money, and conspiracy to commit money laundering, transferring more than
$2.5 million in fraudulent 2019 tax refunds to obtain Bitcoin. 2
We remain vigilant in our efforts to oversee how the IRS spends IRA funds and implements
programs resulting from the increased funding. We are committed to working with Congress,
the Administration, the IRS, and other stakeholders to ensure the effective and efficient
administration of our Nation’s tax system.
Sincerely,
Heather M. Hill
Acting Inspector General
2 Facts in the summarized case narrative come from court documents of the jurisdiction named.
4│ April 1, 2023 – September 30, 2023
Table of Contents
Acting Inspector General’s Message to Congress ............................................................................... 3
TIGTA’s Profile ........................................................................................................................................ 7
Statutory Mandate ....................................................................................................................... 7
Organizational Structure ............................................................................................................. 8
Authorities .................................................................................................................................... 8
Inflation Reduction Act Oversight Activities .......................................................................................... 9
Promote the Economy, Efficiency, and Effectiveness of Tax Administration ..................................... 13
Improving Taxpayer Service ....................................................................................................... 14
Protecting Taxpayer Data and IRS Resources .......................................................................... 16
Administering Tax Law Changes ................................................................................................ 18
Increasing Domestic and International Tax Compliance and Enforcement ........................... 19
Advance Oversight of America’s Tax System........................................................................................ 22
Protect the Integrity of Tax Administration ........................................................................................... 27
The Performance Model .............................................................................................................. 27
Performance Area: Employee Integrity ....................................................................................... 28
Performance Area: Employee and Infrastructure Security........................................................ 29
Performance Area: External Attempts to Corrupt Tax Administration ...................................... 31
Investigations Statistical Reports ......................................................................................................... 35
Significant Investigative Achievements...................................................................................... 35
Summary of Investigative Reports and Criminal Referrals ....................................................... 37
Summary of Activity Relating to Complaints of Human Trafficking .......................................... 37
Interference ................................................................................................................................. 37
Instances of Whistleblower Retaliation ...................................................................................... 37
Closed Investigations Involving IRS Senior Government Employees ....................................... 38
Audit Statistical Reports ........................................................................................................................ 39
Audit Reports With Unimplemented Corrective Actions ............................................................ 39
Inspections and Evaluations Statistical Reports.................................................................................. 52
Evaluation Reports With Unimplemented Corrective Actions ................................................... 52
Appendices
Appendix I – Other Reports ................................................................................................................... 54
Appendix II – Audit Products ................................................................................................................. 56
Appendix III – Inspections and Evaluations Products .......................................................................... 59
Appendix IV – TIGTA’s Statutory Reporting Requirements .................................................................. 60
April 1, 2023 – September 30, 2023│ 5
Appendix V – Inspector General Peer Review Activity ......................................................................... 66
Appendix VI – Data Tables Provided by the Internal Revenue Service............................................... 68
Internal Revenue Service Memorandum ................................................................................... 68
Report of Employee Misconduct by Disposition Groups ........................................................... 69
Report of Employee Misconduct National Summary................................................................. 70
Summary of Substantiated I.R.C. Section 1203 Inquiries Recorded in ALERTS ..................... 71
Appendix VII – Section 1203 Standards .............................................................................................. 72
Glossary of Abbreviations ...................................................................................................................... 73
6 │April 1, 2023 – September 30, 2023
TIGTA’s Profile
The Treasury Inspector General for Tax Administration (TIGTA) provides audit, investigative,
and inspection and evaluation services that promote economy, efficiency, and integrity in
the administration of the Internal Revenue laws. TIGTA provides independent oversight of
matters of the Department of the Treasury (Treasury Department) involving activities of the
Internal Revenue Service (IRS), the IRS Oversight Board, and the IRS Office of Chief
Counsel. Although TIGTA is placed organizationally within the Treasury Department and
reports to the Secretary of the Treasury and to Congress, it functions independently from
all other offices and bureaus within the Treasury Department.
Statutory Mandate
Protect against IRS employee improprieties and external attempts to corrupt
or threaten IRS employees.
Provide policy direction and conduct, supervise, and coordinate audits and
investigations related to IRS programs and operations.
Review existing and proposed legislation and regulations related to IRS
programs and operations, and make recommendations concerning the impact
of such legislation or regulations.
Promote economy and efficiency in the administration of tax laws.
Prevent and detect waste, fraud, and abuse in IRS programs and operations.
Inform the Secretary of the Treasury and Congress of problems and
deficiencies identified and of the progress made in resolving them.
TIGTA oversees all aspects of activity related to the Federal tax system as administered by
the IRS. TIGTA protects the public’s confidence in the tax system by identifying and
recommending strategies for addressing the IRS’s management challenges and
implementing the priorities of the Treasury Department.
TIGTA’s organizational structure (see following page) is comprised of the Office of the
Inspector General and six functional offices: the Office of Audit; the Office of Inspections
and Evaluations; the Office of Investigations; the Office of Mission Support; the Office of
Information Technology; and the Office of Chief Counsel.
April 1, 2023 – September 30, 2023│ 7
Organizational Structure
Authorities
TIGTA has all of the authorities granted under the Inspector General Act of 1978 (Inspector
General Act). 3 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 appropriate. 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) 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). 4
3 5 United States Code (U.S.C.). § 401, et seq.
4 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, 2023 – September 30, 2023
Inflation Reduction Act Oversight Activities
On August 16, 2022, the President signed the Inflation
Reduction Act of 2022 (IRA) into law. 5 The legislation
authorized approximately $79.4 billion in supplemental
funding for the IRS through September 30, 2031.
Approximately $1.4 billion in IRA funding was later
rescinded under the Fiscal Responsibility Act of 2023,
which reduced the IRS’s supplemental funding to almost
$78 billion. 6 The IRS will use the supplemental funding to
improve taxpayer services, update antiquated computer
systems, and increase compliance and enforcement actions against high-income taxpayers
and large corporations that try to evade taxes.
TIGTA received $403 million in supplemental funding from the IRA through
September 30, 2031. The IRA funds will be used to provide oversight of the IRS and to
support TIGTA’s operations. More information about TIGTA’s IRA oversight activities is
available on TIGTA.gov.
The following summaries highlight several TIGTA reviews examining the IRS and its use of
IRA funding.
Interim Results of the 2023 Filing Season (Report Number 2023-40-029)
During the 2023 Filing Season, the IRS made significant progress to reduce backlogged tax
return inventories closer to levels maintained prior to the Coronavirus Disease 2019
pandemic (pandemic). For example, more than 2 million individual tax returns and
transactions remained in inventory as of the end of Calendar Year (CY) 2022, compared to
more than 8.4 million as of the end of CY 2021. This backlogged work will continue to have
a significant impact on associated taxpayers.
IRS management stated that for the first time since the pandemic began, individual tax
return processing and related activities are returning to normal timeliness goals. The IRS
cleared the carryover inventory of unprocessed individual tax returns received during
CY 2022 by February 4, 2023. However, the IRS continues to have backlogs in other
inventory categories.
The primary legislation affecting the 2023 Filing Season was the IRA. Most IRA tax
provisions affect future tax years. However, a small number of provisions affected individual
tax filers for Tax Year (TY) 2022. Table 1 identifies the three provisions most relevant to the
2023 Filing Season and provides the estimated tax impact for each provision for CYs 2023
through 2026.
5 Pub. L. No. 117-169, 136 Stat. 1818.
6 Pub. L. No. 118-5, 137 Stat. 10.
April 1, 2023 – September 30, 2023│ 9
Table 1: Summary of IRA Provisions Affecting the 2023 Filing Season
Provision Overview of Related Provisions Tax Impact
CYs 2023–2026
Energy Efficient Renamed and replaced the existing Nonbusiness $5.9 billion
Home Improvement Energy Property Credit, and extended the credit
Credit (13301) through December 31, 2032.
Residential Clean Renamed and replaced the existing Residential Energy $6.9 billion
Energy Credit Efficient Property Credit, and increased the credit rate to
(13302) 30 percent for property placed into service beginning in
TY 2022.
Clean Vehicle Credit Renamed and replaced the existing Qualified Plug-In $1.8 billion
(13401) Electric Drive Motor Vehicle Credit. For TY 2022, transition
rules for the requirement that qualifying vehicles must
undergo final assembly in North America apply for vehicles
placed into service on or after August 16, 2022.
Source: The IRA and the Joint Committee on Taxation JCX-18-22.
This report provided interim information only. No recommendations were made.
The IRS Needs to Leverage the Most Effective Training for Revenue Agents
Examining High-Income Taxpayers (Report Number 2023-30-054)
In August 2022, the Secretary of the Treasury stated that IRA funding was intended in part
to increase examinations of high-income taxpayers. The Secretary also directed that no
additional resources, including any new hires, shall be used to increase the share of small
businesses or households below the $400,000 threshold that are audited relative to
historical levels. In the report, TIGTA assessed the IRS’s strategy to train employees hired
specifically to conduct audits of high earners and large businesses that underreport income.
TIGTA found that while the Large Business and International
(LB&I) Division has expertise in training revenue agents on
examining high-income taxpayers, IRS efforts to train new
hires do not appear to be fully leveraging this expertise. The
IRS treats this training as specialized and only offers it when
necessary for employees auditing in this area. As the IRS
prioritizes examinations of high-income taxpayers with IRA
funding, it should leverage the specialized training and provide
it to an expanded pool of revenue agents. In other words, the
IRS’s approach to training should be commensurate with the
significant enforcement funding and the purposes for which it
was provided.
In addition, TIGTA found that the IRS does not have a unified or updated definition for
individual high-income taxpayers. The Tax Reform Act of 1976 required annual publication
10 │April 1, 2023 – September 30, 2023
of data on individual income tax returns reporting income of $200,000 or more. The current
examination activity code schema still uses $200,000 as the main threshold. TIGTA stated
that at a minimum, the IRS should accept the Treasury Secretary’s $400,000 directive as
the new high-income floor on which IRS leadership can focus enforcement efforts.
TIGTA made six recommendations, including that the IRS leverage the LB&I Division’s
extensive knowledge base by embracing its current high-income individual training content
and ensure that examination plans follow the Secretary of Treasury’s Directive to prioritize
coverage of individual high-income earners over $400,000. The IRS agreed or partially
agreed with five of the six recommendations and disagreed with one recommendation.
Opportunities Exist to Improve the Audit Selection Process for the Qualified Plug-In
Electric Drive Motor Vehicle Credit (Report Number 2023-30-065)
The Energy Improvement and Extension Act of 2008
created the Qualified Plug-In Electric Drive Motor
Vehicle Credit. This credit was amended by the
American Recovery and Reinvestment Act of 2009,
and then modified and extended under the IRA and
renamed the Clean Vehicle Credit. The nature of
these changes will have an impact on the data
available to the IRS and its future controls and
compliance strategy.
This credit of up to $7,500 helps taxpayers offset the purchase of a qualifying plug-in
electric drive motor vehicle. The Joint Committee on Taxation estimated the credit will cost
$5 billion from Fiscal Years (FY) 2022 through 2026.
TIGTA assessed whether the IRS is adequately reviewing the Qualified Plug-In Electric Drive
Motor Vehicle Credit claimed by taxpayers. Additionally, TIGTA assessed the IRS’s actions in
response to past recommendations and sought to review the IRS’s plans for addressing the
changes made to the credit in the IRA.
In response to TIGTA’s recommendations in a prior audit, the IRS developed filters to identify
returns with potentially erroneous Qualified Plug-In Electric Drive Motor Vehicle Credit
claims. TIGTA’s review found that while the IRS has taken steps to address past
recommendations, problems with the implementation of some of the filters have made
existing issues worse.
TIGTA found that 74 percent of the tax returns flagged by the filter to identify non-qualifying
vehicle models flagged qualifying vehicle models in error, resulting in taxpayer burden and
unproductive examinations. In addition, due to issues with the filter, many credit claims for
non-qualified vehicles were not examined. TIGTA identified 13,518 unexamined returns with
credits totaling approximately $63 million potentially paid for unqualified vehicles.
TIGTA made five recommendations. The IRS agreed with four of the five recommendations
and disagreed with one.
April 1, 2023 – September 30, 2023│ 11
Inflation Reduction Act: Assessment of the IRS’s Efforts to Deliver Expected
Improvements for the 2023 Filing Season (Report Number 2023-IE-R010)
After passage of the IRA, the Treasury Secretary outlined 2023 Filing Season expectations
for the IRS. The expectations included fully resolving the backlogs, improving telephone
service, fully staffing the Taxpayer Assistance Centers (TAC), scanning millions of individual
paper tax returns, and providing taxpayers the ability to provide IRS documentation online.
TIGTA found that the IRS met two of the Secretary’s Figure 1: IRS Performance of
expectations, including reporting a level of service Secretary’s Expectations
average of 85 percent and reducing the average wait
time to answer a taxpayer’s call to approximately three
minutes. The IRS also provided taxpayers with the
ability to respond to nine of the highest volume notices
via its Document Upload Tool.
However, the IRS was unable to meet the Secretary’s
other three expectations to:
• Fully resolve its backlog of tax returns and other
tax account work. As of December 30, 2022, the
IRS reduced its volume of CY 2022 individual
paper-filed tax returns to be processed to
approximately 437,000. However, the IRS
continues to be challenged in its ability to fully
resolve backlogs of tax account inventory.
Source: Remarks made by the
Secretary on September 15, 2022,
• Fully staff the TACs. Forty-three TACs were and analysis of IRS documentation.
closed at some point during the 2023 Filing
Season and 230 TACs were not fully staffed. While the IRS exceeded the number
of taxpayers assisted in the prior year, it still fell short of its estimated assistance to
2.7 million taxpayers.
• Scan millions of individual paper-filed returns. As of April 30, 2023, the IRS
reported scanning 4,154 Forms 1040, U.S. Individual Income Tax Return. As of
July 31, 2023, the IRS reported that scanning was going well. The IRS increased the
scanning to 50,810 individual income tax returns and expanded the scanning to
include 25 different attachments that can be included with the paper-filed
Form 1040.
This report was prepared to provide information only. No recommendations were made.
12 │April 1, 2023 – September 30, 2023
Promote the Economy, Efficiency, and
Effectiveness of Tax Administration
TIGTA’s Office of Audit strives to
promote the economy, efficiency, and
effectiveness of tax administration.
TIGTA provides recommendations to
improve IRS systems and operations
and to ensure the fair and equitable
treatment of taxpayers. TIGTA’s
comprehensive and independent
performance audits of the IRS’s
programs and operations primarily
address statutorily mandated reviews
and high-risk challenges the IRS faces.
The IRS’s implementation of audit recommendations results in:
• Cost savings;
• Increased or protected revenue;
• Protection of taxpayers’ rights and entitlements; and
• More efficient use of resources.
