TIGTA Semiannual Report to Congress — April 1 to September 30, 2024
Summary
The Treasury Inspector General for Tax Administration's Semiannual Report to Congress covers April 1, 2024 through September 30, 2024, the year of TIGTA's 25th anniversary. Acting Inspector General Heather M. Hill reports that in the period the Office of Audit issued 50 reports, the Office of Inspections and Evaluations issued 10 and the Office of Investigations completed 1,032 investigations, with monetary benefits totaling more than $6.1 billion. TIGTA issued 16 reports on the IRS's use of Inflation Reduction Act funds and reviewed the Employee Retention Credit, on which the IRS placed a moratorium on processing new claims on Sept. 14, 2023. Cases include David Dodge of New Hampshire, sentenced to 34 months for CARES Act fraud after obtaining $219,323 of the approximately $2.5 million sought.
Summary drafted by a model from the document's text below and checked by script against that text before publication. It is a navigation aid, not a reading of what the document proves. Where AI is used
Full text
TREASURY INSPECTOR GENERAL FOR TAX ADMINISTRATION
NTY-FI
TWE FT
O UR H
NIVER SA RY
Semiannual Report to Congress
E BRAT ING
AN
APRIL 1, 2024 — SEPTEMBER 30, 2024
L
CE
NTY-FI
TWE FT
UR H
RAT ING Treasury Inspector General for
LEB NIVER SA RY
AN
O
CE
Tax Administration (TIGTA)
Our Vision
Maintain a highly skilled, proactive, and diverse Inspector General
organization dedicated to working in a collaborative environment with
key stakeholders to foster and promote fair tax administration.
Our Mission
Provide quality professional audit, investigative, and inspection and
evaluation services that promote integrity, economy, and efficiency in
the administration of the nation’s tax system.
Our Core Values
Integrity – Maintain the highest professional standards of integrity,
personal responsibility, independence, objectivity, and operational
excellence in pursuit of TIGTA’s mission.
Organizational Innovation – Model innovative practices in
organizational structure, operational programs and processes, audit,
investigative, and inspection and evaluation methodologies, and the
application of advanced information technology.
Communication – Achieve effective organizational approaches and
solutions by encouraging open, honest, and respectful communication
among TIGTA’s executives, employees, offices, and functions, as well as
between TIGTA and its external stakeholders.
Value Employees – Respect the dignity, contributions, and work-life
balance of our employees, and recognize diversity as fundamental to
the strength of our organization.
Commitment to Collaboration – Establish and maintain collaborative
and professional relationships with other government and
non-government stakeholders.
Acting Inspector General’s Message to Congress
January 2024 marked the 25th anniversary of the Treasury Inspector
General for Tax Administration (TIGTA). As one of three Inspectors
General serving the U.S. Department of the Treasury, we are
responsible for providing oversight of the Internal Revenue Service
(IRS) and protecting the integrity of the nation’s tax system. Congress
established TIGTA as part of the sweeping reforms enacted in the IRS
Restructuring and Reform Act of 1998 (RRA 98). The RRA 98
transferred all functions of the former IRS Inspection Service to TIGTA.1
Our accomplishments over the past 25 years are a testament to the
positive changes resulting from the RRA 98 and subsequent revisions
to the Internal Revenue Code. Partnering with the IRS and providing
effective oversight has helped the agency understand and overcome its management
challenges while delivering significant return on investment to the nation’s taxpayers.
Highlights from our work over the past 25 years include:
• An average annual return of $102 for each dollar invested in TIGTA.2
• Issuing 3,280 reports with monetary benefits totaling more than $382.7 billion.
• Referring 31,798 cases of IRS employee misconduct for action, and 5,368 cases for
criminal prosecution.
In this Semiannual Report to Congress, I am also pleased to summarize our accomplishments
from April 1, 2024, through Sept. 30, 2024. We continue our regular IRS oversight roles and
responsibilities, in addition to monitoring the IRS’s use of supplemental Inflation Reduction
Act (IRA) funds. For Fiscal Year (FY) 2024, we identified “Managing IRA Transformation
Efforts” as 1 of 9 IRS management challenges. During this reporting period, we issued 16
IRA-related reports to assist the IRS and keep stakeholders informed.
Our quarterly snapshot reports, for example, share cumulative and quarterly assessments
about the IRS and its use of IRA funding. Visit our IRA dashboard on TIGTA.gov to obtain
regular updates on the IRS’s progress using supplemental IRA funding. We also issued an
IRA-related report examining the IRS’s Lifting Up Communities initiative. The initiative was
developed to rebuild underserved communities by creating jobs for people living in these
communities. Other IRA-related reports examined IRS efforts to comply with a Treasury
Directive not to increase the audit rate for taxpayers with incomes below $400,000, and two
reports reviewed the IRS’s Direct File Pilot program.
Additional highlights from our Office of Audit include reporting on noncompliant biofuel tax
credit claims, the need for the IRS to improve virtual tax compliance enforcement surrounding
the trillion-dollar virtual currency industry, and ways the IRS can address questionable claims
1 Pub. L. No. 105-206, 112 Stat. 685.
2 Dollar amount does not include supplemental funding.
April 1, 2024 – September 30, 2024 │3
associated with the Employee Retention Credit. We also assessed the IRS’s handling of
taxpayers who took early retirement distributions but did not pay additional tax, claim an
exception, or report the income.
Our Office of Inspections and Evaluations provides expedited oversight that quickly assesses
emerging issues impacting IRS operations. In one of our evaluations that assessed the IRS’s
Taxpayer Advocate Service, we called all 76 local Taxpayer Advocate Service telephone lines
in the United States and Puerto Rico using phone numbers listed on IRS websites. We found
telephone lines that were not in service, voicemail boxes that were full, and inconsistent
recorded messaging and callback time frames.
Cases highlighted from our Office of Investigations include an IRS employee indicted for filing
a false tax return, an IRS contract employee sentenced to 17 months imprisonment for
threatening to bomb an IRS Lockbox facility, 2 People’s Republic of China citizens pleading
guilty in an IRS bribery scheme, and a postal worker indicted in the theft of more than
$4 million in Treasury checks.
Highlights This Reporting Period
50 1,032
Audits Investigations
10 $6.1 Billion
Inspections and Evaluations in Monetary Benefits
For this reporting period, our Office of Audit issued 50 reports; Office of Inspections and
Evaluations issued 10 reports; and Office of Investigations completed 1,032 investigations.
TIGTA’s combined audit and investigative efforts during this reporting period resulted in the
recovery, protection, and identification of monetary benefits totaling more than $6.1 billion.
As we celebrate our 25th anniversary, we look forward to continuing our work providing quality
audit, investigative, and inspection and evaluation services to help the IRS achieve its goals.
We also remain committed to working with Congress, the Administration, and all our
stakeholders to improve federal tax administration.
Sincerely,
Heather M. Hill
Acting Inspector General
4 │ April 1, 2024 – September 30, 2024
Table of Contents
TIGTA’s Profile ........................................................................................................................................ 6
Statutory Mandate ....................................................................................................................... 6
Organizational Structure ............................................................................................................. 7
Authorities .................................................................................................................................... 7
Inflation Reduction Act Oversight Activities .......................................................................................... 8
Promote the Economy, Efficiency, and Effectiveness of Tax Administration ..................................... 16
Assess Emerging Issues Impacting America’s Tax System ................................................................. 22
Protect the Integrity of Tax Administration ........................................................................................... 24
Investigations Statistical Reports ......................................................................................................... 32
Reports With Unimplemented Corrective Actions ................................................................................ 37
Appendices
Appendix I – Other Required Reporting ................................................................................................ 47
Appendix II – TIGTA’s Statutory Reviews .............................................................................................. 48
Appendix III – Audit and Evaluation Reports Issued ............................................................................ 54
Appendix IV – Inspector General Peer Review Activity ........................................................................ 58
Appendix V – Data Tables Provided by the Internal Revenue Service................................................ 59
Internal Revenue Service Memorandum ................................................................................... 59
Report of Employee Misconduct by Disposition Groups ........................................................... 60
Report of Employee Misconduct National Summary................................................................. 61
Summary of Substantiated I.R.C. Section 1203 Inquiries Recorded in ALERTS ..................... 62
Appendix VI – Section 1203 Standards ............................................................................................... 63
Glossary .................................................................................................................................................. 64
April 1, 2024 – September 30, 2024│ 5
TIGTA’s Profile
TIGTA provides audit, investigative, and inspection and evaluation services that promote
economy, efficiency, and integrity in the administration of the Internal Revenue laws.
We provide independent oversight of the Internal Revenue Service (IRS), the IRS Oversight
Board, and the IRS Office of Chief Counsel. We are placed organizationally within the
Department of the Treasury (Treasury Department or Treasury). While TIGTA reports to the
Treasury Secretary and to Congress, we function independently from all other offices and
bureaus within the Treasury Department.
Statutory Mandate
Prevent and detect waste, fraud, and abuse in IRS programs and operations.
Protect against IRS employee misconduct 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.
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 the IRS’s administration of the federal tax system.
We protect the public’s confidence in the tax system by identifying and recommending
strategies for addressing the IRS’s management challenges and by implementing Treasury
Department priorities.
Our organizational structure (see following page) consists 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.
6│ April 1, 2024 – September 30, 2024
Organizational Structure
Authorities
TIGTA has all authorities granted under the Inspector General Act of 1978 (Inspector
General Act). 3 In addition to standard authorities granted to Inspectors General, TIGTA is
authorized to access tax returns and return information in the performance of our tax
administration responsibilities. We also report potential criminal violations directly to the
U.S. Department of Justice when we deem 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 statutory
authority to carry firearms, execute search and arrest warrants, serve subpoenas and
summonses, and make arrests pursuant to Internal Revenue Code (I.R.C.) § 7608(b)(2). 4
3 5 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.).
April 1, 2024 – September 30, 2024│ 7
Inflation Reduction Act Oversight Activities
Through the Inflation Reduction Act of 2022 (IRA), the IRS received approximately
$80 billion in supplemental funding to improve the administration of our nation’s tax
system and services to taxpayers. 5 By the end of March 2024, Congress had reduced
the IRS’s funding from the IRA to $57.8 billion. 6 TIGTA also received supplemental funding
from the IRA. The $403 million in funding that we received will help us provide oversight of
the IRS and support our operations.
The IRA provided the IRS with funding to transform all aspects of its operations over the next
decade. For Fiscal Year (FY) 2024, we identified “Managing IRA Transformation Efforts” as
1 of 9 IRS management challenges. Following are highlights from our IRA-related reviews
this reporting period. We plan to share ongoing quarterly and cumulative reporting on the
IRS’s use of IRA funding to implement its Strategic Operating Plan (SOP). 7 Visit TIGTA.gov for
additional information on our IRA oversight activities.
Quarterly Snapshot: The IRS’s Inflation Reduction Act Spending Through June 30, 2024
(Report Number 2024-IE-R020)
Figure 1: Cumulative IRA Expenditures by Funding Activity Through June 30, 2024 8
Source: TIGTA-created graphic based on information provided by the Office of the
Chief Financial Officer.
5 Pub. L. No. 117-169, 136 Stat. 1818.
6 Further Consolidated Appropriations Act, 2024, Pub. L. No. 118-47, 138 Stat. 460 (rescinding $20.2 billion); Fiscal
Responsibility Act of 2023, Pub. L. No. 118-5, 137 Stat. 10 (rescinding $1.4 billion).
7 Publication 3744, Internal Revenue Service Inflation Reduction Act Strategic Operating Plan (Rev. 4-2023).
8 Percentages of IRA funds expended may not calculate correctly due to rounding. Additionally, the Enforcement allocation
amount is after the $21.6 billion in rescissions.
8│ April 1, 2024 – September 30, 2024
In this report, we presented our most recent cumulative and quarterly snapshot of how the
IRS has expended IRA funds. As of June 30, 2024, the IRS had expended approximately
$6.9 billion (11.9 percent) of its $57.8 billion in IRA funds (see Figure 1). Of the $6.9 billion,
approximately $1.2 billion occurred in the third quarter of FY 2024 (April through
June 2024).
In addition, the IRS expended approximately $11.6 million in FY 2023 for the direct e-file tax
return system. The IRS also indicated that $2 billion of the $6.9 billion in expended IRA
funds were used to supplement the IRS’s annual appropriation because the amount the IRS
received was insufficient to cover normal operating expenses.
The report provided information only. We made no recommendations.
Actions Need to Be Taken to Ensure the Success of the Lifting Communities Up Initiative
in Expanding Services and Assistance to Taxpayers in Underserved Populations
(Report Number 2024-IE-R012)
The Taxpayer First Act requires the IRS to develop a comprehensive taxpayer experience
strategy. 9 As part of the development of its strategy, the IRS identified several initiatives to
expand services and assistance to taxpayers in underserved populations. One initiative is
called Lifting Communities Up (LCU), which was developed to rebuild underserved
communities by creating jobs for people in these communities. In FY 2022, the IRS selected
the Mississippi Delta for its pilot LCU initiative.
Our evaluation of the LCU pilot initiative found that the IRS had not taken key steps to
ensure the continuation of the LCU initiative. As of December 2023, the IRS Commissioner
had not approved the Request for Organizational Change to formally establish the LCU
Program Office. In addition, the IRS had not finalized the LCU’s governing and operational
policies and procedures or developed key performance measurements to assess the
success of the initiative in the Mississippi Delta.
We made two recommendations that include establishing the LCU Program Office and
developing a strategy to conduct in-person recruiting activities at educational institutions
and job fairs as part of the Mississippi Delta hiring strategies. The IRS agreed with the
recommendations.
Opportunities Exist to Improve Taxpayer Service to Underserved, Underrepresented, and
Rural Communities (Report Number 2024-IE-R014)
In April 2023, the IRS issued its SOP, which outlined how the IRS plans to use its
supplemental IRA funding to better serve taxpayers, tax professionals, and the broader tax
system. The SOP notes that the IRS plans to make interactions easier and more convenient
for taxpayers.
9 Pub. L. No. 116-25, 133 Stat. 981 (2019).
April 1, 2024 – September 30, 2024│ 9
We found that the IRS has made improvements to increase the accessibility and availability
of customer service in underserved, underrepresented, and rural communities; however,
additional efforts are needed to improve the geographic outreach efforts in these
communities. While the IRS uses various models to identify the underserved,
underrepresented, and rural population, there is no clear definition for these populations.
When we asked the IRS for the criteria used to identify these populations, the response we
received varied by business unit. Table 1 shows the inconsistency in how various IRS
business units define an underserved taxpayer.
Table 1: Definition of Underserved Taxpayers From Various IRS Business Units
Source: Response from IRS business units.
Without a clear definition of what constitutes these populations, the IRS is unable to
measure its progress in increasing accessibility and availability to these segments of
taxpayers. This includes the IRS’s inability to identify additional locations where there are
segments of underserved taxpayers for which the IRS currently does not provide adequate
face-to-face customer service. Our evaluation also identified that there is no comprehensive
communication strategy to inform underserved taxpayers of the availability of these options.
We made five recommendations. The IRS agreed with all five recommendations.