Each year, TIGTA identifies and addresses the IRS’s major management and performance
challenges. The Office of Audit places audit emphasis on statutory coverage required by 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 2023 Through September 2023
Improving Taxpayer Service
Protecting Taxpayer Data and IRS Resources
Administering Tax Law Changes
Increasing Domestic and International Tax Compliance and Enforcement
The following summaries highlight significant audits completed in each area of emphasis
during this 6-month reporting period.
April 1, 2023 – September 30, 2023│ 13
Improving Taxpayer Service
Services to Underserved Communities Have Been Ongoing; However, an Agencywide
Strategy Has Not Been Developed (Report Number 2023-15-027)
In July 2019, Congress enacted the Taxpayer First Act to re-imagine and enhance the way
the IRS serves taxpayers, enforces the tax laws, and trains its employees. 7 The Taxpayer
First Act consists of 45 provisions, including one provision that requires the IRS to develop
the Taxpayer Experience Strategy (TXS).
The TXS outlines six key focus points, including focused strategies to engage with
underserved communities. The goal of the TXS is for the IRS to provide interactions that are
efficient, informative, personalized, and convenient and to ensure that taxpayers have the
information they need to understand and comply with their tax obligations.
TIGTA conducted this audit to determine the progress
made in implementing service improvements to
taxpayers in underserved communities as described
in the TXS. We found that the TXS included details
about how the IRS would implement service
improvements for two of the eight underserved
communities, but the IRS has not yet developed
detailed plans to address the other six communities,
nor has it created a comprehensive agencywide
strategy to implement and monitor service
improvements.
In addition, the IRS has not yet defined the
underserved communities or identified their
populations. Many underserved communities
overlap with each other, so defining the populations would allow for more efficient use of
IRS resources. The TXS requires the IRS to develop customized strategies for each
underserved community based on focused research that will improve outreach, education,
communications, and services to support taxpayers. Focused research should include
establishing the definitions and populations of each underserved community.
TIGTA recommended that the Chief Taxpayer Experience Officer work with other IRS
functions to define and identify the populations of each underserved community, and to
develop and implement a comprehensive agencywide strategy to improve programs,
products, and services for underserved communities when the Taxpayer Experience Office is
fully operational. The IRS partially agreed with this recommendation.
7 Pub L. No. 116-25, 133 Stat. 981 (codified in scattered sections of 26 U.S.C.).
14 │April 1, 2023 – September 30, 2023
Additional Actions Are Needed to Reduce Accounts Management Function Inventories to
Below Pre‑Pandemic Levels (Report Number 2023-46-026)
This audit continued TIGTA’s assessment of the IRS’s efforts to reduce significant backlogs
in the Accounts Management function inventories during CY 2022, including Forms 1040-X,
Amended U.S. Individual Tax Return.
On March 10, 2022, the IRS announced its initiatives to address the continuing backlog of
tax returns and other tax account work during the 2022 Filing Season. These initiatives,
referred to as the Get Healthy Plan, were 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.
TIGTA reported previously that the Accounts Management function inventories would not
return to pre-pandemic levels by the end of CY 2022. Although management took actions to
address concerns identified during this review, backlogs of inventory remained in the 2023
Filing Season. TIGTA identified the following contributing factors to the remaining backlogs.
TIGTA found that while employees assigned to the Accounts Management function’s Surge
Team contributed to the additional closures of its inventory, there were fewer employees
available than anticipated. In addition, the loss of employees from other IRS functions
resulted in an estimated $2.6 billion in potential lost or delayed revenue, due to fewer
examination and collection cases being worked.
TIGTA also noted that the Surge Team’s Form 1040-X closure rates were less than one-half
of the normal employees’ closure rates. Automating the processing of these amended
returns would reduce the burden on taxpayers waiting for their amended returns to be
processed, and the benefits far outweigh the associated costs. For example, TIGTA
estimated that the IRS would potentially save more than $322.2 million in yearly processing
costs by automating the processing of Forms 1040-X. This is in addition to any interest
saved.
The IRS agreed with 10 of TIGTA’s 13 recommendations. The IRS disagreed with three
recommendations, including that management establish goals and a plan for all inventory
types to reach pre-pandemic levels.
April 1, 2023 – September 30, 2023│ 15
Protecting Taxpayer Data and IRS Resources
Security Weaknesses Are Not Timely Resolved and Effectively Managed
(Report Number 2023-20-042)
The Federal Information Security Modernization Act
of 2014 mandates all Federal agencies develop and
implement a corrective action plan, known as a Plan
of Action and Milestones (POA&M), to identify and
document the resolution of information technology
security weaknesses. 8
Between January 1, 2005, and August 26, 2022, the IRS created 12,089 POA&Ms.
Of these POA&Ms, remediation efforts for 9,534 have been finalized while 2,555 are open
with efforts still ongoing. TIGTA selected a judgmental sample of 401 POA&Ms for analysis.
TIGTA determined that 291 (73 percent) of the 401 POA&Ms selected for analysis were not
timely reviewed based on agency security policies. Newly created POA&Ms are required to
be reviewed within 45 days of creation, Late POA&Ms are required to be reviewed within
45 days of entering Late status, and closure reviews are required to be conducted within
60 days of POA&M closure. TIGTA also found that the closure reviews were not performed
within the required 60-day time period for 138 (49 percent) of 282 POA&Ms marked as
either Accepted, Completed, or Validated.
While the required reviews were ultimately completed, the continued extensions of
remediation timelines may lengthen the period of exposure of critical tax systems to known
information security vulnerabilities. This may provide expanded opportunities for threat
actors to access and exploit data.
From January 1, 2018, through August 26, 2022, the IRS finalized remediation efforts for
3,139 of the 12,089 POA&Ms. However, during the closure process, the IRS did not
reevaluate the estimated budget and update it with actual costs at closure, as required.
Tracking associated resources required to resolve POA&Ms facilitates informed
decisionmaking.
TIGTA made four recommendations to the IRS Chief Information Officer. The IRS agreed
with all four recommendations.
8 44 U.S.C. § 3551, et seq. (2018)
16 │April 1, 2023 – September 30, 2023
Known Exploited Vulnerabilities That Remain Unremediated Could Put the IRS Network
at Risk (Report Number 2023-20-048)
TIGTA reviewed the IRS’s compliance with the Department of Homeland Security’s Binding
Operational Directive 22-01, Reducing the Significant Risk of Known Exploited
Vulnerabilities (KEV). Issued November 3, 2021, the directive required Federal agencies to
update internal vulnerability management procedures by January 2, 2022. The directive
focuses on vulnerabilities that are active threats and should be Federal agencies’ top
priority.
The IRS uses its asset and vulnerability repository to track KEVs. Ineffective tracking and
untimely remediation of KEVs increase the risk to the overall security of IRS assets and allow
affected assets to become targets of external exploitation with the intent to steal taxpayer
data. In addition, failure to isolate or remove vulnerable assets from the network increases
the risk of malicious attacks.
TIGTA found that from September through December 2022, there were between 494 and
5,976 KEVs past the remediation period.
Figure 2: Unremediated KEVs From September Through December 2022
Source: The IRS’s asset and vulnerability repository reports from September through
December 2022. Note: An asset may have one or more KEVs.
The repository reflected 91,559 assets with at least one KEV as of December 15, 2022.
TIGTA was unable to determine the timeliness of remediation of the affected assets with a
KEV because the attack signature change date in the IRS’s asset and vulnerability repository
is not reliable. TIGTA also found that the IRS was not following established guidance to
isolate or remove all vulnerable assets from its network.
Further, the directive specifies that Federal agencies are required to track all KEVs from
the Cybersecurity and Infrastructure Security Agency’s KEV Catalog. However, between
September and December 2022, the IRS did not track 14 KEVs. During the audit, the IRS
implemented an action to correct this issue.
April 1, 2023 – September 30, 2023│ 17
Administering Tax Law Changes
American Rescue Plan Act: Review of the Reconciliation of the Child Tax Credit
(Report Number 2023-47-035)
The American Rescue Plan Act of 2021 provided
taxpayers the ability to receive up to one-half of the
estimated TY 2021 Child Tax Credit in advance payments
between July and December 2021.9 The IRS issued
216.9 million advance payments totaling $93.5 billion.
The IRS estimated the advance payments based on prior
year tax return information and information reported
through its nonfiler tools.
TIGTA previously reported that the IRS erroneously issued 3.3 million advance payments to
1.5 million taxpayers who were not eligible to receive an advance payment. The IRS’s
reconciliation process addressed both potentially ineligible taxpayers and eligible taxpayers
who had not received advance payments when they filed their TY 2021 tax return. However,
our review showed that as of October 12, 2022, approximately 4.1 million taxpayers who
were issued about $9 billion in advance payments had not yet filed a tax return.
TIGTA’s seven recommendations to the IRS included: identifying and reviewing the instances
where taxpayers received more or less Child Tax Credit than they were eligible to receive;
sending letters to taxpayers with advance Child Tax Credit payments who have yet to file a
TY 2021 tax return; and creating a process to recover potentially erroneous advance
payments.
The IRS agreed with four of the seven recommendations and partially agreed with another.
The IRS did not agree to identify additional taxpayers with excess Child Tax Credits or to
develop a process to recover erroneous advance payments from nonfilers. TIGTA continues
to believe that taxpayers received excess Child Tax Credit after the IRS implemented a
programing change and that processes are needed to recover erroneous advance payments
totaling $1 billion.
9 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.).
18 │April 1, 2023 – September 30, 2023
Increasing Domestic and International Tax Compliance and Enforcement
Planning Efforts to Hire Employees Who Conduct Audits of High Earners and
Large Businesses Could Be Improved (Report Number 2023-10-025)
IRS enforcement function full-time equivalent employees have declined from Fiscal Years
(FYs) 2010 through 2021 due to budget decreases. This reduction to enforcement function
staffing levels has affected the total enforcement revenue collected by the IRS. TIGTA
performed this audit to evaluate the IRS’s strategy to recruit employees to conduct audits of
high earners and large businesses. This is the first in a series of reviews related to the IRS’s
enforcement hiring.
The IRA provided the IRS with approximately
$45.6 billion dedicated to enforcement
activities. On May 19, 2021, in written
testimony to the Subcommittee on Financial
Services and General Government, the IRS
Commissioner stated that, among other
operational directives, this appropriation will
facilitate the hiring and training of auditors to
focus on complex investigations of large
businesses, partnerships, and global high-
wealth taxpayers. The IRS has initiated planning efforts to hire these employees, with the
majority working in the IRS’s LB&I Division and the Small Business/Self-Employed Division.
After passage of the IRA, the Secretary of the Treasury issued a memorandum in
August 2022 requiring the IRS to produce a Strategic Operating Plan detailing how these
new resources will be spent in the categories of technology, service improvement, and
personnel. This Strategic Operating Plan was issued on April 5, 2023. The memorandum
also stated that the increase in enforcement funding will not result in increased chances of
being audited for small businesses or households earning $400,000 per year or less.
TIGTA noted that an ineffective recruitment and hiring strategy could negatively impact the
IRS’s ability to increase audits of high earners and large businesses that underreport
income. Ineffective planning can limit a business unit’s capability to complete its mission.
This in turn can reduce the likelihood that the IRS will accomplish its strategic goals. One of
those goals is to enforce the tax law fairly and efficiently to increase voluntary compliance
and narrow the Tax Gap.
TIGTA recommended that the IRS establish a plan to effectively manage changes in hiring
volume and improve communication channels across business units to mitigate the effects
of large hiring surges. The IRS agreed with TIGTA’s recommendations.
April 1, 2023 – September 30, 2023│ 19
The IRS Large Business and International Division Should Consider Shifting Individual
Examination Resources to More Productive Examinations (Report Number 2023-30-019)
TIGTA initiated this audit to evaluate the use of resources and examination productivity for
individual returns examined by the LB&I Division and determine whether it is making the
most efficient use of examination resources and staffing.
The LB&I Division’s Withholding Exchange and International Individual Compliance (WEIIC)
practice area completed most of the Division’s individual examinations and is responsible
for examining returns with an international component. The LB&I Division also examines
high-wealth individuals and the enterprises they control as part of the Global High Wealth
program. The LB&I Division has in its scope international individual returns, as well as the
most complex individual and business income tax returns to address significant levels of
suspected underreporting of tax liabilities and nonfiling of tax returns.
While the LB&I Division Table 2: WEIIC Examination Closures by TPI
spends most of its time During FYs 2017–2021
and resources auditing
businesses, during FYs
2017 through 2021,
67 percent of the
examinations that the
LB&I Division closed
consisted of individual
taxpayers. According
to the LB&I Division, a
significant majority Source: LB&I Division Key Stats reports, FYs 2018 and 2021.
were conducted by tax
examiners and tax compliance officers who generally work single-issue cases. Individual
examinations comprised between 12 and 19 percent of the LB&I Division’s time during this
same period. Ninety percent of WEIIC individual examination closures reported less than
$200,000 total positive income (TPI) for FYs 2017 through 2021.
TIGTA recommended that the Commissioner, LB&I Division: 1) evaluate the composition of
International Individual Compliance cases to ensure the highest compliance risk work is
selected and assigned to International Individual Compliance examiners in alignment with
their skills; and 2) monitor the activity code for International Individual Compliance
substitute for return case closures to ensure that the activity code accurately represents the
taxpayer’s TPI. The IRS agreed with and implemented the two recommendations.
20 │April 1, 2023 – September 30, 2023
The Knowledge Management Program Will Benefit From Addressing User Concerns
and Improving Performance Measures and Controls Over Employee Costs
(Report Number 2023-30-024)
In FY 2017, the IRS implemented the enterprise-wide
Knowledge Management program. Knowledge
Management is a strategy that captures, shares, and
applies employee knowledge to enhance learning,
performance, collaboration, and decisionmaking.
A well-designed and properly administered Knowledge
Management program should allow employees to work
more efficiently and effectively.
In its Knowledge Management Business Plan, the IRS acknowledged that the loss of
knowledge and expertise from retiring IRS employees is a significant top risk facing the
agency. The IRS has estimated that 63 percent of its current workforce will resign or be
eligible to retire by FY 2028.
TIGTA evaluated the Knowledge Management program and its impact on improving
performance and taxpayer compliance. We surveyed around 6,300 IRS employees to gauge
the effectiveness of the enterprise-wide program. Some of those surveyed expressed
concerns about locating pertinent information on the Virtual Library website. Also, some of
the employees who located the site found the information hard to use and lacking in
relevant information. Additionally, employees designated as subject-matter experts were
sometimes unhelpful due to their limited experience level. Further, not all business units
use customer satisfaction surveys to identify improvements to Knowledge Management
programs.
TIGTA found that Knowledge Management performance measures are incomplete because
they focus exclusively on high-level activity measures, such as the number of employees
viewing the Virtual Library and the amount of content developed. Measures that would
make the Knowledge Management program more effective include tracking subject-matter
expert response time and the number of accesses that result in the resolution of users’
questions.
We also found that the efficiency of the Knowledge Management program could be
improved by monitoring employee costs. The reviewed business units were not consistent
when capturing their employee costs pertaining to Knowledge Management.