The IRS Has Made Limited Progress Developing the Methodology to Comply With the
Treasury Directive to Not Increase the Audit Rate for Taxpayers With Incomes Below
$400,000 Due to Planning and Implementation Challenges (Report Number 2024-308-043)
The $24 billion of IRA funds allocated to IRS enforcement activities is intended in part to
increase examinations of high-income taxpayers. In August 2022, the Secretary of the
Treasury issued a Treasury Directive to the IRS Commissioner directing the IRS not to use
10│ April 1, 2024 – September 30, 2024
any additional resources to increase audits on small business or households earning below
$400,000 per year. In the directive, the Treasury Secretary stated that “enforcement
resources will focus on high-end noncompliance.”
Although the IRS and Treasury chose Tax Year (TY) 2018 for the base year, as of May 2024,
the IRS had yet to calculate the audit coverage for TY 2018 because it had not finalized its
methodology for the audit coverage calculation. While the IRS routinely calculates audit
coverage rates, the IRS and Treasury have been exploring a range of options to develop a
different methodology for purposes of determining compliance with the directive.
Table 2 shows that examinations of taxpayers reporting total positive income (TPI) under
$400,000 accounted for 95 percent of total examinations in FYs 2019 to 2021 and
93 percent and 91 percent in FYs 2022 and 2023, respectively. Increasing the audit
coverage rate for taxpayers reporting TPI greater than $400,000 will require a significant
shift in the IRS’s examination resources.
Table 2: Examinations of Taxpayers Reporting TPI Under and Over $400,000
Examinations Started FY 2019 FY 2020 FY 2021 FY 2022 FY 2023
Total Number of Records 574,951 466,921 519,167 446,100 400,446
Percentage of Examinations of TPI
95% 95% 95% 93% 91%
Less Than or Equal to $400,000
Percentage of Examinations of TPI
5% 5% 5% 7% 9%
Greater Than $400,000
Source: TIGTA analysis of Audit Information Management System and Return Transaction
File data.
We made four recommendations. The IRS agreed with two recommendations, disagreed
with one, and partially agreed with one.
Interim Results of the 2024 Filing Season (Report Number 2024-408-024)
Our report presented interim results evaluating whether the IRS was timely and
accurately processing TY 2023 individual paper and electronically filed (e-filed) tax
returns. The results were presented as of several dates between Jan. 29, 2024, and
March 30, 2024, depending on when the information was available.
While e-file volumes decreased by 1.5 percent, the number of returns filed through the IRS
Free File Program increased by 14 percent when compared to the same period during the
2023 Filing Season. The IRS also continued to increase the number of fraudulent tax returns
detected and stopped from entering the tax processing system, i.e., rejecting e-filed tax
returns and preventing paper tax returns from posting. As of Feb. 24, 2024, the IRS
reported that it identified 32,616 tax returns with approximately $272.7 million claimed in
fraudulent refunds and prevented the issuance of $262.7 million (96.3 percent) of those
refunds (see Table 3).
April 1, 2024 – September 30, 2024│ 11
Table 3: Fraudulent Tax Returns and Refunds Identified and
Stopped in Processing Years 2022, 2023, and 2024
Processing Fraudulent Fraudulent Amount of Fraudulent Amount of Fraudulent
Year Refund Refund Refunds Identified Refunds Stopped
Returns Returns
Identified Stopped
2022 76,814 74,711 $817,400,771 $807,903,066
2023 31,079 30,730 $310,724,203 $303,718,702
2024 32,616 30,867 $272,738,111 $262,682,364
Source: IRS fraudulent tax return statistics for Processing Years 2022 (as of Feb. 26, 2022);
2023 (as of Feb. 25, 2023); and 2024 (as of Feb. 24, 2024).
We reported on several IRS customer service initiatives, such as the increase in visits to
IRS.gov, and the launch of a public-facing dashboard that lists current processing statuses
for general correspondence and key tax forms. The IRS also planned to assist about
2 million taxpayers at its Taxpayer Assistance Centers in FY 2024, which was a 22 percent
increase from the number of taxpayers the IRS assisted during FY 2023.
This report provided interim information only. No recommendations were made.
Inflation Reduction Act: Implementation of the Elective Payment and Transfer
of Credit Provision (Report Number 2024--408-066)
The IRA created new Internal Revenue Code sections allowing applicable entities to treat the
unused portion of certain nonrefundable clean energy tax credits as an elective payment
that generates a refund and allows eligible taxpayers to elect to transfer, i.e., sell, certain
clean energy tax credit(s) to an unrelated third-party buyer in exchange for cash. IRS
regulations require taxpayers that intend to make an election for an elective payment or a
transfer of credit to register each property or facility used to earn the credit after the
property or facility is placed into service.
The IRS developed the Pre-Filing Registration tool within the Energy Credits Online portal for
taxpayers to register their properties and facilities. As of May 21, 2024, we identified more
than 1,700 entities entered information into the Pre-Filing Registration tool, accounting for
about 62,500 properties or facilities. During that same time frame, the IRS reported that
130 tax returns had been filed reporting elective payments and/or transfers of credits
totaling almost $381 million.
Our review found that the IRS established access controls for the portal and a process to
evaluate the properties being registered. The portal is accessible through IRS.gov where an
individual user authenticates themselves and creates an account. The IRS also developed a
12│ April 1, 2024 – September 30, 2024
new process to evaluate the entities and properties prior to issuing registration numbers to
help prevent duplication, improper payments, or excessive payments.
We made one recommendation. The IRS agreed with the recommendation.
Communication Breakdowns, Hiring Volume Surges, and Aging System Integration
Challenges Delayed Some IRS Hiring Efforts (Report Number 2024-108-069)
Over the last decade, the IRS has faced a decline in staffing levels, which has affected its
ability to fulfill its mission. IRA funds have allowed the IRS to expand its hiring efforts. In
addition, the IRS was granted multiple Direct Hire Authorities (DHA) to expedite hiring and fill
job vacancies when a critical hiring need or a severe shortage of candidates exists.
From Oct. 1, 2021, to Sept. 30, 2023, the IRS processed nearly 53,000 new hires.
In FY 2022 there were almost 22,000 new hires and approximately 31,000 new hires in
FY 2023. Although the IRS used multiple DHAs to expedite its hiring process to fill vacant
positions, almost 19,000 of FYs 2022 and 2023 new hires exceeded the Office of Personnel
Management’s (OPM) target of 80 calendar days to hire.
We reviewed a statistically valid stratified random sample of 106 of the new hires who
exceeded OPM’s target of 80 calendar days to hire. We found that delays in the hiring
process were the result of workload constraints and miscommunication, security checks
exceeding their targeted completion time, and limitations in the IRS’s hiring management
system.
We made four recommendations to the IRS. Our recommendations included designing a
corrective action plan focused on improving training, communication, and coordination
throughout the hiring process; developing comprehensive, up-to-date reference materials;
and taking steps to improve information accuracy and reduce data input errors in the IRS’s
hiring management system. The IRS agreed with all of our recommendations.
Progress of Information Technology Modernization Efforts (Report Number 2024-2S8-055)
Modernizing the IRS’s information technology and business systems is essential for helping
the IRS maintain the integrity of the nation’s tax system, collect trillions of dollars, and keep
up with economic and population growth.
The SOP outlines how the IRS will deploy IRA funding to better serve taxpayers, tax
professionals, and the broader tax ecosystem. The SOP is structured to achieve 5 core
transformation objectives that will be accomplished through the completion of 42 initiatives
and 39 projects.
We reviewed the progress of the IRS’s modernization efforts and the reported FY 2023
milestone statuses for Objective 4 of the core objectives. Our review covered the period of
November 2023 through July 2024, and we issued a memorandum to document actions the
IRS has taken.
April 1, 2024 – September 30, 2024│ 13
We noted that the IRS is making progress in its modernization efforts while adhering to its
strategic goals. Specifically, the Information Technology organization is making significant
technical advancements in the areas of artificial intelligence, automation, cloud capabilities,
data access, data quality, and data standards. We also noted the IRS is undergoing multiple
new processes that, once fully operational, will pave the way for a new technology era across
the enterprise.
The Direct File Pilot Deployed Successfully; However, Security and Testing Improvements
Are Needed (Report Number 2024-200-050)
The IRA required the IRS to establish a task force to design and report to Congress on an
IRS-run free, direct electronic filing tax return system. The IRS launched the Direct File Pilot
program on Feb. 1, 2024, and implemented the pilot in phases throughout the 2024 Filing
Season. The pilot was implemented to a limited scope of taxpayers with certain types of
income, credits, deductions, and who reside in 1 of 12 participating states. The IRS
Transformation and Strategy Office, with support from the Office of Information Technology,
led the team to design and deploy the pilot.
The IRS issued the Authorization to Operate for the Direct File Pilot with eight moderate and
low risks identified during security control assessments. We found that during systems
development, the Direct File Pilot team did not appropriately complete two of its required
artifacts, e.g., the Configuration Management Plan and the About Page. Once the
Authorization to Operate was issued, the Direct File Pilot team completed its first required
monthly Federal Risk and Authorization Management Program Continuous Monitoring
Summary Report. However, we noted that the report was issued without the security
assessment for the cloud platform upon which the Direct File Pilot resides.
We also found that the Direct File Pilot team issued Memorandums of Understanding to
participating states without relevant security or technical details for managing the exchange
of taxpayer data. Initially, the team developed high-level requirements in their test plan and
test schedule; however, the repositories used for source code and issue tracking lacked
traceability and reporting capabilities. None of the tests in the issue tracker were able to be
traced back to the test plan. In addition, the Direct File Pilot contained sufficient
documentation on bug, also called defect, remediation for only 12 (46 percent) of the
26 testing issues reviewed.
We made six recommendations. The IRS agreed with all of our recommendations.
Inflation Reduction Act: Interim Results of the Direct File Pilot (Report Number 2024-408-031)
The IRA provided the IRS with $15 million to establish a task force to design an IRS-run,
free, direct electronic filing system and prepare a report for Congress by May 16, 2023.
This report provided interim information related to Phase A of the Direct File Pilot.
Our review of the eligibility checker and tax returns filed through Direct File during Phase A
identified opportunities for the IRS to update the eligibility checker to clarify eligibility
14│ April 1, 2024 – September 30, 2024
requirements and potentially reduce taxpayer confusion and burden. For example, we
identified inconsistent text between the Spanish and English translations for the Direct File
eligibility checker.
The IRS met three of seven firm criteria established for exiting Phase A of the pilot, but two
of the seven criteria were not met. For the remaining two criteria, TIGTA has been unable to
determine whether these criteria were met before exiting Phase A.
We made three recommendations to the IRS. The IRS agreed with two recommendations
and partially agreed with the third recommendation. Although management agreed with the
importance of quantitative metrics to assist in evaluating the Direct File pilot, management
did not establish numerical benchmarks as we recommended.
The Individual Tax Processing Engine Project Is Progressing, but Risks Remain
(Report Number 2024-208-052)
The Customer Account Data Engine 2 program is one of the most complex modernization
programs in the federal government and involves major changes to core IRS tax processing
systems. The program plans to reengineer the IRS’s Individual Master File from an old
programming language into a modern language and provide state-of-the-art individual
taxpayer account processing.
The IRS established the Individual Tax Processing Engine (ITPE) project to update two
programs that perform the core Individual Master File business functions of posting,
settlement, and analysis, and are the most complex individual tax processing programs.
For the ITPE project to be successful, the outputs of the project must match the outputs of
the legacy system it will replace. To ensure that the outputs match, the IRS used high-
volume functional testing. This testing combined functional and high-volume testing to
evaluate code quality and collect performance metrics.
We assessed whether the IRS effectively managed the testing and defect remediation
process for the ITPE project and whether a delay in implementing the project would affect
the schedule of any IRA projects or milestones. We found that the ITPE project met its
performance goal of processing the code within three hours for Filing Season 2023.
However, the IRS stopped reporting a risk to stakeholders about a defect that could affect
the ITPE project delivery.
We made two recommendations. The IRS agreed with both recommendations.
April 1, 2024 – September 30, 2024│ 15
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. We provide recommendations to improve IRS systems and operations and to
ensure the fair and equitable treatment of taxpayers. Our 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.
The following summaries highlight significant audits completed during this 6-month
reporting period.
Additional Actions Need to Be Taken to Identify and Address Noncompliant Biofuel Tax
Credit Claims (Report Number 2024-300-021)
The use of biodiesel instead of conventional diesel fuel is believed to reduce particulate
matter and hydrocarbon emissions. Since Congress enacted legislation creating biofuel tax
credits in Calendar Year 2004, the IRS has been susceptible to significant fraudulent
schemes that have resulted in the payment of erroneous refunds.
We found that the IRS is not using all available compliance tools to encourage more tax
compliance of biofuel tax claims. Of the 124 taxpayers we sampled, 42 claimed biofuel tax
credits totaling about $30.3 million. Our analysis found that the 42 taxpayers did not
provide an approved registration number or a Certificate of Biodiesel; therefore, these
claims would not be allowable.
Under current law, the IRS could only address these claims after the returns are filed and
examined, and the agency issues notices of deficiency to the taxpayers as appropriate.
The IRS does not have the legal authority to deny biofuel tax credits or otherwise enforce
registration requirements on taxpayers that are not eligible to receive the credits at the time
a tax return is filed.
16│ April 1, 2024 – September 30, 2024
We also found that IRS compliance efforts primarily focused on biofuel tax credit claims
made on Form 8849, Schedule 3, Certain Fuel Mixtures and the Alternative Fuel Credit; and
Form 720, Schedule C, Claims. We noted that more effective efforts could be undertaken to
evaluate claims made on Form 4136, Credit for Federal Tax Paid on Fuels.
We made four recommendations. The IRS agreed with three recommendations and partially
agreed with one.
The IRS Has Reduced Its Overall Space Footprint; However, a Significant Amount of
Unneeded Office Space Still Remains (Report Number 2024-100-027)
For FY 2024, the IRS indicated it would spend approximately $600 million on real estate
costs. This includes 516 office buildings totaling approximately 22.3 million square feet.
Since FY 2018, the IRS has reduced its overall space footprint by approximately 2 million
rentable square feet, from 24.3 million to 22.3 million, which represents a reduction of
approximately 8 percent (see Figure 2). 10
Figure 2: Changes in the IRS’s Real Estate Portfolio for FYs 2018 Through 2023
Fiscal Year
Source: The IRS Facilities Management and Security Services, Graphic
Database Interface system, Facilities Consolidated Data Plus Reports for
FYs 2018 through 2023. Numbers in this figure are rounded.
Although the IRS has made progress reducing its unneeded office space, additional efforts
to address long-term space planning are important to increasing efficient space allocation
and realizing associated cost savings. In FY 2023, more than one-half of IRS buildings had a
workstation occupancy rate of 50 percent or less. In addition, the IRS has not implemented
workstation sharing/hoteling for approximately 61 percent of its employees on frequent
10 This figure does not include space that is designated as joint space. The General Services Administration defines joint
space as any space used by all tenants in a building such as food service, fitness, and childcare centers.
April 1, 2024 – September 30, 2024│ 17
telework. We found that the IRS has enhanced its internal controls over occupancy
information accuracy since our last review, but documentation could be improved.
We made three recommendations. The IRS agreed with the recommendations and said the
agency has developed corrective actions to address each one.