TIGTA made seven recommendations to improve the operation, establish performance
measures, and ensure the accountability of the IRS Knowledge Management program.
The IRS agreed with all seven recommendations and plans to take appropriate corrective
actions.
April 1, 2023 – September 30, 2023│ 21
Advance Oversight of America’s Tax System
TIGTA’s Office of Inspections and Evaluations
provides focused and expedited oversight to
quickly assess emerging issues impacting tax
administration and IRS operations. This function
has two primary product lines: inspections and
evaluations.
Inspections are intended to:
• Provide factual and analytical
information;
• Monitor compliance;
• Measure performance;
• Assess the effectiveness and efficiency of programs and operations;
• Share best practices; and
• Inquire into allegations of waste, fraud, abuse, and mismanagement.
Evaluations are intended to:
• Provide in-depth reviews of specific management issues, policies, or programs;
• Address Governmentwide or multiagency issues; and
• Develop recommendations to streamline operations, enhance data quality, and
minimize inefficient and ineffective procedures.
Sensitive Business and Individual Tax Account Information Stored on Microfilm Cannot
Be Located (Report Number 2023-IE-R008)
The IRS is required to create and store backups of both business and individual tax records
to ensure that these records are available to conduct business, document IRS activities
adequately, and protect the interests of the Federal Government and the American
taxpayers. The IRS uses microfilm cartridges to store photographic records of sensitive
business and individual tax information.
TIGTA determined that significant deficiencies exist in the IRS’s accounting for microfilm
backup cartridges. Deficiencies result in the inability of the IRS to account for thousands of
microfilm cartridges containing millions of sensitive business and individual tax account
records. Sensitive business and individual taxpayer information stored on the unaccounted
for cartridges can be used to commit tax refund fraud identity theft.
22 │April 1, 2023 – September 30, 2023
Onsite visits to the Kansas City and Ogden Tax Processing
Centers provided examples of unaccounted for microfilm
cartridges. The photo shows an empty box on the shelf in
Ogden with a note inside.
TIGTA also found the IRS is not in compliance with records
management requirements. IRS management stated that
15 large pallets containing microfilm cartridges required to
be sent to the Federal Records Center have been stored at
the IRS’s National Distribution Center since 2018. As of
April 2023, IRS management noted that they have yet to
secure a contract to have the microfilm cartridges sent.
In addition, TIGTA determined that the IRS is not in
compliance with microfilm destruction time frames.
TIGTA identified individual microfilm cartridges stored Source: An October 2022
at all three IRS Tax Processing Centers that exceed the TIGTA photo taken in the
30-year storage requirement. Management noted that no Microfilm Storage Area during
process has been established to timely dispose of microfilm a site visit to the Ogden Tax
backup cartridges. Processing Center.
TIGTA made 13 recommendations. The IRS agreed with 11 recommendations and
disagreed with 2 recommendations.
Actions Are Needed to Address Inaccurate, Incomplete, and Inconsistent Taxpayer
Assistance Center Information Provided to Taxpayers (Report Number 2023-IE-R006)
The IRS will receive almost $78 billion in supplemental funds from the IRA through
September 30, 2031, with a portion of the funding dedicated to improving taxpayer
services. 10 Approximately $3.2 billion is to be expended on taxpayer services, such as filing
and account services, pre-filing assistance, and education.
TIGTA found that taxpayers seeking face-to-face assistance may experience difficulty
obtaining key contact information regarding TACs, e.g., office addresses, hours of operation,
services provided. This includes taxpayers seeking this information on the IRS’s website
(IRS.gov), the IRS2Go mobile App, or calling the local telephone number for a TAC.
For example, the How can we help you? screen located on the IRS.gov homepage provides
links to the various avenues of assistance for taxpayers seeking help. However, absent in
this list of options is a link to information on how to find a local TAC. Figure 3 provides a
screenshot of the How can we help you? section on the IRS.gov homepage.
10 The IRS received approximately $79.4 billion in supplemental funding from the Inflation Reduction Act of 2022 (Pub. L.
No. 117-169, 136 Stat. 1818). Approximately $1.4 billion in IRA funding was later rescinded under the Fiscal
Responsibility Act of 2023 (Pub. L. No. 118-5, 137 Stat. 10).
April 1, 2023 – September 30, 2023│ 23
We also noted that information Figure 3: How can we help you? Screen on IRS.gov
on the recorded messages on
the local telephone numbers
was not always consistent, up-
to-date, or accurate and did not
provide an option to listen to
the message in Spanish.
Additionally, taxpayers are not
being adequately informed of
TAC closures, and information
regarding whether TACs offer
walk-in services is inconsistent
and unclear.
Source: https://www.irs.gov.
TIGTA issued an e-mail alert to
the IRS on January 26, 2023, detailing our initial concerns, so IRS management could take
actions deemed appropriate to improve service to taxpayers for the 2023 Filing Season.
The IRS agreed with 8 of the 10 TIGTA recommendations. For the other two
recommendations, IRS management indicated that updating the local TAC recorded
messages to provide taxpayers with current information is not feasible and that current
processes and procedures prevent appointments from being scheduled outside of each
TAC’s hours of operation.
Assessment of the Internal Revenue Service’s
Active Shooter Readiness and Training
(Report Number 2023-IE-R005)
An active shooter or other mass casualty event
at a TAC or any IRS facility can result in
significant damage to the facility and even
greater physical and psychological trauma to
the staff.
TIGTA found that the IRS has developed an
active shooter training program that educates
Source: U.S. Department of Homeland Security.
its employees on the “Run, Hide, Fight”
response that aligns with the Department of Homeland Security guidelines for dealing with
an active shooter situation. This training is given to IRS employees and contractors to
provide comprehensive information on IRS security policies, procedures, and actions that
should be taken to prepare for and respond to potential security incidents and emergencies.
While the IRS has provided employees with materials to raise awareness about Active
Shooter situations, TIGTA noted that additional actions were needed to ensure that
24 │April 1, 2023 – September 30, 2023
contractors are aware of security protocols. In addition to training, employees need to fully
understand their response options to empower them to react decisively.
TIGTA made five recommendations to the Chief, Facilities Management and Security
Services, such as ensuring that action is taken if contractors do not timely complete security
briefings, and that policies are updated to require after-action reports of active shooter drills
or events to assess the efficacy of the response. TIGTA also noted that IRS officials need to
update the annual security briefing to emphasize that employees need to discuss
emergency preparedness with their managers annually. The IRS agreed with all
recommendations.
Review of the IRS’s Process to Perform Mandatory Annual Examinations of Presidential
Returns for Tax Years 2000 Through 2021 (Report Number 2023-IE-R011)
In December 2022, Congress and media outlets
reported concerns regarding the IRS’s mandatory
Presidential examination program. In response
to these concerns, TIGTA initiated a review to
assess the IRS’s processes and procedures for
conducting required annual mandatory
examinations of Presidential returns filed for
TYs 2000 through 2021.
TIGTA found that the IRS’s internal guidelines for mandatory Presidential examinations are
incomplete and inaccurate. For example, key procedures performed by the Office of the
Deputy Commissioner for Services and Enforcement are not detailed in IRS guidelines. In
addition, although guidelines require the expeditious handling of the Presidential returns to
ensure prompt completion of the examinations, the IRS has not developed guidance
defining time frames for processing, transferring, and starting examinations of Presidential
returns.
Also, the process for identifying examination issues prior to assigning non-Presidential
returns to an examiner is different than the process used for Presidential returns. For non-
Presidential returns, the returns are generally sent to the examiner with pre-identified issues
for the examiner to consider. However, for Presidential returns, the examiner receives the
return without pre-identified examination issues.
TIGTA made five recommendations, including: the IRS update internal guidelines for
mandatory Presidential examinations; establish time frames for the expeditious handling of
Presidential returns; and evaluate whether the IRS can use an independent process to
identify potential examination issues prior to assigning Presidential returns to an examiner.
The IRS agreed with three recommendations, partially agreed with one recommendation,
and disagreed with another recommendation.
April 1, 2023 – September 30, 2023│ 25
Federal Acquisition Regulation Requirements Were Either Not Performed or Documented
When Awarding and Administering Expert Witness Contracts (Report Number 2023-IE-R012)
The IRS’s Office of Chief Counsel Figure 4:
represents the IRS in litigation and can
obtain the services of expert witnesses.
The primary consideration in selecting
an expert witness is the degree to
which a specific witness will be helpful
to the Tax Court in understanding and
determining the matter at issue. TIGTA
assessed the IRS’s compliance with the
Federal Acquisition Regulation and IRS
Source: TIGTA’s analysis of the IRS’s Procurement for
policies and procedures for awarding Public Sector System.
and administering expert witness
contracts.
TIGTA found that the IRS was not in compliance with all Federal Acquisition Regulation and
IRS requirements when awarding and administering expert witness contracts. These include
performing a tax compliance check, obtaining the contractor’s assertion regarding
delinquent tax liability or a felony conviction, completing security awareness training, and
considering an internal expert prior to seeking the services of an external expert.
TIGTA’s review of 27 expert witness contract files awarded during FYs 2019 through 2021,
totaling nearly $39 million, found that documentation supporting key required actions taken
to award the contract were either not included in the contract file or the IRS was unable to
provide documentation when requested. For those actions where documentation was not
provided, TIGTA was unable to determine whether the required action was taken.
In addition, TIGTA found that all 27 contracts were classified as Firm-Fixed-Price in the
Government’s Federal Procurement Data System but managed like Labor-Hour contracts.
Further, for 16 (59 percent) of the 27 contracts reviewed, the IRS did not provide evidence
to support its oversight and/or monitoring of the expert witness’s performance and
compliance with contract terms.
TIGTA made six recommendations. IRS management agreed with five recommendations.
The IRS disagreed with TIGTA’s recommendation to review all closed expert witness
contracts to determine if the contract type should be corrected in the IRS procurement
system and the Federal Procurement Data System.
26 │April 1, 2023 – September 30, 2023
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:
IRS employee misconduct undermines the IRS’s ability to deliver taxpayer services, to
enforce tax laws effectively, and to collect taxes owed to the Federal Government. External
threats against the IRS impede its ability to fairly, efficiently, and safely carry out its role as
the Nation’s revenue collector. Individuals who attempt to corrupt or otherwise interfere
with the IRS through various schemes and frauds adversely impact the IRS’s ability to collect
revenue.
TIGTA investigates allegations of violations in these areas, and refers the findings to the
U.S. Department of Justice or to State authorities for prosecution. We also refer allegations
of violations involving IRS employee misconduct to IRS management.
In each of the following performance areas, we include examples of cases from the current
reporting period. For additional details about individual cases, visit the TIGTA Investigative
Activities page or click on the hyperlink in the case titles below.
April 1, 2023 – September 30, 2023│ 27
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. 38%
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. of OI’s work was employee
integrity investigations.
During this reporting period, employee integrity investigations
accounted for 38 percent of OI’s work. OI conducted 156 employee misconduct
investigations that were referred to the IRS for action. The IRS took action on 144 and
closed 12 investigations without action. 11
As part of its employee integrity focus, TIGTA also conducts proactive investigative initiatives
to detect misconduct in the administration of IRS programs. During this reporting period,
TIGTA initiated three 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 case represents OI’s efforts to address employee misconduct during this
6-month reporting period: 12
IRS Employee Pleads Guilty to Cyberstalking Colleague
On May 25, 2023, in the District of Utah, Daimion Brown pled guilty to one count of
cyberstalking. Brown, who worked at the IRS office in Utah, used a digital communication
service to send a colleague several threatening and intimidating text messages.
According to court documents, beginning around March 31, 2022, and continuing until
June 10, 2022, Brown sent a colleague harassing text messages describing how he watched
this colleague all day and night. Brown also sent a text message that discussed the method
in which he would torture a friend of this colleague, followed by an image of a name and
phone number of an acquaintance of this colleague.
11 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.
12 Facts in the summarized case narrative come from court documents of the jurisdiction named.
28 │April 1, 2023 – September 30, 2023
At sentencing, the maximum penalties Brown could receive are 5 years’ imprisonment, a
$250,000 fine, and 3 years’ supervised release.
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: 13
IRS Case Advocate Sentenced for Unauthorized Inspection of Returns or Return
Information
On August 28, 2023, in the Western District of New York, Lisa Hughes, Case Advocate within
the IRS’s Taxpayer Advocate Service, in Buffalo, New York, pled guilty to one count of
unauthorized inspection of returns or return information and was sentenced to 1 year of
probation.
According to the court documents, while she worked as a Case Advocate within the IRS,
Hughes accessed return information for a local tax preparation firm on more than 120
occasions. Two individuals who worked for the tax preparation firm would inquire about
returns filed for their clients. Hughes would then access the returns or other return
information in the IRS’s Integrated Data Retrieval System. The calls received from the two
individuals were not part of Hughes’ job responsibilities. Hughes knew that she was not
authorized to access the return information in response to these calls, but she nevertheless
intentionally accessed the requested return information.
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
13 Facts in the summarized case narrative come from court documents of the jurisdiction named.
April 1, 2023 – September 30, 2023│ 29
which to perform their critical tax administration functions. During this 6-month reporting
period, OI provided eight armed escorts for IRS employees.
OI undertakes investigative initiatives to identify individuals who could commit violence
against, or otherwise pose a threat to, IRS employees, facilities, or infrastructure. OI also
provides intelligence to IRS officials to assist them in making proactive operational decisions
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
28%
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 of OI’s work was investigations
danger to IRS employees. of threats/assaults.
During this 6-month reporting period, employee and infrastructure security investigations
accounted for 28 percent of OI’s work.
The following case represents OI’s efforts to ensure the safety of IRS employees during the
reporting period: 14
Bomb Threat at IRS Building in Austin, Texas
On June 13, 2023, in the Western District of Texas, Caleb Augustine pled guilty to damage
of government property. According to the court documents, beginning on or about
November 12, 2020, and continuing through June 23, 2021, Augustine willfully wrote on
stalls and walls of the men’s bathroom at the IRS building in Austin, Texas. Augustine
intentionally conveyed false and misleading information, specifically that bombs would go
off in the IRS building within one to two days of the threat. At sentencing, Augustine could
receive a maximum of 1 year imprisonment and be ordered to pay a fine.
14 Facts in the summarized case narrative come from court documents of the jurisdiction named.
30 │April 1, 2023 – September 30, 2023
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;
34%
offer bribes to IRS employees to influence their tax
cases; commit fraud in contracts the IRS awards to
contractors; or commit cybercrimes through the
misuse of IRS portals. In addition, unscrupulous tax
preparers can make unauthorized disclosures of tax of OI’s work was investigating
return information, steal Federal tax refunds, attempts to corrupt or impede
misrepresent their credentials, or prepare bogus tax administration.
IRS documents.
During this reporting period, investigations into attempts to corrupt or impede tax
administration accounted for 34 percent of OI’s work.