Virtual Currency Tax Compliance Enforcement Can Be Improved
(Report Number 2024-300-030)
In the last 15 years, virtual currency has grown into a trillion-dollar industry. The anonymity
of virtual currency complicates the IRS’s enforcement efforts. The IRS does not always have
a clear window into taxpayers’ transactions, and trading platforms do not generally provide
information reporting documents to the agency.
Without information reporting documents, the IRS
has been unable to use some of its enforcement tools
to match reported virtual currency-related income to
taxpayers’ tax returns to ensure that taxpayers are
accurately reporting income generated from virtual
currencies. When there is income information
reporting from third parties, tax compliance exceeds
90 percent; however, when there is no third-party
income information tax compliance is 55 percent. 11
We found that IRS Criminal Investigation has taken advantage of analytics tools to address
virtual currency noncompliance. During FYs 2018 to 2023, there were 390 Criminal
Investigation cases involving virtual currency or digital assets. Of those cases, 224 were
recommended for prosecution.
The IRS’s civil examination enforcement efforts focused on digital assets are mostly indirect
and negligible. The IRS established “Operation Hidden Treasure,” describing it as a
partnership between the criminal and civil functions to identify taxpayers who omit digital
assets from their tax returns. However, its primary purpose has been limited to the
acquisition of tools and training, rather than pursuing taxpayers.
We made three recommendations. The IRS agreed with all three recommendations.
Actions Have Been Taken to Improve Security Controls for the Planned Expanded Use of
Login.gov; However, Additional Security Improvements Are Needed
(Report Number 2024-200-032)
In December 2022, the IRS deployed Login.gov as one of its credential service
providers (CSP) to offer authentication services. The CSPs are independent and trusted
11 IRS, Publication 1415, Federal Tax Compliance Research: Tax Gap Estimates for Tax Years 2014-2016, p. 3
(Rev. 10-2022).
18│ April 1, 2024 – September 30, 2024
third parties that issue user authenticators and provide electronic credentials for accessing
an information system or application. The IRS leverages Login.gov as a CSP for its Secure
Access Digital Identity system.
We audited the effectiveness and security of the IRS’s Login.gov deployment. We found that
the IRS timely completed the initial analysis of Login.gov’s Federal Risk and Authorization
Management Program (FedRAMP) security package, which includes the Plans of Action and
Milestones, the Digital Identity Acceptance Statement, and the Information System
Contingency Plan. However, we noted that additional security controls need improvement.
We also found that continuous monitoring security reviews need improvement. Continuous
monitoring security reviews were not completed timely and/or the results were not sent
consistently to the Authorizing Official. This resulted in the IRS not knowing that the
Personally Identifiable Information for 57,417 IRS user authentications may have been sent
to unauthorized locations outside of the United States.
We made six recommendations. The IRS agreed with all six recommendations.
The Information Collected by Online Providers and Shared With Third Parties Is Not
Clearly Disclosed to Taxpayers and Is Unknown to the IRS (Report Number 2024-400-062)
The IRS partners with tax professionals and other entities that assist taxpayers in meeting
their tax obligations. Before accepting these individuals, the IRS conducts suitability checks,
e.g., background and tax compliance checks, to ensure that reputable individuals are
participating in the Authorized e-file Provider (i.e., online providers), Acceptance Agent, and
Enrolled Agent Programs. Allowing unsuitable individuals into these programs increases the
risk to taxpayers.
Our review of four tax software companies found that providers requested taxpayer consent
for the disclosure and use of tax return information, used the required format, and met
requirements for electronic signatures. However, consent statements did not clearly
identify the intended purpose of the disclosure and specific recipient(s) of the tax return
information.
We also found that the guidance for obtaining taxpayer consent to use or disclose taxpayer
information did not specifically address the use of pixels, i.e., third-party code used to track
information on a website. Additionally, we noted that the IRS did not have awareness of the
full scope of information that an online provider routinely collects, beyond what
is filed with the IRS or shared with third parties.
We made three recommendations. The IRS agreed with all three recommendations and
plans to discuss the revenue procedure with Treasury; identify the most appropriate
communication mechanism to raise awareness about data-sharing practices; and explore
and identify potential solutions to ensure that Authorized e-file Providers comply with
taxpayer consent statement requirements.
April 1, 2024 – September 30, 2024│ 19
Former Contractor Employees Retained Access to IRS Facilities, Systems,
and Equipment (Report Number 2024-100-063)
The IRS uses HRConnect, the Treasury Department’s human resource and personnel
system, to manage and track onboarding and separation data associated with contractor
employees. Our review of 18,454 contractor employees listed as active on HRConnect as of
April 2023 identified 1,821 (10 percent) former contractor employees who should have
been listed as separated because they were no longer assigned to an ongoing contract.
As of October 2023, 63 of the 1,821 former contractor employees had not returned their
assigned identification media allowing access to an IRS facility, of which 13 had active IRS
network access. In addition, 17 of the 1,821 former contractor employees had not returned
their assigned IRS computer hardware.
When the IRS does not properly separate contractor employees and retrieve the issued
security items and identification media, it increases the risk of unauthorized entry to IRS
facilities and workspaces, potentially endangering IRS employees. By not recovering security
items and computers, the IRS increases the risk of former contractor employees improperly
accessing its systems and sensitive taxpayer information. Unrecovered computers also
represent a financial loss to the IRS.
We also noted that the IRS did not always document contractor separation actions as
required. From Oct. 1, 2021, through Jan. 31, 2023, the IRS had 10,628 contractor
employees who separated from the agency. In 12 of 20 contractor employee separations
reviewed, the Contracting Officer’s Representative either did not complete, or partially
documented completing, the required contractor separation actions.
We made two recommendations. The IRS agreed with both of recommendations.
Management Took Actions to Address Erroneous Employee Retention Credit Claims;
However, Some Questionable Claims Still Need to Be Addressed
(Report Number 2024-400-068)
This report was a continuation of our review of the Employee Retention Credit (ERC). The
ERC was intended to provide businesses with relief from the adverse financial effects of the
pandemic. On Sept. 14, 2023, the IRS placed a moratorium on processing new ERC claims
due to a surge in the volume of suspicious claims from unscrupulous actors.
We found that the IRS increased awareness about ERC eligibility requirements by issuing
numerous press releases and electronic news articles to tax professionals and other
subscribers. The IRS also updated identity theft filters and reported that it identified more
than 155,000 tax returns claiming potentially erroneous ERC, preventing $487 million in
refunds from being issued during Processing Years 2021 through 2023. However, we noted
that the IRS does not apply updated filters to tax returns that were previously screened
using old criteria. We identified 997 returns reporting $19.6 million in potentially erroneous
ERC that the IRS did not identify.
20│ April 1, 2024 – September 30, 2024
We also found that through June 29, 2023, the IRS made decisions to double the threshold
and change the referral criteria to include only returns that met specific return scenarios.
The IRS said these changes were to deal with the influx of ERC claims and to expedite the
processing. However, the IRS’s decisions resulted in 184,923 returns claiming $41.8 billion
in ERC from being considered for possible prerefund examination.
After the moratorium was announced, the IRS implemented several initiatives that assessed
or prevented erroneous ERC amounts. These initiatives prevented $1.6 billion in ERC and
allowed the IRS to assess $573 million in ERC as of April 13, 2024. However, we identified
an additional 923 entities that claimed ERC of $105 million that should have received a
disallowance letter but were not initially identified by the IRS.
We made four recommendations. The IRS agreed with three recommendations and partially
agreed with one.
Millions of Taxpayers Took Early Retirement Distributions but Some Did Not Pay the
Additional Tax, Claim an Exception, or Report the Income (Report Number 2024-100-065)
Many individuals use retirement plans to save for their retirement. However, the law
imposes a 10 percent additional tax on certain early retirement distributions. We assessed
whether the IRS is effectively ensuring that taxpayers comply with Form 5329, Additional
Taxes on Qualified Plans (Including IRAs) and Other Tax-Favored Accounts, filing and
payment requirements when they receive an early distribution from a retirement account.