The following cases represent OI’s efforts in this area during the reporting period: 15
Illegal Agents of the People’s Republic of China Charged in IRS Bribery Scheme
On May 24, 2023, in the Southern District of New York, John Chen, a U.S. citizen and
Lin Feng, a People’s Republic of China (PRC) citizen were charged with acting and conspiring
to act in the United States as unregistered agents of the PRC Government, conspiring to
bribe, bribing a public official, and conspiracy to commit money laundering.
According to a U.S. Department of Justice press release, from January 2023 to May 2023,
Chen and Feng allegedly engaged in a scheme directed by the PRC Government to
manipulate the IRS Whistleblower Program in an effort to strip the tax-exempt status of an
entity run and maintained by Falun Gong practitioners. Chen and Feng paid $5,000 in cash
bribes to an undercover officer, Chen gave the officer a $1,000 cash bribe, and Feng paid
the officer a $4,000 cash bribe.
If convicted, Chen and Feng could each receive a maximum term of 5 years’ imprisonment
for count one, 10 years’ imprisonment for count two, 15 years’ imprisonment for count
three, and 20 years’ imprisonment for count four.
15 Facts in the summarized case narratives come from court documents of the respective jurisdictions named.
April 1, 2023 – September 30, 2023│ 31
Man Pleads Guilty for Role in IRS Refund Check Scheme
On June 9, 2023, in the Northern District of Georgia, Joseph Kolawole pled guilty to mail
fraud. According to the court documents, between December 2014 and May 2019,
Kolawole prepared and filed fraudulent Federal corporate tax returns on Forms 1120,
U.S. Corporation Income Tax Return, and demanded payment of refunds purportedly due to
the corporations.
The IRS paid refunds for the fraudulent returns in Kolawole’s scheme. U.S. Treasury checks
were mailed to the sham corporations based on the addresses specified on the tax returns.
Once the U.S. Treasury checks were received, Kolawole and others fraudulently altered the
payees on the checks and deposited them into bank accounts owned and controlled by
Kolawole. The scheme resulted in more than 100 fraudulent refund checks being issued,
totaling over $4.5 million.
At sentencing, Kolawole faces a maximum prison term of 20 years, a maximum fine of
$250,000, and a maximum of 3 years of supervised release.
Fighting Cybercrime
Leader of Worldwide Tax Return Scheme Sentenced16
On September 18, 2023, in the Northern District of West Virginia, Ayodele Arasokun was
sentenced to 34 years of imprisonment, 3 years’ supervised release, and ordered to pay
over $2.24 million in restitution. Arasokun was convicted by a jury in October 2022 of wire
fraud and aggravated identity theft.
From January 2016 and continuing to November 2017, Arasokun devised a scheme to
unlawfully obtain tax refund money by filing fraudulent Federal income tax returns.
Arasokun collected the names, dates of birth, and Social Security numbers for multiple
individuals. Using this information, Arasokun compromised the IRS’s Electronic Filing Pin
application, an online electronic portal. Arasokun then electronically filed and attempted to
file fraudulent Federal income tax returns. These fraudulent Federal income tax returns
contained fictitious income amounts, withholdings, and other false information. He then
directed tax refunds to be deposited into prepaid debit cards and bank accounts that he
monitored. Investigators discovered that Arasokun was tracking approximately 700
U.S.-based accounts containing more than $50 million. Of the $9.1 million claimed by
Arasokun in false Federal income tax returns, the IRS ultimately paid out $2.2 million in
fraudulently obtained refunds.
16 Facts in the summarized case narrative come from court documents of the jurisdiction named.
32 │April 1, 2023 – September 30, 2023
Impersonation Scams and Schemes
Man Pleads Guilty for His Role in IRS Impersonation Scheme
On July 20, 2023, in the District of Maryland, Wen Fu Zeng was sentenced to 10 months in
prison and 3 years of supervised release after he pleaded guilty to wire fraud. He was also
ordered to pay restitution in the amount of $145,228 and a special assessment of $100.
In July 2018, Zeng was part of a scheme where a victim received a telephone call from
someone purporting to be a representative of the IRS. The victim was told they owed taxes
to the IRS and that they would be arrested if their outstanding taxes were not paid. The
victim was informed they could resolve the IRS debt by purchasing gift cards from Target
and Wal-Mart. Transactional records and video footage from Target revealed that less than
one hour after the victim purchased the gift card, Zeng redeemed the gift card at a Target
store in Maryland. Zeng redeemed $1,492.39 of the victim’s gift card toward the purchase
of two Apple products.
Woman Arrested for Her Role in $2.5 Million Fraudulent Tax Refund Scheme
On June 28, 2023, in the District of Arizona, Jackie Peters was arrested for conspiracy to
defraud, conspiracy to commit money laundering, and for theft of public money. In total,
Peters and others transferred more than $2.5 million in fraudulent 2019 tax refunds, from
bank accounts in her control, to obtain Bitcoin.
According to the court documents, beginning in or around late February 2020, Peters used
stolen taxpayer information to prepare and submit fraudulent tax returns to the IRS. Peters
routinely falsified components of the tax returns, including earned income, itemized
expenses, and itemized deductions, in order to obtain a higher refund than would otherwise
be due to the legitimate taxpayer. In some instances, the false refunds were deposited into
accounts created and controlled by Peters; in other instances, the false returns were first
deposited into accounts controlled by others, and then transferred to an account controlled
by Peters. In addition to fraudulent tax refunds, the bank accounts controlled by Peters also
received U.S. Treasury deposits in the form of pandemic relief funds that were intended for
the named taxpayers. The contents of these bank accounts were then transferred for the
purpose of purchasing Bitcoin.
Tax Preparer Outreach
Former IRS Employee Schemed to Defraud the IRS and Commit Identity Theft
On May 8, 2023, in the Eastern District of California, Deena Vang Lee was sentenced to
54 months of imprisonment, 3 years’ supervised release, and ordered to pay $191,597 in
restitution. Lee was found guilty of wire fraud, aggravated identity theft, aiding and assisting
in the preparation and presentation of a false and fraudulent tax return, and making and
subscribing false and fraudulent tax returns. From 2012 through 2016, Lee at certain times
was an IRS employee who prepared and filed tax returns for other individuals that contained
false and fraudulent statements. In her role as a tax preparer, Lee used false information
April 1, 2023 – September 30, 2023│ 33
on customers’ tax returns and submitted those returns to the IRS. As part of this scheme,
Lee obtained the identification of multiple individuals and falsely listed these individuals as
childcare providers on multiple customers’ tax returns. Lee also falsely reported her income
related to the payments she received for tax preparation services on her tax returns for
TYs 2013, 2014, and 2015.
34 │April 1, 2023 – September 30, 2023
Investigations Statistical Reports
Significant Investigative Achievements (April 1, 2023, Through September 30, 2023)
Complaints/Allegations Received by TIGTA
Complaints Against IRS Employees 1,240
Complaints Against Non-Employees 1,541
Total Complaints/Allegations 2,781
Status of Complaints/Allegations Received by TIGTA
Investigations Initiated 604
In Process Within TIGTA 17 383
Referred to IRS for Action 666
Referred to IRS for Information Only 271
Referred to a Non-IRS Entity 18 0
Closed With No Referral 516
Closed Associated With Prior Investigation 195
Closed With All Actions Completed 146
Total Complaints/Allegations 2,781
Investigations Opened and Closed
Total Investigations Opened 1,069
Total Investigations Closed 1,054
Financial Accomplishments
Embezzlement/Theft Funds Recovered $724,637
Contract Fraud and Overpayments Recovered $0
Court-Ordered Fines, Penalties, and Restitution $27,551,945
Out-of-Court Settlements $0
Potentially Compromised by Bribery $0
Tax Liability of Taxpayers Who Threaten and/or Assault IRS Employees $172,566
IRS Assets and Resources Protected Against Malicious Loss $0
Total Financial Accomplishments $28,449,148
17 Complaints for which final determination had not been made at the end of the reporting period.
18 A non-IRS entity includes other law enforcement entities or Federal agencies.
April 1, 2023 – September 30, 2023│ 35
Status of Closed Criminal Investigations
Criminal Referral Employee Non-Employee Total
Referred – Accepted for Prosecution 7 201 208
Referred – Declined for Prosecution 148 173 321
Referred – Pending Prosecutorial Decision 13 40 53
Total Criminal Referrals 19 168 414 582
No Referral 218 189 407
Criminal Dispositions 20
Criminal Disposition Employee Non-Employee Total
Guilty (convicted) 0 5 5
Guilty (plea) 7 78 85
Nolo Contendere (no contest) 0 1 1
Pretrial Diversion 0 1 1
Deferred Prosecution 21 1 0 1
Not Guilty 0 0 0
Dismissed 0 7 7
Total Criminal Dispositions 8 92 100
Administrative Dispositions on Closed Investigations 22
Removed/Terminated 5
Suspended/Reduction in Grade 4
Resigned/Retired/Separated Prior to Adjudication 36
Oral or Written Reprimand/Admonishment 4
Clearance Letter/Closed, No Action Taken 9
Alternative Discipline/Letter With Cautionary Statement/Other 4
Non-Employee Actions 23 197
Total Administrative Dispositions 259
19 Criminal referrals include both Federal and State dispositions.
20 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. This table does not include investigations whose existence is protected from
disclosure by I.R.C. § 6103.
21 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.
22 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.
23 Administrative actions taken by the IRS against non-IRS employees, e.g., contractors.
36 │April 1, 2023 – September 30, 2023
Summary of Investigative Reports and Criminal Referrals
Criminal Referral Breakdown
Number of Investigative Reports Issued
Referred to the Department of Justice for Criminal Prosecution 511
Referred to State/Local Prosecuting Authorities 16
Number of Indictments and Criminal Informations
Indictments 188
Criminal Informations 22
Source: TIGTA OI’s Criminal Results Management System.
Summary of Activity Relating to Complaints of Human Trafficking
Activity Relating to Complaints of Human Trafficking
Number of Suspected Violations Reported 0
Number of Investigations 0
Status of Investigations N/A
Outcome of Investigations N/A
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, 2023 – September 30, 2023│ 37
Closed Investigations Involving IRS Senior Government Employees25
24
Detailed Description of the Facts If Declined,
Criminal Date
and Circumstances of the Disposition Date of
Status Referred
Investigation Declination
N/A N/A N/A N/A N/A
During the reporting period, there were no investigations involving IRS senior government
employees.
24 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.
25 For this report, a “senior Government employee” refers to an officer or employee in the Executive branch who occupies a
position classified at or above GS-15 of the General Schedule. 5 U.S.C.§ 405(i)(7).
38 │April 1, 2023 – September 30, 2023
Audit Statistical Reports
Audit Reports With Unimplemented Corrective Actions
The Inspector General Act requires the identification of any recommendations
described in previous semiannual reports, including the potential cost savings of
those recommendations for which corrective actions have not been completed. The
following list is based on information from the Treasury Department’s Joint Audit
Management Information System (JAMES). 26
Report Projected
Issued Report Title and Recommendation Summary
Number Completion
(F = Finding No., R = Recommendation No.)
Date
REVISING TAX DEBT IDENTIFICATION PROGRAMMING AND CORRECTING
PROCEDURAL ERRORS COULD IMPROVE THE TAX REFUND OFFSET
PROGRAM
March On Hold 27 F-1, R-1: Revise identification processes to include sole proprietor
2016-40-028 information from Form SS-4, Application for Employer Identification Number,
2016
to identify individual tax refunds to offset to business tax debt.
IMPROVEMENTS ARE NEEDED TO ENSURE THAT TAX ACCOUNTS ON THE
AUTOMATED NON-MASTER FILE ARE ACCURATELY PROCESSED
May On Hold F-1, R-1: Correct Automated Non-Master File programming to compute and
2017-40-037 assess the Failure to File penalty on Form 1040NR, U.S. Nonresident Alien
2017
Income Tax Return, accounts in which the Taxpayer Identification Number
(TIN) is an Employee Identification Number (EIN).
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
CASE SELECTION PROCESSES RESULT IN BILLIONS OF DOLLARS IN
POTENTIAL EMPLOYER UNDERREPORTED TAX NOT BEING ADDRESSED
July
2017-40-038 2017 On Hold F-3, R-1: Establish a systemic process to match data fields to perfect
unpostable Forms W-3, Transmittal of Wage and Tax Statements.
ADDITIONAL CONTROLS ARE NEEDED TO HELP ENSURE THAT
NONRESIDENT ALIEN INDIVIDUAL PROPERTY OWNERS COMPLY
WITH TAX LAWS
2017-30-048 August
2017 On Hold F-1, R-1: Request that a revision be made to Form 1040-NR to enable
nonresident aliens to make an election under I.R.C. § 871(d) and revise
processing procedures to ensure that the IRS records the election.
26 This summary data does not include recommendations that have been redacted in their entirety because they contain
information specifically prohibited from disclosure in their entirety by any provision of law, such as I.R.C. § 6103, protecting
tax returns and return information, or because they contain information the release of which could reasonably be expected
to allow circumvention of the law.
27 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, 2023 – September 30, 2023│ 39
Report Projected
Issued Report Title and Recommendation Summary
Number Completion
(F = Finding No., R = Recommendation No.)
Date
FURTHER ACTIONS ARE NEEDED TO REDUCE THE RISK OF EMPLOYMENT
TAX FRAUD TO BUSINESSES THAT USE THE SERVICES OF PROFESSIONAL
EMPLOYER ORGANIZATIONS
September
2017-40-085
2017 On Hold 28 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 formatting revisions.
PROCESSES NEED TO BE IMPROVED TO IDENTIFY INCOMPLETE AND
FRAUDULENT APPLICATIONS FOR INDIVIDUAL TAXPAYER IDENTIFICATION
NUMBERS
January
2018-40-010 On Hold F-3, R-2: Ensure that programming changes are made to require
2018
mandatory review when the Real-Time System alerts tax examiners that
an applicant is using duplicate supporting documents as has previously
been used to obtain an Individual Taxpayer Identification Number (ITIN).
ACTIONS ARE NEEDED TO REDUCE THE RISK OF FRAUDULENT USE OF
EMPLOYER IDENTIFICATION NUMBERS AND TO IMPROVE THE
EFFECTIVENESS OF THE APPLICATION PROCESS
2018-40-013 February On Hold F-2, R-1: Correct programming to reject EIN applications when an EIN
2018 has previously been assigned to the same sole proprietor and to reject
applications when IRS data indicate that the sole proprietor is deceased.
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
2018-20-034 June 01/15/24 F-2, R-1: Complete a cost analysis to: 1) determine the efficacy of
2018 relocating Criminal Investigation assets in each of the field offices to
existing IRS computer rooms versus upgrading the Criminal Investigation
computer rooms to ensure that assets are protected in accordance with
Federal and Internal Revenue Manual (IRM) security requirements, and
2) implement the most cost-effective solution.
IMPROVEMENTS ARE NEEDED IN THE WITHHOLDING COMPLIANCE
PROGRAM
September
2018-30-072 2018 On Hold F-3, R-2: Analyze the current selection criteria used by the Withholding
Compliance System to determine if the taxpayers identified for systemic
lock-in letter issuance are the best use of limited resources. This would
include potentially identifying taxpayers with multiple years of under-
withholding and the percentage of inventory that includes nonfilers.
28 This recommendation was agreed to by the IRS but was placed “On Hold” because the IRS is awaiting input from another
agency.
40 │April 1, 2023 – September 30, 2023
Report Projected
Issued Report Title and Recommendation Summary
Number Completion
(F = Finding No., R = Recommendation No.)
Date
ADDITIONAL ACTIONS ARE NEEDED TO REDUCE ALIMONY REPORTING
DISCREPANCIES ON INCOME TAX RETURNS
August On Hold F-2, R-1: Include the validation of the alimony recipient TIN as part of the
2019-40-048 2019 IRS’s tax return processing systemic TIN validation process.
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
2019-20-046 September
2019 09/15/24 F-3, R-1: Ensure the retention of Bring Your Own Device program
application audit logs for the appropriate period and periodic review of
the application audit logs by an independent source.
ADDITIONAL ACTIONS ARE NEEDED TO FURTHER REDUCE
UNDELIVERABLE MAIL
On Hold F-1, R-1: Develop Service-wide processes and procedures to ensure that
all operating divisions suppress the issuance of nonstatutory notices to
2019-40-074 September taxpayers that have an undelivered mail indicator on their account;
2019 suppress the issuance of correspondence when a taxpayer’s address of
record is an IRS campus; and research and update taxpayer addresses
for which the U.S. Postal Service returns undeliverable mail with a yellow
label that provides a more current address.
On Hold F-2, R-1: Install and use hygiene software to perfect taxpayer addresses
on the ITIN Real-Time System.
IMPROVEMENTS ARE NEEDED TO ENSURE THAT CONSISTENT
SUITABILITY CHECKS ARE PERFORMED FOR PARTICIPATION
IN INTERNAL REVENUE SERVICE PROGRAMS
2020-40-005 November
2019 On Hold F-4, R-2: Develop processes and procedures to ensure that continuous
criminal background checks are conducted on all program participants as
part of the Federal Bureau of Investigations Records of Arrests and
Prosecutions Back Program.
April 1, 2023 – September 30, 2023│ 41
Report Projected
Issued Report Title and Recommendation Summary
Number Completion
(F = Finding No., R = Recommendation No.)
Date
THE INTERNAL REVENUE SERVICE CAN IMPROVE TAXPAYER COMPLIANCE
FOR VIRTUAL CURRENCY TRANSACTIONS
2020-30-066 September
2020 On Hold 29 F-1, R-1: Continue efforts to close the virtual currency information gap by
issuing guidance clarifying the proper information reporting associated with
virtual currency transactions.
EXPANSION OF SELF-CORRECTION FOR ELECTRONIC FILERS AND OTHER
IMPROVEMENTS COULD REDUCE TAXPAYER BURDEN AND COSTS
December ASSOCIATED WITH TAX RETURN ERROR RESOLUTION
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
2021-45-017 February
2021 On Hold F-4, R-1: Allocate sufficient resources to the Income Verification Express
Service Program to perform suitability checks that are consistent with other
IRS programs at the time of enrollment and implement a continuous tax
compliance check to ensure that they remain suitable for the program.
TAXPAYER FIRST ACT: DATA SECURITY IN THE IDENTITY THEFT TAX REFUND
FRAUD INFORMATION SHARING AND ANALYSIS CENTER
May
2021-25-025 04/15/24 F-3, R-1: Ensure that the Information Sharing and Analysis Center’s
2021
alternate processing site is converted to a ******** that achieves the
maximum tolerable downtime to prevent any filing season delays. 30
CONTROLS OVER THE INTERNAL REVENUE SERVICE CONTRACTOR TAX
CHECK PROCESS NEED TO BE IMPROVED
June F-2, R-1: Coordinate with the Treasury Suspension and Debarment Official
2021-10-039 12/15/23
2021 to identify a required time frame and sample format for what information
should be included in the reports that the IRS provides on contractors with
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.
29 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.
30 Redaction due to subject matter that might create a risk of circumvention of the law if publicly released.
42 │April 1, 2023 – September 30, 2023
Report Projected
Issued Report Title and Recommendation Summary
Number Completion
(F = Finding No., R = Recommendation No.)
Date
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 F-3, R-2: Evaluate the benefits of creating controls to identify invalid
10/15/24
S corporations and mitigate the risk of noncompliance when shareholders
are found to be nonresident aliens.
****************PLATFORM MANAGEMENT NEEDS IMPROVEMENT 31
September
2021-20-063 2021 12/15/23 F-3, R-1: Retire older **************** and migrate to more current
*************** in accordance with the documented migration plan. 32
INCREASED AVAILABILITY OF TAX RESOURCES AND INFORMATION FOR
LIMITED ENGLISH PROFICIENT AND VISUALLY IMPAIRED TAXPAYERS HAS
ENHANCED ASSISTANCE, BUT ADDITIONAL IMPROVEMENTS ARE NEEDED
December F-4, R-1: Implement a more centralized and structured approach that
2022-40-008 12/15/25
2021 includes an assessment of factors including high-volume notices and letters
issued to taxpayers to ensure that frequently issued notices and letters, as
well as those that have significant impact on the taxpayer, are translated into
Spanish.
12/15/25 F-5, R-2: Establish a process for Limited English Proficient taxpayers to
provide feedback on their experience using the Over-the-Phone Interpreter
service.
12/15/25 F-5, R-3: Establish a customer satisfaction measurement system to assess
the overall satisfaction with Over-the-Phone Interpreter service.
12/15/25 F-6, R-1: Establish specific performance measures and goals to effectively
assess the assistance provided to Limited English Proficient and visually
impaired taxpayers.
ADMINISTRATION OF THE INDIVIDUAL TAXPAYER IDENTIFICATION NUMBER
PROGRAM
January
2022-40-013 2022 08/15/24 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.
31 Redaction due to subject matter that might create a risk of circumvention of the law if publicly released.
32 Redaction due to subject matter that might create a risk of circumvention of the law if publicly released.
April 1, 2023 – September 30, 2023│ 43
Report Projected
Issued Report Title and Recommendation Summary
Number Completion
(F = Finding No., R = Recommendation No.)
Date
PLANS TO CLOSE THE AUSTIN TAX PROCESSING CENTER SHOULD BE
HALTED UNTIL HIRING CHALLENGES AND SUBSTANTIAL BACKLOGS AT
REMAINING CENTERS ARE ADDRESSED
February 03/15/24 F-2, R-1: Identify and implement interim solutions that will address the
2022-40-015
2022 resource constraints currently being placed on the Submission Processing
function due to its backlog.
12/15/24 F-3, R-1: Ensure that efforts to evaluate and purchase updated or new mail
opening/sorting technology are timely addressed.
CENTRALIZED PARTNERSHIP AUDIT REGIME RULES HAVE BEEN
IMPLEMENTED; HOWEVER, INITIAL NO-CHANGE RATES ARE HIGH AND
March MEASURABLE GOALS HAVE NOT BEEN ESTABLISHED
2022-30-020
2022
10/15/23 F-2, R-1: Implement a fully systemic method of monitoring and verifying
pushouts to ensure that they are properly reported on partners’ returns.
THE ADMINISTRATION OF PARTIAL PAYMENT INSTALLMENT AGREEMENTS
NEEDS IMPROVEMENT
11/15/23 F-1, R-1: Inform taxpayers of the availability of Partial Payment Installment
Agreements (PPIA) and provide outreach and information in the following
areas: 1) tax topics and tips on the IRS public website; 2) instructions
referencing PPIAs including what is required to qualify for a PPIA; and
3) collection notices.
2022-30-021 March
2022 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
Statement, and financial analyses.
11/15/23 F-2, R-3: Request a change to Computer Paragraph 522, Installment
Agreement – Review Financial Condition, to notify taxpayers that the
financial information that they provide may result in a higher or lower
installment amount or no change to their installment amount.
THE IRS PRIVATE DEBT COLLECTION PROGRAM HAS NOT EFFECTIVELY
REPORTED ALL PROGRAM COSTS OR INCLUDED ADEQUATE DISCLOSURES
March 10/15/23 F-1, R-1: Address the growing balance of $25.8 million in the Cost of
2022-30-022 2022 Services Fund, disclose in its Annual Reports to Congress the net revenue
sent from the Private Debt Collection program to the General Fund, and
determine the amount necessary to retain to pay the Private Collection
Agencies without causing further growth in the Cost of Services Fund.
Potential Funds Put to Better Use: $25,763,453
44 │April 1, 2023 – September 30, 2023
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
12/15/23 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
March Management inventory – with adequate staffing to provide appropriate
2022-46-027
2022 service to taxpayers using each channel.
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
of the five essential elements without manually mailing a rejection letter.
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
March TO BE FINALIZED
2022-15-031
2022
06/15/24 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.
THE CHILD TAX CREDIT UPDATE PORTAL WAS SUCCESSFULLY DEPLOYED,
BUT SECURITY AND PROCESS IMPROVEMENTS ARE NEEDED
May
2022-27-028 2022 09/15/24 F-5, R-1: Ensure that the Child Tax Credit Update Portal and the Secure
Access Digital Identity system associated POA&Ms are completed timely
based on IRS-defined timelines and processes.
PROCESSING OF RECOVERY REBATE CREDIT CLAIMS DURING THE 2021
FILING SEASON
May 10/15/23 F-1, R-1: Review the returns that TIGTA identified and provide corrective
2022-46-032 2022 actions the IRS intends to take.
10/15/23 F-1, R-3: Review the returns that TIGTA identified and take actions necessary
to ensure that taxpayers receive the amount of the Recovery Rebate Credit
they are entitled to receive.
Potential Funds Put to Better Use: $217,927,531
April 1, 2023 – September 30, 2023│ 45
Report Projected
Issued Report Title and Recommendation Summary
Number Completion
(F = Finding No., R = Recommendation No.)
Date
A SERVICE-WIDE STRATEGY IS NEEDED TO ADDRESS CHALLENGES LIMITING
GROWTH IN BUSINESS TAX RETURN ELECTRONIC FILING
May
2022-40-036 2022 F-1, R-1: Develop a Service-wide strategy to incorporate all forms for e-filing.
03/15/24
This strategy should include processes and procedures to compile an
accurate and comprehensive list of forms not available for e-filing, along
with prioritization and specific timelines for the continued addition of forms
for e-filing.
REVIEW OF THE INDEPENDENT OFFICE OF APPEALS COLLECTION DUE
PROCESS PROGRAM
2022-10-043 August
2022 11/15/23 F-1, R-1: Reinforce the existing procedures for Appeals personnel to ensure
that the correct Collection Statute Expiration Dates (CSED) are posted to
taxpayer accounts.
COMPLIANCE EFFORTS ARE NEEDED TO ADDRESS REFUND CLAIMS
REPORTED ON FORM 1139 THAT ARE BASED ON THE CORONVIRUS AID,
RELIEF, AND ECONOMIC SECURITY ACT NET OPERATING LOSS CARRYBACK
PROVISIONS
07/15/24 F-1, R-1: Track and monitor examination results for the 25 “still open”
examinations of Forms 1120, U.S. Corporation Income Tax Return, with
reported net operating losses (NOL) and an associated Form 1139,
August Corporation Application for Tentative Refund, excluding Joint Committee
2022-35-049
2022 Refund cases which currently have specific monitoring requirements
in place.
02/15/25 F-1, R-2: Use the examination results from Recommendation 1 to assess
whether to increase the number of examinations of Forms 1120 with
reported NOL and an associated Form 1139.
07/15/24 F-2, R-1: Review the examination results and computations of proposed
NOL adjustments for the 25 “still open” Form 1120 examinations with
associated Forms 1139, excluding Joint Committee Refund cases which
currently have specific review requirements in place, to determine if the
interim guidance regarding NOLs is being properly followed.
DELAYS CONTINUE TO RESULT IN BUSINESSES NOT RECEIVING PANDEMIC
RELIEF BENEFITS
10/15/23 F-2, R-1: Review the 928 business entities identified that do not appear to
2022-46-059 August qualify as a recovery startup business and take actions needed to recover the
2022 Employee Retention Credits that are determined to be erroneous.
12/15/23 F-3, R-5: Submit a request for the development of a systemic process to
identify Form 941-X, Adjusted Employers QUARTERLY Federal Tax Return or
Claim for Refund, claims that meet referral criteria and alert the Accounts
Management employee when processing these claims of the need to refer
the return to Examination.
46│ April 1, 2023 – September 30, 2023
Report Projected
Issued Report Title and Recommendation Summary
Number Completion
(F = Finding No., R = Recommendation No.)
Date
THE PROCESS FOR TRACKING PHYSICAL SECURITY WEAKNESSES
IDENTIFIED IN IRS FACILITIES DOES NOT ENSURE THAT VULNERABILITIES
ARE PROPERLY ADDRESSED
September 10/15/23 F-1, R-1: Ensure that countermeasure recommendations, approvals or
2022-10-046
2022 denials, implementation decisions and actions, risk acceptance decisions,
and the associated cost of countermeasure implementation are adequately
tracked and maintained in a central location.
10/15/23 F-1, R-3: Ensure that all recommended countermeasures identified in the
most recent risk assessment for each facility are tracked until a new risk
assessment is completed using the new countermeasure tracking mechanism.
CLOUD SERVICES WERE IMPLEMENTED WITHOUT KEY SECURITY CONTROLS,
PLACING TAXPAYER DATA AT RISK
2022-20-052 September
2022 10/15/24 F-1, R-1: Expedite full implementation of the cloud security control
infrastructure **************. 33
THE END-USER INCIDENT MANAGEMENT PROCESS CAN BE IMPROVED
September 11/15/23 F-1, R-1: Ensure that incident ticket handling requirements are followed
2022-20-053
2022 including selecting specific codes related to the issues, documenting
actions taken including the reason for reassignments, and obtaining user
concurrence before closing the incident ticket.
DELAYS IN MANAGEMENT ACTIONS CONTRIBUTE TO THE CONTINUED TAX
PROCESSING CENTER BACKLOGS
September
2022-46-057
2022 01/15/29 F-4, R-1: Ensure that various products and IRS.gov landing pages are
updated to reflect acceptable methods for faxing information to the IRS.
FISCAL YEAR 2022 STATUTORY REVIEW OF DISCLOSURE OF COLLECTION
ACTIVITY WITH RESPECT TO JOINT RETURNS
10/15/23 F-1, R-1: Update the Office of Appeals IRM to provide guidance on what
collection activity must be disclosed and what collection activity must not
be disclosed to taxpayers who jointly filed returns, whether they are married,
divorced, or separated, and whether or not they have mirrored accounts.
10/15/23 F-1, R-2: Require I.R.C. §§ 6103(e)(7) and (e)(8) refresher training for all
September appeals officers and settlement officers in Appeals regarding employee
2022-30-058 requirements to disclose collection activity on jointly filed returns when
2022
requested from individuals who are no longer married or no longer reside in
the same household, whether or not they have mirrored accounts, and the
nondisclosure of prohibited taxpayer information.