Our analysis of TY 2021 tax return information identified approximately 2.8 million taxpayers
who received early distributions of approximately $12.9 billion but did not pay the additional
10 percent tax and did not file Forms 5329. These taxpayers could be subject to
approximately $1.29 billion in additional taxes and/or approximately $322 million in
Form 5329 failure to file penalties.
We found that taxpayers for whom third parties reported early distributions should have
reported and paid the additional 10 percent tax, filed a Form 5329 claiming an exception, or
both if only a portion of the early distribution was excepted. Our analysis applied the
Form 5329 failure to file penalty on the 10 percent additional tax owed because the law
applies the penalty to the amount owed on the return due date. However, IRS management
was uncertain if it was appropriate to apply the penalty to this amount because taxpayers
who belatedly file Forms 5329 are claiming exceptions to the tax and the subsequent
amount owed is potentially zero, rendering the penalty amount to zero.
We also found that approximately 2.3 million of the 2.8 million taxpayers did not properly
report $11.4 billion in early distributions as taxable income, including 880 taxpayers with
distribution amounts over $200,000.
TIGTA made five recommendations. The IRS agreed or partially agreed with three
recommendations and disagreed with two recommendations.
April 1, 2024 – September 30, 2024│ 21
Assess Emerging Issues Impacting
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.
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.
The following summaries highlight significant evaluations completed during this 6-month
reporting period.
The Internal Revenue Service Is Not Fully Complying With the 90- and 120-Day
Requirements of the “No TikTok on Government Devices” Implementation Guidance
(Report Number 2024-IE-R016)
The Consolidated Appropriations Act, 2023, enacted the No TikTok on Government Devices
Act in December 2022.12 In this report, we assessed the IRS’s actions to timely address the
90- and 120-day requirements in the Office of Management and Budget (OMB) M-23-13,
“No TikTok on Government Devices” Implementation Guidance.
We found that the IRS Office of the Chief Procurement Officer (OCPO) was not in compliance
with OMB and Federal Acquisition Regulation (FAR) guidance because contracting officers
did not always include the required clause in solicitations, contracts, and contract
modifications to extend the period of performance. Specifically, our review of contract
actions signed between June 2 and Aug. 16, 2023, found that contracting officers omitted
the FAR clause in 68 of 163 contracts or solicitations and in 50 of 53 contract
modifications. The FAR clause states that contractors are prohibited from using TikTok or a
12 Pub. L. No. 117-328, 136 Stat. 4459 (2022).
22│ April 1, 2024 – September 30, 2024
subsidiary of TikTok’s parent company during the performance of a contract. In addition, we
identified social media and recruiting contracts, which were not identified by the OCPO, that
could potentially involve the use of TikTok.
We made five recommendations. The IRS agreed with four of the five recommendations and
disagreed with one.
Improvements Are Needed to Ensure That Local Taxpayer Advocate Service Telephone
Lines Are Properly Monitored (Report Number 2024-IE-R018)
The Taxpayer Advocate Service (TAS) is an independent IRS organization with a mission to
help taxpayers resolve problems and recommend changes to IRS processes and procedures.
Our report evaluated the readiness of local TAS telephone lines and the consistency of
information posted online.
We found that local TAS telephone lines were not consistent in providing taxpayers the
ability to speak with a TAS representative. We called all 76 local TAS telephone lines in the
United States, including offices in the District of Columbia and Puerto Rico, using telephone
numbers listed on the TAS and
IRS websites. The calls found Figure 7: Caller Experience for Local TAS Telephone Lines
some telephone lines were not
in service, voicemail boxes were
full, and there were inconsistent
recorded scripted messaging
and callback time frames.
Only two telephone lines were
answered by a TAS representative.
Voicemail prompts indicated that
callbacks would be received within Source: TIGTA evaluator experience when calling local TAS
telephone lines.
time frames ranging from one
business day to four weeks.
In addition, we found several discrepancies between what was listed on the TAS website and
the IRS website when comparing contact information for telephone numbers, fax lines, and
local addresses. We also identified voicemail messaging that had significant differences in
the information being communicated.
During our evaluation, we issued an email alert to TAS management about our findings.
TAS management partially agreed with our recommendations and took corrective actions
to make changes to voicemail messages, made updates to the IRS and TAS websites, and
provided more consistent information to taxpayers. Due to the actions taken, we did not
make additional recommendations.
April 1, 2024 – September 30, 2024│ 23
Protect the Integrity of Tax Administration
TIGTA is statutorily mandated to protect the integrity of federal tax administration.
We accomplish 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 carry out its role as the nation’s revenue
collector fairly, efficiently, and safely. 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 highlight example cases from the current
reporting period. 13 For additional details about the highlighted cases, visit the TIGTA
Investigative Activities web page or click on the hyperlink in the case titles.
13 Facts in the summarized case narratives come from court documents of the jurisdictions named.
24│ April 1, 2024 – September 30, 2024
Performance Area: Employee Integrity
For our 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 41%
impede the IRS’s ability to effectively enforce tax laws.
Employee misconduct can take many forms, such as: the
misuse of IRS resources or authority; theft; fraud; extortion;
taxpayer abuse; unauthorized access to, and disclosure of,
tax returns and return information; and identity theft. of OI’s work was employee
integrity investigations.
During this reporting period, employee integrity investigations
accounted for 41 percent of OI’s work. OI conducted 530 employee misconduct
investigations that were referred to the IRS for action. The IRS took action, up to and
including termination, on 478 investigations and closed 52 without action. 14
As part of our employee integrity focus, we also conduct proactive investigative initiatives to
detect misconduct in the administration of IRS programs. During this reporting period, we
initiated five proactive projects to detect systemic weaknesses or potential IRS program
vulnerabilities. Our most successful integrity project involves the detection of IRS employees
who abuse their access to taxpayer information to commit identity theft and other crimes.
The following cases represent OI’s efforts to address employee misconduct during this
reporting period.
Addressing Employee Misconduct
IRS Employee Indicted for Filing False Tax Returns
On April 16, 2024, in the District of Massachusetts, IRS employee Amy Ndeye Thioub was
indicted on three counts of filing a false tax return and three counts of filing a false tax
return by an employee of the United States.
According to the charging documents, Thioub has been employed by the IRS since 2006.
Thioub has extensive and specialized knowledge and training in accounting techniques,
practices, and investigative audit techniques. She is also responsible for examining and
resolving various tax issues of individuals and business organizations that may include
extensive national and/or international subsidiaries.
The indictment alleges Thioub fraudulently claimed thousands of dollars in false business
expenses for at least TYs 2017, 2018, and 2019. Specifically, Thioub is alleged to
14 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.
April 1, 2024 – September 30, 2024│ 25
have filed a Schedule C claiming a net loss from a business. The net loss was carried over to
her IRS Form 1040s and used to reduce Thioub’s adjusted gross income and ultimate tax
liability. The Schedule C forms reported net business losses of $42,805 in 2017; $20,324
in 2018; and $27,063 in 2019.
IRS Employee Sentenced for Mail Fraud Conspiracy
On June 27, 2024, Contessa M. Qualls was sentenced to 3 years’ probation, 80 hours of
community service, and ordered to pay a $100 court assessment. Qualls pleaded guilty to
mail fraud conspiracy for her role in mailing drugs to the Toledo Correctional Institute (TCI).
In October 2021, Qualls, an IRS employee in Covington, Kentucky, obtained controlled
substances from the internet and other sources for the purpose of mailing them to an
inmate of TCI. On at least two occasions, Qualls used IRS mailings, sent from the IRS office
in Covington, Kentucky, to mail documents soaked in a controlled substance known as “K2”
or “spice,” to an inmate at TCI. Qualls mailed documents for the purpose of sale and
distribution in TCI by the inmate. Using the IRS mailings, Qualls intended to deceive TCI
officials by conveying the false impression that the mailings constituted official documents
from a U.S. government agency, thus introducing the contraband into TCI without additional
scrutiny or interception. Qualls intended the controlled substances to be sold and
distributed in TCI.
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 while performing their official
duties. We also pursue, investigate, and mitigate emerging threats to
the IRS’s ability to conduct federal tax administration in cyberspace.
Contact with the IRS can be stressful and emotional for taxpayers. While the majority of
taxpayer contacts are routine, some may become confrontational and even violent. TIGTA’s
special agents are statutorily mandated to provide physical security, known as “armed
escorts,” to IRS employees who have face-to-face contact with taxpayers who may pose a
danger to the employee, and to ensure that IRS employees have a secure environment in
which to perform their critical tax administration functions. During this 6-month reporting
period, OI provided 12 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.
26│ April 1, 2024 – September 30, 2024
Investigative information sharing between OI and the IRS’s
Office of Employee Protection to identify “potentially
dangerous” taxpayers is one example of our commitment to
protecting IRS employees. Taxpayers who meet certain IRS
criteria receive a designation as potentially dangerous. Five 24%
years after this designation has been made, we conduct a
follow-up assessment of the taxpayer so that the IRS can
determine if the taxpayer still presents a potential danger to
IRS employees. of OI’s work was
investigations of
During this reporting period, employee and infrastructure
threats/assaults.
security investigations accounted for 24 percent of OI’s work.
The following case represents OI’s efforts to ensure the safety of IRS employees during the
reporting period.
Louisville Man Sentenced for Threatening to Bomb IRS Lockbox Facility
On April 4, 2024, in the Western District of Kentucky, Cameron Hyatt was sentenced to
17 months imprisonment, 3 years of supervised release, and ordered to pay $11,201 in
restitution. Hyatt pleaded guilty to one count of false information and hoaxes and three
counts of assaulting, resisting, or impeding three TIGTA special agents.
On April 13, 2023, Hyatt, a contract employee at an IRS Lockbox, a government facility for
processing federal tax returns and tax remittances, sent a text message to his contracting
agency that stated, “I am going home and killing myself, blowing my brains out.” The next
day a shift supervisor called Hyatt and advised him that he could not return to work until he
was cleared by human resources. Hyatt called the shift supervisor multiple times and cursed
at them. On April 17, 2023, a human resources representative advised Hyatt that his
employment was terminated. Hyatt told the human resources representative not to call him
again and stated he was going to kill himself. When told he was no longer permitted on any
client site, including the IRS Lockbox, Hyatt stated, “That’s okay because I’m going to bomb
your place…” When interviewed by a TIGTA special agent, Hyatt stated he sent the text
messages “because he wanted to...scare them for ruining my job, my livelihood.”
On April 20, 2023, Hyatt was arrested by TIGTA agents. During his arrest, Hyatt kicked and
spit at a TIGTA special agent, kicked a second TIGTA special agent, and kicked and
threatened to kill a third TIGTA special agent.
April 1, 2024 – September 30, 2024│ 27
Performance Area: External Attempts to Corrupt Tax Administration
We also investigate external attempts to corrupt or impede tax administration. Individuals
may attempt to corrupt or impede tax administration in many ways. They may impersonate
IRS employees or misuse IRS seals and symbols; use fraudulent IRS documentation to
perpetrate criminal activity; offer bribes to IRS
employees to influence their tax cases; commit fraud
in contracts the IRS awards to contractors; or commit
cybercrimes through the misuse of IRS portals.
In addition, we investigate corruption and criminal
activity involving the theft of U.S. Treasury checks,
which can include Social Security benefits, COVID-19
35%
stimulus checks, and tax refunds.
During this reporting period, investigations into
attempts to corrupt or impede tax administration of OI’s work was investigating
accounted for 35 percent of OI’s work. attempts to corrupt or impede
tax administration.
The following cases represent OI’s efforts to
address external attempts to corrupt or impede
tax administration during this reporting period.
Unregistered Agents’ Bribery Scheme
People’s Republic of China Agents Plead Guilty in IRS Bribery Scheme
In July 2024, in the Southern District of New York, John Chen, a U.S. citizen; and Lin Feng, a
People’s Republic of China (PRC) citizen; pleaded guilty to acting as unregistered agents of a
foreign government and bribing a public official. The charges were in connection with a plot
to target U.S.-based practitioners of Falun Gong, a spiritual movement banned in the PRC.
According to a U.S. Department of Justice press release, from January 2023 to May 2023,
Chen and Feng engaged in a scheme directed by the PRC government to manipulate the
IRS’s Whistleblower Program in an effort to strip the tax-exempt status of an entity run and
maintained by Falun Gong practitioners. After Chen filed a defective whistleblower complaint
with the IRS, Chen and Feng paid $5,000 in cash bribes, and promised to pay substantially
more, to a purported IRS agent who was an undercover officer, in exchange for assistance in
advancing the whistleblower complaint. During a meeting in Newburgh, New York, Chen
gave the undercover officer a $1,000 cash bribe as an initial, partial bribe payment. Chen
further offered to pay the undercover officer a total of $50,000 for opening an audit on the
entity run by Falun Gong practitioners, as well as 60 percent of any whistleblower award
from the IRS if Chen’s whistleblower complaint was successful. Furthermore, Feng paid the
undercover officer a $4,000 cash bribe at John F. Kennedy International Airport as an
additional partial bribe payment in furtherance of the scheme.
28│ April 1, 2024 – September 30, 2024
CARES Act Fraud
New Hampshire Man Sentenced for CARES Act Fraud
On May 29, 2024, in the District of New Hampshire, David Dodge was sentenced to
34 months imprisonment, 3 years of supervised release, and ordered to pay $219,323 in
restitution. Dodge pleaded guilty to bank fraud for his role involving Paycheck Protection
Program (“PPP”) fraud.
Beginning in March 2020, Dodge used the identity of a minor child to apply for an Employer
Identification Number (EIN) from the IRS. Dodge used that EIN in some of the fraudulent
applications. According to a Department of Justice press release dated Feb. 21, 2024,
Dodge claimed to own or control multiple businesses in New Hampshire and Massachusetts,
but in reality, these companies had no operations and served no business purpose. Dodge
used fake supporting documents, including fraudulent tax documents and a doctored
limited liability company certificate, to submit 30 fraudulent applications for PPP loans
from private lenders; Economic Injury Disaster Loans from the U. S. Small Business
Administration; and pandemic relief grants from the New Hampshire Governor’s Office for
Emergency Relief and Recovery, and the Massachusetts Growth Capital Corporation.
Lenders detected most of the fraudulent applications; however, Dodge was able to obtain
$219,323 out of the approximately $2.5 million he sought. Dodge used some of the
fraudulently obtained funds to purchase jewelry.
Idaho Man Indicted for Bank Fraud
On May 14, 2024, in the District of Idaho, Luis Vasquez was indicted for bank fraud related
to a fraudulent PPP loan application. The indictment alleges that beginning in January 2021,
Vasquez obtained an EIN from the IRS for Luis J Vasquez Enterprises.
Vasquez subsequently submitted false and fraudulent documents to the Idaho Central
Credit Union, including a U.S. Small Business Administration Form 2483 PPP loan
application, for a PPP loan on behalf of Luis J Vasquez Enterprises in the amount of
$51,614. The PPP application falsely claimed that Luis J Vasquez Enterprises had 11
employees; had average monthly payroll expenses of $13,783; was in operation on
February 15, 2020; and had employees for whom it paid salaries and payroll taxes.