03/15/24 F-1, R-3: Update the Taxpayer Advocate Service’s (TAS) IRM 13.1.18,
Resolving TAS Cases, to provide a cross-reference to IRM 13.1.16, Receipt
and Assignment of TAS Cases, which contains commonly encountered
scenarios, explaining what collection activity must be disclosed to taxpayers
who jointly filed returns, whether they are married, divorced, or separated,
and whether or not they have mirrored accounts.
33 Redaction due to subject matter that might create a risk of circumvention of the law if publicly released.
April 1, 2023 – September 30, 2023│ 47
Report Projected
Issued Report Title and Recommendation Summary
Number Completion
(F = Finding No., R = Recommendation No.)
Date
FISCAL YEAR 2022 STATUTORY REVIEW OF COMPLIANCE WITH LEGAL
GUIDELINES WHEN ISSUING LEVIES
06/15/24 F-1, R-3: Ensure that the necessary programming changes are made to
address the recommendations made in last year’s review.
06/15/24 F-2, R-1: Monitor the average processing time of Collection Due Process
September hearing requests and, if warranted, outline and make recommendations
2022-30-061 2022 to revise procedures and/or develop automation tools to ensure the timely
input of the transaction code.
06/15/24 F-3, R-1: Ensure that corrective programming is implemented so
that the Integrated Collection System looks for existing Centralized
Authorization File information, updates the system accordingly,
and notifies the revenue officer when there is a discrepancy between
the Power of Attorney information in the Integrated Collection System
and the Centralized Authorization File.
ADDITIONAL ACTIONS ARE NEEDED TO ENSURE COMPLIANCE WITH THE
SECTION 965 REPATRIATION TAX
10/15/23 F-2, R-1: Revise the CP56 and CP256 notices to add more information on
how the Section 965 installment payments should be made.
September
2022-34-062 10/15/23 F-2, R-2: Ensure that any business requirements developed by the
2022 “Section 965 Core Team” systemically identify all Section 965 payments
that are applied to TY 2019 or later tax modules so they can be
evaluated to determine if they were correctly processed.
10/15/23 F-3, R-2: Develop procedures to identify S Corporation shareholders who
made an election under Section 965(i) and who did not annually submit
the Form 965-A, Individual Report of Net 965 Tax Liability, or did not
report the correct amount of the Section 965 deferral on the Form 965-A.
Potential Increased Revenue: $6,265,523
THE IRS NEEDS TO IMPROVE ITS DATABASE VULNERABILITY SCANNING
AND PATCHING CONTROLS
2022-20-065 September
2022 10/15/24 F-1, R-1: Ensure that ***************** 34 is performed on all IBM
mainframe databases.
MORE SHOULD BE DONE TO INCREASE USE AND AVAILABILITY OF THE
IRS'S TAXPAYER DIGITAL COMMUNICATION TOOLS
05/15/24 F-2, R-1: Ensure that an evaluation plan is developed and implemented
to thoroughly assess the Taxpayer Digital Communication (TDC) program
and its management of the TDC installations. At a minimum, the
November evaluation plan should include clearly stated objectives that measure
2023-30-003 2022 success against well-defined standards and detailed steps for verifying
that sufficient benefits are being realized in relation to the costs being
incurred.
05/15/24 F-3, R-1: Develop a method by which detailed information is obtained from
stakeholders, both taxpayers and IRS employees, to determine why users
may not be interested in TDC installations, what barriers to adoption may
exist within the IRS, and how IRS employees may be able to support
taxpayer adoption.
34 Redaction due to subject matter that might create a risk of circumvention of the law if publicly released.
48│ April 1, 2023 – September 30, 2023
Report Projected
Issued Report Title and Recommendation Summary
Number Completion
(F = Finding No., R = Recommendation No.)
Date
FISCAL YEAR 2023 BIANNUAL INDEPENDENT ASSESSMENT OF
PRIVATE COLLECTION AGENCY PERFORMANCE
December
2023-30-005 2022 F-2, R-1: Ensure that the IRS does not burden taxpayers in existing
01/15/26
payment agreements when Private Collection Agency contracts are
ending by developing a solution to continue to service taxpayers in
active payment arrangements.
OPPORTUNITIES EXIST FOR THE IRS TO DEVELOP A MORE
COORDINATED APPROACH TO EXAMINATION WORKPLAN
DEVELOPMENT AND RESOURCE ALLOCATION
04/15/24 F-1, R-1: Consider adopting a multiyear, comprehensive Examination
Strategic Plan that addresses all workstreams from all divisions to
rank them by risk and priority that can be used to guide resource
allocation. In addition, the plan should contain specific and
February measurable performance goals or expected outcomes to help measure
2023-30-008
2023 progress.
09/15/24 F-2, R-1: Establish a documented annual enterprise-wide examination
planning process that aligns with the multiyear, comprehensive
Examination Strategic Plan.
10/15/23 F-3, R-1: Establish a process to use Tax Gap data annually to identify
opportunities to better align resources that more effectively narrow the
net Tax Gap.
04/15/24 F-4, R-1: Develop a tool to consider risk and other relevant variables
to inform examination resource allocation decisions, then expand its
use to include Examination workstreams from all divisions.
IMPROVEMENTS TO THE EMPLOYMENT TAX EXAMINATION
PROCESS ARE NEEDED TO INCREASE TAXPAYER COMPLIANCE
AND COLLECTION POTENTIAL
11/15/23 F-1, R-1: Require that quality reviews of the Employment Workload
Selection and Delivery Employment Workload Selection and Delivery
Gatekeeper be documented and create a segregation of duties for
managerial reviews to provide effective oversight of the Gatekeeper
function.
February
2023-30-009
2023 F-1, R-2: Ensure that all required managerial reviews are properly
11/15/23
conducted and documented.
11/15/23 F-2, R-2: Issue a policy alert to remind examiners of the procedures
and guidance on the proper language/information that should be
included on Form 4666, Summary of Employment Tax Examination.
11/15/23 F-3, R-1: Ensure that Employment Tax examination managers are
verifying that all required and applicable documentation is included
in the Issue Management System case file prior to case closure, such
as by completing a Manager’s Quality Checklist.
April 1, 2023 – September 30, 2023│ 49
Report Projected
Issued Report Title and Recommendation Summary
Number Completion
(F = Finding No., R = Recommendation No.)
Date
ACTIONS HAVE BEEN TAKEN TO IMPLEMENT TAXPAYER FIRST ACT
PROVISIONS RELATED TO THE IRS INDEPENDENT OFFICE OF APPEALS;
HOWEVER, SOME IMPROVEMENTS ARE STILL NEEDED
10/15/23 F-1, R-1: Establish a process with the appropriate Business Operating
Divisions to identify, track, and update forms, letters, publications,
notices, websites, and social media that still require the new IRS
Independent Office of Appeals name.
February F-2, R-1: Re-emphasize the requirements for Appeals personnel to:
2023-15-010 2023 01/15/24
1) input the proper Appeals Centralized Database System coding and
documentation in their case history related to the I.R.C. case file access
rights, and 2) provide the case file to the specified taxpayer at least 10
calendar days before the date of the Appeals conference or document in
the case history if the taxpayer waives this right.
12/15/24 F-3, R-1: Develop and implement: 1) guidance that clearly defines
matters for which Appeals consideration has been denied and is required
to follow I.R.C. § 7803(e)(5), 2) a process for obtaining approval to deny a
taxpayer’s appeal under I.R.C. § 7803(e)(5) as well as a mechanism to
track these types of cases, and 3) procedures to respond to a taxpayer's
protest of a denied appeal under I.R.C. § 7803(e)(5).
THE IRS HAS NOT ADEQUATELY PRIORITIZED FEDERAL CIVILIAN EMPLOYEE
NONFILERS
03/15/24 F-1, R-1: Enhance IRM procedures and develop annual refresher training
to the Federal Employee/Retiree Delinquency Initiative (FERDI) staff that
can be used to develop potential fraud referrals.
02/15/24 F-1, R-2: Revise IRM 5.19.18 to refer employees to the Fraud Handbook
for fraud and/or willfulness procedures as soon as indications of fraud are
present in any FERDI nonfiler case.
03/15/24 F-1, R-3: Conduct an annual analysis on open FERDI cases that have
multiple nonfiling years and determine the next course of action
dependent upon this analysis and recommendations from the Office of
March Fraud Enforcement. Cases that are deemed to have indicators of
2023-30-011 2023 willfulness and/or fraud should be referred to Criminal Investigation.
07/15/24 F-2, R-1: Prioritize all FERDI Taxpayer Delinquent Account and Taxpayer
Delinquency Investigations (TDI) work at the designated campus site.
03/15/25 F-2, R-2: Consider systemically sending the letter LT 26, We Have No
Record of Receiving Your Tax Returns, to the taxpayer within 30 days of
the case moving into standalone TDI inventory.
03/15/25 F-2, R-3: Add verbiage to the letter LT 39, Reminder Notice, including
the outstanding TDI and how the taxpayer can resolve it.
03/15/25 F-2, R-4: Implement a programming fix to ensure that FERDI TDIs are
properly blocked when a shelved transaction code is being used.
Additionally, update IRM 5.19.17 to improve instructions when working
FERDI accounts to reduce the risk of FERDI accounts being shelved
incorrectly.
03/15/25 F-2, R-5: Complete Individual Master File Case Creation Nonfiler
Identification Process processing for TY 2020 as soon as a determination
has been made that all TY 2020 returns have been processed.
50│ April 1, 2023 – September 30, 2023
Report Projected Report Title and Recommendation Summary
(F= Finding No. and R=Recommendation No.)
Number Completion
Date
ADDITIONAL ACTIONS ARE NEEDED TO IMPROVE AND SECURE THE INCOME
VERIFICATION EXPRESS SERVICE PROGRAM
07/15/24 F-2, R-1: Ensure that the business transcript request capability is
implemented as soon after the January 2023 legislative deadline as
possible.
March 02/15/25 F-3, R-1: Complete a usage study and document a decision regarding if
2023-45-014 2023 the IRS will mandate that participants use the Taxpayer First Act Income
Verification Express Service system.
01/15/25 F-6, R-1: Develop a process to ensure that transcript requests for victims
of identity theft are not processed erroneously. These processes should
include systemic tools to prevent employees from processing the requests.
In addition, the processes should continually identify and address tax
examiners processing the transcript requests erroneously.
ACTIONS ARE NEEDED TO IMPROVE THE COMPLETENESS, DEVELOPMENT,
AND REVIEW OF IRS TAX GAP ESTIMATES
10/15/23 F-1, R-2: Improve the transparency of the Tax Gap estimates in future
revisions of the Tax Gap report by including an enhanced discussion of
the limitations of the Tax Gap estimates, including the types of taxpayer
noncompliance that are not included in the estimates and those types
March that may not be fully captured.
2023-10-016
2023
08/30/24 F-3, R-2: Reestablish an advisory group to review any updates to the
Tax Gap methodology that would significantly affect the estimates.
10/15/24 F-3, R-3: Develop a formal process for documenting the advisory group’s
feedback on the Tax Gap estimates, including making a high-level
summary of its feedback available to the public.
THE ENTERPRISE CASE MANAGEMENT SYSTEM DID NOT CONSISTENTLY
MEET CLOUD SECURITY REQUIREMENTS
March 02/15/24 F-1, R-2: Complete the development and testing of an automated
2023-20-018
2023 malicious code protection application and implement the application
on all Linux servers.
02/15/24 F-2, R-1: Ensure that privileged user activity logs are regularly monitored
and inactive accounts deactivated in accordance with agency security
requirements.
THE IRS ELIMINATED ITS EMPLOYEE SUGGESTION PROGRAM WITHOUT
PLANS FOR A REPLACEMENT
03/15/24 F-1, R-1: Contact comparable Federal agencies with the highest levels of
March engagement and employee satisfaction scores and identify best practices
2023-30-020
2023 of those agencies' Employee Suggestion Programs.
11/15/24 F-1, R-2: Develop options for a new Service-wide employee feedback
process to support the agency’s transformation efforts under the Inflation
Reduction Act.
April 1, 2023 – September 30, 2023│ 51
Inspections and Evaluations Statistical Reports
Evaluation Reports With Unimplemented Corrective Actions
The Inspector General Act requires identification of recommendations described in previous
semiannual reports, including the potential cost savings of those recommendations, for which
corrective actions have not been completed. The following list is based on information from the
Treasury Department’s Joint Audit Management Enterprise System (JAMES).
Report Issued Projected
Report Title and Recommendation Summary
Number Completion
(F = Finding No., R = Recommendation No.)
Date
PHYSICAL SECURITY CONTROLS AT THE ******************** 35
2/15/2024 F-1, R-1: Recommendation was redacted in its entirety.
October
2023-IE-R001
2022 8/15/2024 F-5, R-1: Recommendation was redacted in its entirety.
7/15/2024 F-6, R-1: Recommendation was redacted in its entirety.
35 Redaction due to subject matter that might create a risk of circumvention of the law if publicly released.
52│ April 1, 2023 – September 30, 2023
April 1, 2023 – September 30, 2023│ 53
Appendix I
Other Reports
The Inspector General Act requires Inspectors General to address the following issues for the
Offices of Audit and Inspections and Evaluations: 36
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, 2023, 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, 2023, 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, 2023, 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, 2023, 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.
Management Decisions Issued in the Current Reporting
Period For Any Reports Issued in a Prior Reporting As of September 30, 2023, there were no
Period reports issued during the prior reporting
Provide a summary of reports issued before the period for which management’s response
beginning of the current reporting period for which a was received during the current reporting
management response was received during the current period.
reporting period.
36 Results listed are for this reporting period only.
54│ April 1, 2023 – September 30, 2023
Disclosure
As of September 30, 2023, there were no
Provide detailed descriptions of the circumstances of reports that were closed and not disclosed to
each inspection, evaluation, and audit that was closed by the public.
the agency and was not disclosed to the public.
Review of Legislation and Regulations
TIGTA’s Office of Chief Counsel reviewed 165
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.
April 1, 2023 – September 30, 2023│ 55
Appendix II
Audit Products
Issued April 1, 2023, Through September 30, 2023 37
Report Title Report Number/Link38
April 2023
Annual Assessment of the IRS’s Information Technology Program for Fiscal Year 2022 2023-20-006
Implementation of the Taxpayer First Act Provision Regarding the Management and Purchase
of Information Technology Resources Needs Improvement 2023-25-017
May 2023
The Knowledge Management Program Will Benefit From Addressing User Concerns and
2023-30-024
Improving Performance Measures and Controls Over Employee Costs
Disaster Recovery of Information Systems That Support Mission Essential Functions
2023-20-023
Needs Improvement
Interim Results of the 2023 Filing Season 2023-40-029
Additional Actions Are Needed to Reduce Accounts Management Function
2023-46-026
Inventories to Below Pre‑Pandemic Levels
Fiscal Year 2022 Improper Payment Reporting Requirements Were Largely Met;
2023-40-032
However, Improper Payment Estimates Are Less Precise
Plans Were Made to Implement the Taxpayer Experience Strategy, but Progress
2023-15-028
Is Not Monitored
Recurring Identification Is Needed to Ensure That Employers Full Pay the Deferred
2023-46-030
Social Security Tax
Opportunities Exist to Improve the Accuracy of Information in the Centralized Authorization
2023-40-033
File and Increase the Use of the Tax Pro Account System
The IRS Large Business and International Division Should Consider Shifting Individual
2023-30-019
Examination Resources to More Productive Examinations
Services to Underserved Communities Have Been Ongoing; However, an Agencywide Strategy
2023-15-027
Has Not Been Developed
June 2023
Planning Efforts to Hire Employees Who Conduct Audits of High Earners and Large Businesses
2023-10-025
Could Be Improved
Additional Actions Are Needed to Improve Data Collection and Analysis of Whistleblower
2023-35-031
Claims and Ensure Full Compliance With the Taxpayer First Act
Actions Have Been Taken to Improve the Privacy Program; However, Some Privacy Controls
2023-20-034
Have Not Been Fully Implemented and Assessed
American Rescue Plan Act: Continued Review of Premium Tax Credit Provisions 2023-47-036
American Rescue Plan Act: Review of the Reconciliation of the Child Tax Credit 2023-47-035
American Rescue Plan Act: Assessment of the Expanded Child and Dependent Care and
2023-47-037
Earned Income Tax Credits
37 Unless otherwise noted, IRS management decisions were made by the end of the reporting period for all audit products
listed in this appendix.
38 Dollar values for any recommendations with Questioned Costs and/or Funds Put to Better Use are available in the
Outcome Measure Appendix of the report linked, if applicable.
56│ April 1, 2023 – September 30, 2023
July 2023
Actions Are Needed to Improve the Zero Trust Architecture Implementation 2023-20-039
The Cyber Threat Hunting Program Properly Conducts Analysis to Identify Threats;
2023-20-040
However, Guidance, Documentation, and Controls Need to Be Improved
The Customer Callback System Benefits Taxpayers; However, Performance Measures
2023-10-046
Are Not Comprehensive and More Callers Could Qualify for Callback Offers
Review of the IRS Independent Office of Appeals Collection Due Process Program 2023-10-038
Review of the Internal Revenue Service’s Purchase Card Violations Report 2023-10-052
August 2023
Fiscal Year 2023 IRS Federal Information Security Modernization Act Evaluation 2023-20-041
Expanded Use of Special Payment Incentives Could Help Improve
2023-10-043
Recruitment and Retention Efforts
Indicators Used to Prevent Filing of Tax Returns for Deceased Taxpayers
Were Incorrectly Placed on Some Taxpayer Accounts 2023-40-044
Security Weaknesses Are Not Timely Resolved and Effectively Managed 2023-20-042
Fiscal Year 2023 Statutory Review of Restrictions on Directly Contacting 2023-30-051
Represented Taxpayers
Processing of Recovery Rebate Credit Claims During the 2022 Filing Season 2023-47-056
Processes Are in Place to Identify and Address Potential Conflicts of Interest in Large
Corporate Tax Administration 2023-40-047
Known Exploited Vulnerabilities That Remain Unremediated Could Put the IRS Network at Risk 2023-20-048
Fiscal Year 2023 Statutory Review of Compliance With Notifying Taxpayers of Their Rights
2023-10-049
When Requested to Extend the Assessment Statute
The IRS Needs to Leverage the Most Effective Training for Revenue Agents
Examining High-Income Taxpayers 2023-30-054
September 2023
The Internal Revenue Service Has Experienced Challenges in Transitioning to Electronic
2023-10-050
Records
Actions Have Been Taken to Enhance Fuel Tax Credit Screening and Examination Processes;
2023-30-053
However, Improvements Are Still Needed
Fiscal Year 2023 Review of Compliance With Legal Guidelines When Conducting
2023-30-059
Seizures of Taxpayers’ Property
Fiscal Year 2023 Mandatory Review of Compliance With the Freedom of Information Act 2023-10-055
Fiscal Year 2023 Statutory Audit of Compliance With Legal Guidelines Restricting the Use of
2023-30-058
Records of Tax Enforcement Results
Actions Need to Be Taken to Improve the Cyber Security Assessment and Management
2023-20-064
Application Security Controls
Fiscal Year 2023 Statutory Review of Compliance With Notice of Federal Tax Lien Filing
2023-30-057
Collection Due Process Procedures
Fiscal Year 2023 Mandatory Review of Disclosure of Collection Activity With Respect
2023-30-063
to Joint Returns
April 1, 2023 – September 30, 2023│ 57
Fiscal Year 2023 Statutory Review of Potential Fair Tax Collection Practices Violations 2023-30-060
The IRS Implemented Processes to Prevent Future Unauthorized Disclosures
2023-2S-069
of Form 990-T Information
Fiscal Year 2023 Statutory Review of Compliance With Legal Guidelines When Issuing Levies 2023-30-066
The Enterprise Physical Access Control System Implementation and Physical Security
2023-20-062
Controls Need Improvement
Key Events of the IRS’s Planning Efforts to Implement Login.gov for Taxpayer
2023-2S-070
Identity Verification
Opportunities Exist to Improve the Audit Selection Process for the Qualified Plug-In
2023-30-065
Electric Drive Motor Vehicle Credit
58│ April 1, 2023 – September 30, 2023
Appendix III
Inspections and Evaluations Products
Issued April 1, 2023, Through September 30, 2023 39
Report Title Report Number/Link 40
May 2023
Actions Are Being Taken to Reduce Risks to Employees Whose Names Are Required to Be
2023-IE-R004
Included on Internal Revenue Service Correspondence
Assessment of the Internal Revenue Service’s Active Shooter Readiness and Training 2023-IE-R005
July 2023
Actions Are Needed to Address Inaccurate, Incomplete, and Inconsistent Taxpayer Assistance
2023-IE-R006
Center Information Provided to Taxpayers
August 2023
Sensitive Tax Information Is Not Being Controlled Adequately When Shipping to and From Tax 2023-IE-R007
Processing Centers
Sensitive Business and Individual Tax Account Information Stored on Microfilm 2023-IE-R008
Cannot Be Located
September 2023
Process, Training, and Awareness Enhancements Can Better Inform Employees on How to 2023-IE-R009
Report Taxpayer Assaults and Threats
Inflation Reduction Act: Assessment of the IRS’s Efforts to Deliver Expected Improvements for 2023-IE-R010
the 2023 Filing Season
Review of the IRS’s Process to Perform Mandatory Annual Examinations of Presidential Returns 2023-IE-R011
for Tax Years 2000 Through 2021
Federal Acquisition Regulation Requirements Were Either Not Performed or Documented When 2023-IE-R012
Awarding and Administering Expert Witness Contracts
39 Unless otherwise noted, IRS management decisions were made by the end of the reporting period for all audit products
listed in this appendix.
40 Dollar values for any recommendations with Questioned Costs and/or Funds Put to Better Use are available in the
Outcome Measure Appendix of the report linked, if applicable.
April 1, 2023 – September 30, 2023│ 59
Appendix IV
TIGTA’s Statutory Reporting Requirements
The following table reflects the FY 2023 statutory reviews.
Reference to
Explanation of the Provision Comments/TIGTA Audit Status
Statutory Coverage
Rep. No. 2023-30-058; Sep 2023
TIGTA found instances of
noncompliance with RRA 98 § 1204
requirements. Specifically, TIGTA
identified the following noncompliance:
Enforcement Statistics Requires TIGTA to evaluate the IRS’s 13 violations in which a Record of Tax
compliance with restrictions under Enforcement Results was used to
I.R.C. § 7803(d)(1)(A) RRA 98 § 1204 on the use of evaluate an employee § 1204(a),
enforcement statistics to evaluate IRS 14 instances in which IRS
employees. management failed to either maintain
the retention standard documentation
or ensure that it was appropriately
signed (§ 1204(b)), and 25 managers
who did not complete the FY 2022
quarterly certification (§ 1204(c)).
Additionally, the IRS self-reported two
instances of § 1204(a)
noncompliance.
Rep. No. 2023-30-051; Aug 2023
TIGTA reviewed a sample of 132
taxpayers and found 12 instances in
which the Field Collection employee
potentially violated a taxpayer’s
Restrictions on Directly Contacting Requires TIGTA to evaluate the IRS’s rights under I.R.C. § 7521 and fair
Taxpayers compliance with restrictions under tax collection practices of I.R.C.
I.R.C. § 7521 on directly contacting § 6304(a)(2). TIGTA also reviewed
I.R.C. § 7803(d)(1)(A)(ii) taxpayers who have indicated they prefer 129 cases in the Embedded Quality
their representatives be contacted. Review System data in which the quality
element “right to representation not
observed,” was reported as a potential
exception and the reviewer included a
narrative explaining the specific nature
of the violation. TIGTA found that for
the 129 potential violations, there were
48 taxpayers for whom the IRS did not
comply with the law regarding the right
to representation. TIGTA concluded that
the IRS has significant gaps in both its
reporting of potential employee
misconduct and in disciplining
employees for potential taxpayer
violations.
60│ April 1, 2023 – September 30, 2023
Reference to
Explanation of the Provision Comments/TIGTA Audit Status
Statutory Coverage
Rep. No. 2023-30-057; Sep 2023
Tests of a statistically valid sample of
116 Notice of Federal Tax Liens
Filing of a Notice of Lien Requires TIGTA to evaluate the IRS’s determined that the IRS did not always
compliance with required procedures mail the Notice of Federal Tax Lien
I.R.C. § 7803(d)(1)(A)(iii) under I.R.C. § 6320(a) upon the filing of a filings and Collection Due Process
notice of lien. appeal rights to the taxpayers’ last
known addresses. The sample
identified four cases for which the
address on the original lien notices
and the current address on the IRS
computer system did not agree.
Rep. No. 2023-10-049; Aug 2023
TIGTA reviewed a statistical sample of
Extensions of the Statute of Requires TIGTA to include information
53 closed taxpayer audit files with
Limitations for Assessment of Tax regarding extensions of the statute of
assessment statute extensions and
limitations for assessment of tax under
I.R.C. § 7803(d)(1)(C) found that the IRS complied with I.R.C.
I.R.C. § 6501 and the provision of notice to
§ 6501(c)(4)(B). However, TIGTA
I.R.C. § 6501(c)(4)(B) taxpayers regarding the right to refuse or
found that seven of these taxpayer
limit the extension of particular issues or a
audit files did not contain required
particular period of time.
documentation to support that
taxpayers and/or taxpayers’
representatives were provided with the
required notifications. The IRS
continues to have difficulties providing
most of the paper documents
requested.
Rep. No. 2023-30-066; Sep 2023
TIGTA reviewed levies issued by the
Requires TIGTA to evaluate the IRS’s IRS’s Automated Levy Programs
Levies
compliance with required procedures under for more than 2 million taxpayers
I.R.C. § 6330 regarding levies. during the period July 1, 2021, through
I.R.C. § 7803(d)(1)(A)(iv)
June 30, 2022, and certain levies
issued by revenue officers. TIGTA
identified 11,258 instances of
noncompliance that resulted in
violations of taxpayers’ rights and
taxpayers being burdened.
Rep. No. 2023-10-038; Jul 2023
TIGTA reviewed a statistical sample of
Requires TIGTA to evaluate the IRS’s 106 cases and identified that Appeals
Collection Due Process
compliance with required procedures did not always classify taxpayer
under I.R.C. §§ 6320 and 6330 regarding requests properly or provide only one
I.R.C. §§ 7803(d)(1)(A)(iii) and (iv)
taxpayers’ rights to appeal lien or levy hearing with respect to the taxable
actions. period related to the unpaid tax.
Similar to prior audits, TIGTA identified
processing errors in which the IRS
either incorrectly extended the CSED,
allowing the IRS additional time to
collect the delinquent taxes; or
incorrectly shortened the CSED,
resulting in the IRS having less time to
collect the delinquent taxes.
April 1, 2023 – September 30, 2023│ 61
Reference to
Explanation of the Provision Comments/TIGTA Audit Status
Statutory Coverage
Rep. No. 2023-30-059; Sep 2023
TIGTA reviewed 69 of the 88 seizures
Seizures Requires TIGTA to evaluate the IRS’s the IRS conducted between
compliance with required procedures July 1, 2021, through June 30, 2022.
I.R.C. § 7803(d)(1)(A)(iv) under I.R.C. §§ 6330 through 6344 The IRS generally adhered to
when conducting seizures. procedures that help ensure
compliance with I.R.C. §§ 6330
through 6344. However, TIGTA
identified five instances in which Field
Collection employees did not comply
with a particular internal control or
procedure.
Memorandum to IRS; Mar 2023
TIGTA’s review of taxpayer accounts on
both the Individual and Business
Master Files showed that the IRS did
Taxpayer Designations – Illegal Tax An evaluation of the IRS’s compliance not reintroduce past Illegal Tax
Protester Designation and Similar with restrictions under RRA 98 § 3707 Protester codes or similar designations
Designations on designation of taxpayers. on taxpayer accounts during the review
period of October 1, 2021, through
I.R.C. § 7803(d)(1)(A)(v) June 30, 2022. Since TIGTA’s first
review in FY 1999, when the IRS
removed the Illegal Tax Protester code
from the Master File, TIGTA has not
identified any uses of the code or any
other coding of a similar designation
on the Master File.
Rep. No. 2023-30-063; Sep 2023
TIGTA reviewed 60 case files from the
Small Business/Self-Employed Division
to determine whether employees
Disclosure of Collection Activity With Requires TIGTA to review and certify followed the joint return disclosure
Respect to Joint Returns whether the IRS is complying with requirements on collection information
I.R.C. § 6103(e)(8), which requires the requests. TIGTA determined that
I.R.C. § 7803(d)(1)(B) (TIGTA IRS to disclose information to an disclosure requirements were not
requirement) individual filing a joint return on followed in eight (27 percent) of the
collection activity involving the other Automated Collection System history
I.R.C. § 6103(e)(8) (IRS requirement) individual filing the return. files, and seven (23 percent) of the
Field Collection history files.
Taxpayer Complaints Requires TIGTA to include in each
Semiannual Report to Congress the
I.R.C. § 7803(d)(2)(A) number of taxpayer complaints received Statistical results on the number of
and the number of employee taxpayer complaints received are
misconduct and taxpayer abuse shown on page 35.
allegations received by the IRS or TIGTA
from taxpayers, IRS employees, and
other sources.
62│ April 1, 2023 – September 30, 2023
Reference to
Explanation of the Provision Comments/TIGTA Audit Status
Statutory Coverage
Rep. No. 2023-30-060; Sep 2023
TIGTA’s review of 14 employee
misconduct cases coded as potential
Administrative or Civil Actions With Requires TIGTA to include information Fair Tax Collection Practices (FTCP)
Respect to the Tax Collection regarding any administrative or civil violations and closed on the Automated
Practices Act of 1996 actions with respect to violation of Labor and Employee Relations Tracking
the fair debt collection provision of System (ALERTS) database in FY 2022
I.R.C. § 7803(d)(1)(G) I.R.C. § 6304, including a summary of identified one case coded with the
I.R.C. § 6304 such actions and any resulting incorrect FTCP issue code. TIGTA
judgments or awards granted. reviewed 89 Small Business/Self-
RRA 98 § 3466 Employed Division employee
misconduct cases closed on the
ALERTS database in FY 2022 and not
coded as FTCP potential violations and
did not identify any cases closed on the
ALERTS database in FY 2022 that were
potentially coded incorrectly as
non-FTCP violations.
Rep. No. 2023-10-055; Sep 2023
TIGTA reviewed a statistical sample of
83 of the 3,423 FY 2022 Freedom of
Denials of Requests for Information Requires TIGTA to include information Information Act requests for which the
regarding improper denial of requests IRS denied the requested information
I.R.C. § 7803(d)(1)(F) for information from the IRS, based on a either partially or fully based on
I.R.C. § 7803(d)(3)(A) statistically valid sample of the total exemption (b)(7), replied that no
number of determinations made by the responsive records were available,
IRS to deny written requests to disclose or closed the request as imperfect.
information to taxpayers on the basis of TIGTA also reviewed all 22 FY 2022
I.R.C. § 6103 or 5 U.S.C. § 552(b)(7). I.R.C. § 6103(c) and (e) requests for
which the IRS withheld information
from the requestor. While TIGTA
determined that information was
properly withheld or released in most
cases, the Disclosure Office did not
follow Freedom of Information Act
requirements when redacting or
releasing information for 18 cases
(22 percent).
April 1, 2023 – September 30, 2023│ 63
Reference to
Explanation of the Provision Comments/TIGTA Audit Status
Statutory Coverage
Information Technology Reviews:
Rep. No. 2023-20-013; Mar 2023
Rep. No. 2023-20-006; Apr 2023
Rep. No. 2023-25-017; Apr 2023
Rep. No. 2023-20-023; May 2023
Adequacy and Security of the Requires TIGTA to evaluate the IRS’s
Technology of the IRS adequacy and security of its technology. Rep. No. 2023-40-033; May 2023
I.R.C. § 7803(d)(1)(D) Rep. No. 2023-46-030; May 2023
Rep. No. 2023-35-031; Jun 2023
Rep. No. 2023-47-035; Jun 2023
Rep. No. 2023-47-036; Jun 2023
Rep. No. 2023-47-037; Jun 2023
Rep. No. 2023-10-046; Jul 2023
Rep. No. 2023-IE-R006; Jul 2023
Rep. No. 2023-40-044; Aug 2023
Rep. No. 2023-10-050; Sep 2023
Security Reviews:
Rep. No. 2023-20-002; Nov 2022
Rep. No. 2023-20-018; Mar 2023
Rep. No. 2023-20-034; Jun 2023
Rep. No. 2023-20-039; Jul 2023
Rep. No. 2023-20-040; Jul 2023
Rep. No. 2023-20-041; Aug 2023
Rep. No. 2023-20-042; Aug 2023
Rep. No. 2023-20-048; Aug 2023
64│ April 1, 2023 – September 30, 2023
Reference to
Explanation of the Provision Comments/TIGTA Audit Status
Statutory Coverage
Rep. No. 2023-10-012; Jan 2023
TIGTA’s review of the IRS’s purchase
card program found that controls are
Government Charge Card Abuse Requires TIGTA to report on the IRS’s generally effective, and the number of
Prevention Act of 2012 progress in implementing purchase and purchase card violations identified by
travel card audit recommendations. the IRS Credit Card Services Branch
Pub. L. No. 112-194, 126 Stat. were minimal and generally for nominal
1445 (codified as amended at amounts.
5 U.S.C. § 5701 note, 10 U.S.C.
§ 2784, and 41 § U.S.C. 1909) Rep. No. 2023-10-052; Jul 2023
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 Office
were minimal and generally for nominal
amounts.
Rep. No. 2023-40-032; May 2023
The IRS was largely compliant with the
reporting requirements contained in
Improper Payments Elimination and Requires TIGTA to assess the IRS’s the Payment Integrity Information Act of
Recovery Act of 2010 compliance with improper payment 2019 for FY 2022. However, the IRS
requirements. still has not satisfied the Payment
31 U.S.C. § 3321 Integrity Act goal to reduce improper
payment rates to less than 10 percent.
Rep. No. 2023-30-005; Dec 2022
During the second contract negotiation
process, the IRS did not assign any new
accounts to the private collection
Fixing America’s Surface Requires TIGTA to perform an agencies for almost 9 months. Two
Transportation Act independent biannual assessment of contractors from the first contract were
private collection agency performance. not selected for the second contract,
Pub. L. No. 114-94, 129 Stat. 1312 and payment arrangements that were
(2015) set up by these contractors were
summarily cancelled at the end of the
first contract, causing burden to those
taxpayers. Additionally, the Taxpayer
First Act contains adjustments to private
collection agency case inventory
intended to protect certain low-income
taxpayers from being subject to private
collection agency collections. However,
TIGTA identified 14,141 taxpayers
with new tax years assigned to the
private collection agencies on or after
January 1, 2021, whose low incomes
should have resulted in the IRS recalling
their accounts.
April 1, 2023 – September 30, 2023│ 65
Appendix V
Inspector General Peer Review Activity
This appendix implements § 989C of the Dodd-Frank Wall Street Reform and Consumer
Protection Act. 41
For the period April 1, 2023 – September 30, 2023:
Peer Reviews Conducted of TIGTA by Another Office of Inspector General
• A peer review of TIGTA was not conducted during the reporting period.
Outstanding Recommendations From Peer Reviews of TIGTA
• There are no outstanding recommendations from peer reviews of TIGTA.
Peer Reviews Conducted by TIGTA
• TIGTA did not conduct a peer review during this reporting period.
Outstanding Recommendations From Peer Reviews Conducted by TIGTA
• There are no outstanding recommendations from peer reviews conducted by TIGTA.
41 Pub. L. 111-203, 124 Stat. 1376, 1945-46 (2010) (codified at 5 U.S.C. § 405(a)(8)-(10)).
66│ April 1, 2023 – September 30, 2023
April 1, 2023 – September 30, 2023│ 67
Appendix VI
Data Tables Provided by the Internal Revenue Service
The memorandum copied below is the IRS’s transmittal to TIGTA. The IRS provided the
tables that follow the memorandum. They consist of IRS employee misconduct reports from
the IRS Automated Labor and Employee Relations Tracking System (ALERTS) for the period
April 1, 2023, through September 30, 2023. Also, data concerning substantiated RRA 98
§ 1203 allegations for the same period are included. See Appendix VII for § 1203 Standards.
IRS management conducted inquiries into the cases reflected in these tables.
Internal Revenue Service Memorandum
The Following Tables Are Provided by the IRS:
68│ April 1, 2023 – September 30, 2023
Report of Employee Misconduct by Disposition Groups
Period Covering April 1, 2023, Through September 30, 2023
Employee Employee Tax TIGTA Report
Administrative
Disposition Character Compliance of Totals
Case
Investigation Case Investigation
ALTERNATIVE DISCIPLINE: IN LIEU OF
REPRIMAND
0 0 0 0
ALTERNATIVE DISCIPLINE: IN LIEU OF
SUSPENSION
7 5 6 18
ADMONISHMENT 68 121 25 214
CASE SUSPENDED PENDING EMPLOYEE
RETURN TO DUTY
CLEARANCE LETTER 18 16 24 58
CLOSED - SUPPLEMENTAL REQUESTED
CLOSED WITHOUT ACTION CAUTIONARY
LETTER
85 71 100 45 301
CLOSED WITHOUT ACTION LETTER 36 15 14 25 90
FORWARDED TO TIGTA 15 15
INDEFINITE SUSPENSION 0 0
ORAL COUNSELING 5 0 5
PROBATION/SEPARATION 309 4 0 7 320
PROSECUTION PENDING FOR TIGTA’S ROI
REMOVAL AT U.S. OFFICE OF PERSONNEL
MANAGEMENT DIRECTION
4 4
REMOVAL (PROBATION PERIOD COMPLETE) 36 0 7 30 73
REPRIMAND 72 5 42 26 145
RESIGNATION, RETIREMENT, ETC.
(REASON NOTED ON SF50)
17 5 10 15 47
RESIGNATION, RETIREMENT, ETC. (REASON
NOT NOTED ON SF50)
135 0 20 14 169
SEPARATION OF TEMPORARY EMPLOYEE
SUSPENSION, 14 DAYS OR LESS 71 0 46 40 157
SUSPENSION, MORE THAN 14 DAYS 18 4 15 37
TERMINATION FOR ABANDONMENT OF
POSITION
10 10
WRITTEN COUNSELING 67 10 164 29 270
TOTAL 969 114 549 301 1,933
Source: Automated Labor and Employee Relations Tracking System (ALERTS) (extract date: October 2, 2023).
Columns containing numbers of three or less and protected by I.R.C. § 6103 are annotated with a zero and are
not reflected in the column and row totals.
April 1, 2023 – September 30, 2023│ 69
Report of Employee Misconduct National Summary
Period Covering April 1, 2023, Through September 30, 2023
Cases Closed
Cases
Inventory Open Conduct Non- Ending
Conduct Merged
Case Type Inventory Cases Conduct Inventory
Issues With Other
Received Issues
Cases
Administrative
1,027 1,142 1,661 34 5 469
Case
Employee
Character 91 140 144 6 81
Investigation
Employee Tax
Compliance 700 855 595 37 923
Case
TIGTA Report of
375 389 373 0 391
Investigation
Total 2,193 2,526 2,773 77 5 1,864
Source: ALERTS (extract date: October 2, 2023). Columns containing numbers of three or less and protected by
I.R.C. § 6103 are annotated with a zero and are not reflected in the column and row totals.
Administrative Case - Any matter involving an employee in which management conducted an inquiry into alleged
misconduct.
Background Investigations - Any matter involving a National Background Investigation Center 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.
70│ April 1, 2023 – September 30, 2023
Summary of Substantiated I.R.C. Section 1203
Inquiries Recorded in ALERTS
Period Covering April 1, 2023, Through September 30, 2023
Removed In
Resigned/ Probation Penalty
§ 1203 Violation Removals On Other Personnel Total
Retired Separation Mitigated
Grounds Process
1203(b)(2): FALSE 0 0
STATEMENT UNDER OATH
1203(b)(3): CIVIL 0 0
RIGHTS/CONSTRUCTIVE
VIOLATION
1203(b)(4): CONCEALED 0 0 0 0
WORK ERROR
1203(b)(8): WILLFUL 9 5 0 11 61 86
UNTIMELY RETURN
1203(b)(9): WILLFUL 15 0 0 0 16 31
UNDERSTATED TAX
Total 24 5 0 11 77 117
Source: ALERTS (extract date: October 2, 2023). Columns containing numbers of three or less and protected by
I.R.C. § 6103 are annotated with a zero and are not reflected in the column and row totals.
The cases reported as “Removals” and “Penalty Mitigated” do not reflect the results of any third-party appeal.
April 1, 2023 – September 30, 2023│ 71
Appendix VII
Section 1203 Standards
In general, the IRS Commissioner shall terminate any IRS employee if there is a final
administrative or judicial determination that, in the performance of official duties, such
employee committed any misconduct violations outlined below. Such termination shall be a
removal for cause on charges of misconduct.
Misconduct violations include:
• Willfully failing to obtain the required approval signatures on documents authorizing the
seizure of a taxpayer’s home, personal belongings, or business assets;
• Providing a false statement under oath with respect to a material matter involving a
taxpayer or taxpayer representative;
• Violating, with respect to a taxpayer, taxpayer representative, or other employee of the
IRS, any right under the Constitution of the United States, or any civil right established
under Title VI or VII of the Civil Rights Act of 1964; Title IX of the Education Amendments
of 1972; Age Discrimination in Employment Act of 1967; Age Discrimination Act of 1975;
Section 501 or 504 of the Rehabilitation Act of 1973; or Title I of the Americans With
Disabilities Act of 1990;
• Falsifying or destroying documents to conceal mistakes made by any employee with
respect to a matter involving a taxpayer or taxpayer representative;
• Committing assault or battery on a taxpayer, taxpayer representative, or another
employee of the IRS, but only if there is a criminal conviction or a final judgment by a
court in a civil case with respect to the assault or battery;
• Violating the I.R.C., the Treasury Department regulations, or policies of the IRS (including
the IRM) for the purpose of retaliating against or harassing a taxpayer, taxpayer
representative, or other employee of the IRS;
• Willfully misusing provisions of I.R.C. § 6103 for the purpose of concealing information
from a congressional inquiry;
• Willfully failing to file any return of tax required under the I.R.C. on or before the date
prescribed therefore (including any extensions), unless such failure is due to reasonable
cause and not to willful neglect;
• Willfully understating Federal tax liability, unless such understatement is due to
reasonable cause and not to willful neglect; and
• Threatening to audit a taxpayer for the purpose of extracting personal gain or benefit.
The IRS Commissioner may mitigate the penalty of removal for the misconduct violations
outlined above. The exercise of this authority shall be at the sole discretion of the
Commissioner and may not be delegated to any other officer. The Commissioner may
establish a procedure that will be used to decide whether an individual should be referred to
the Commissioner for determination. Any mitigation determination by the Commissioner in
these matters may not be appealed in any administrative or judicial proceeding.
72│ April 1, 2023 – September 30, 2023
Glossary of Abbreviations
ALERTS Automated Labor and Employee Relations Tracking System
CSED Collection Statute Expiration Dates
CY Calendar Year
EIN Employer Identification Number
FERDI Federal Employee/Retiree Delinquency Initiative
FTCP Fair Tax Collection Practices
FY Fiscal Year
ITIN Individual Taxpayer Identification Number
IRA Inflation Reduction Act of 2022
I.R.C. Internal Revenue Code
IRM Internal Revenue Manual
IRS Internal Revenue Service
JAMES Joint Audit Management Information System
KEV Known Exploited Vulnerabilities
LB&I Large Business and International Division
NOL Net Operating Loss
OI Office of Investigations
POA&M Plan of Action and Milestones
PPIA Partial Payment Installment Agreements
PRC People’s Republic of China
RRA 98 Restructuring and Reform Act of 1998
TAC Taxpayer Assistance Center
TAS Taxpayer Advocate Service
TDC Taxpayer Digital Communication
TDI Taxpayer Delinquency Investigations
April 1, 2023 – September 30, 2023│ 73
TIGTA Treasury Inspector General for Tax Administration
TIN Taxpayer Identification Number
TPI Total Positive Income
TXS Taxpayer Experience Strategy
TY Tax Year
U.S.C. United States Code
WEIIC Withholding Exchange and International Individual Compliance
74│ April 1, 2023 – September 30, 2023
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