Based upon the false statements in the PPP application and supporting documentation, the
credit union funded the loan by disbursing $51,614 in April 2021. Vasquez used the PPP
loan funds for non-qualifying, non-business-related purposes, including, among others,
payments to himself and other individuals who did not work for the business entity, and
payment of personal expenses in violation of the terms of the PPP loan agreement.
April 1, 2024 – September 30, 2024│ 29
Fighting Cybercrime
Jamaican National Sentenced in Business Email Compromise Scheme
On May 22, 2024, in the District of Maryland, Jamelia Thompson was sentenced to
37 months imprisonment, 2 years of supervised release, and ordered to pay $546,000 in
restitution after pleading guilty to bank fraud conspiracy for her role in a business email
compromise scheme.
Beginning in April 2016, Thompson and her coconspirators used the IRS’s Modernized
Internet Employer Identification Number system to create various EINs in furtherance of a
scheme to defraud. Many of these EINs were obtained from the IRS using stolen Personally
Identifiable Information. These EINs, in conjunction with fraudulently obtained state
business certificates, allowed the coconspirators to open bank accounts at various financial
institutions for the purpose of depositing stolen and/or altered checks or for receiving
fraudulently obtained wire transfers.
Thompson and her coconspirators obtained legitimate checks written on the accounts of
payor business victims and made payable to payee business victims. Thompson and her
coconspirators would alter the names of the payee on some of the checks and deposit the
checks into bank accounts they had opened and controlled. Thompson and her
coconspirators conducted over $4 million in fraudulent bank transactions.
Impersonation Scams and Schemes
Man Sentenced to Seven Months in IRS Impersonation Scheme
On June 20, 2024, in the Eastern District of Pennsylvania, Himanshu Amin was sentenced to
7 months imprisonment and 3 years of supervised release. Amin was additionally ordered to
pay $58,811 in restitution—$1,972 individually plus $56,839 jointly and severally with
another defendant.
From January 2016 to September 2016, a group of conspirators in India made phone calls
to U.S. residents and falsely claimed the victim’s owed money. The callers often pretended
they worked for the IRS. The coconspirator callers told the victims how much money they
purportedly owed, typically alleging the debt was for delinquent taxes. The callers frequently
threatened the fraud victims with arrest if they failed to immediately pay the alleged debt.
Amin was an account holder who received proceeds of the fraud scheme via deposits from
runners. Amin had access to multiple bank accounts as well as his personal bank accounts
to receive and move fraud proceeds that were deposited by coconspirators. He received
multiple cash deposits across numerous states and quickly moved the fraudulent proceeds
from their accounts to another bank account.
30│ April 1, 2024 – September 30, 2024
The coconspirator callers caused approximately 100 victim taxpayers to pay at least
$799,151 to coconspirator runners who made deposits that were deposited into the bank
accounts of the account holders.
California Man Pleads Guilty in Refund Fraud Case
On June 17, 2024, in the Eastern District of California, Miguel Martinez pleaded guilty to
one count of conspiracy to submit false claims. From November 2019 through June 2023,
Miguel Martinez and his coconspirators used stolen identities to create fake businesses.
They then reported phony wage and withholding information for those businesses to the
IRS. Martinez and his coconspirators subsequently used other individuals’ stolen
identities to file individual federal income tax returns with the IRS that falsely reported
wages and withholdings for those individuals from the fake businesses.
Martinez and his coconspirators solicited and received advice from an IRS employee
regarding how to avoid IRS fraud detection systems. The IRS employee’s advice included
information about the IRS’s monetary thresholds, so the tax returns Martinez and his
coconspirators filed were less likely to be deemed suspicious or flagged by the IRS for
suspected fraud.
Martinez and his coconspirators filed thousands of fraudulent individual federal income
tax returns, claiming over $9.5 million in refunds and receiving $2.3 million in refunds
from the IRS. When arrested, Martinez had over $750,000 in fraudulent tax refund
checks, identification cards for more than 200 people, and multiple firearms and
ammunition.
Theft of U.S. Treasury Checks
Postal Worker Charged With Stealing More Than $4 Million in U.S. Treasury Checks
On July 8, 2024, in the Eastern District of New York, Kevaughn Wellington was indicted on
one count of conspiracy to steal government funds, one count of theft of government funds,
one count of possession of stolen mail, and one count of theft of mail by a U.S. Postal
Service employee.
According to a U.S. Department of Justice press release and court documents, between
June 2021 and August 2023, Wellington and a coconspirator engaged in a scheme to steal
and sell Treasury checks intended for, among other things, individuals entitled to Social
Security benefits, COVID-19 stimulus checks, and tax refunds. Wellington stole parcels
containing Treasury checks from New York’s John F. Kennedy (JFK) Mail Facility where he
was employed at the time as a postal worker.
Together with others, Wellington sold the stolen Treasury checks for a cut of the profit. As
part of the scheme, Wellington and a coconspirator stole over 125 Treasury checks valued
at more than $4 million.
April 1, 2024 – September 30, 2024│ 31
Investigations Statistical Reports
Significant Investigative Achievements (April 1, 2024, Through September 30, 2024)
Complaints/Allegations Received by TIGTA
Complaints Against IRS Employees 1,267
Complaints Against Non-Employees 2,067
Total Complaints/Allegations 3,334
Investigations Initiated 513
In Process Within TIGTA 15 497
Referred to IRS for Action 753
Referred to IRS for Information Only 132
Referred to a Non-IRS Entity 16 0
Closed With No Referral 631
Closed Associated With Prior Investigation 668
Closed With All Actions Completed 140
Total Complaints/Allegations 3,334
Investigations Opened and Closed
Total Investigations Opened 904
Total Investigations Closed 1,032
Financial Accomplishments
Embezzlement/Theft Funds Recovered $428,367
Contract Fraud and Overpayments Recovered $0
Court-Ordered Fines, Penalties, and Restitution $79,799,497
Out-of-Court Settlements $0
Potentially Compromised by Bribery $0
Tax Liability of Taxpayers Who Threaten and/or Assault IRS Employees $555,922
IRS Assets and Resources Protected Against Malicious Loss $0
Total Financial Accomplishments $80,783,787
15 Complaints for which final determination had not been made at the end of the reporting period.
16 A non-IRS entity includes other law enforcement entities or federal agencies.
32│ April 1, 2024 – September 30, 2024
Status of Closed Criminal Investigations
Criminal Referral Employee Non-Employee Total
Referred – Accepted for Prosecution 4 122 126
Referred – Declined for Prosecution 191 218 409
Referred – Pending Prosecutorial Decision 10 78 88
Total Criminal Referrals 17 205 418 623
No Referral 194 132 326
Criminal Dispositions 18
Criminal Disposition Employee Non-Employee Total
Guilty (convicted) 0 6 6
Guilty (plea) 4 95 99
Nolo Contendere (no contest) 0 0 0
Pretrial Diversion 0 2 2
Deferred Prosecution 19 1 0 1
Not Guilty 0 6 6
Dismissed 0 4 4
Total Criminal Dispositions 5 113 118
Administrative Dispositions on Closed Investigations 20
Removed/Terminated 33
Suspended/Reduction in Grade 21
Resigned/Retired/Separated Prior to Adjudication 63
Oral or Written Reprimand/Admonishment 69
Clearance Letter/Closed, No Action Taken 47
Alternative Discipline/Letter With Cautionary Statement/Other 43
Non-Employee Actions 21 147
Total Administrative Dispositions 423
17 Criminal referrals include both federal and state dispositions.
18 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.
19 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.
20 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.
21 Administrative actions taken by the IRS against non-IRS employees, e.g., contractors.
April 1, 2024 – September 30, 2024│ 33
Summary of Investigative Reports and Criminal Referrals
Criminal Referral Breakdown
Number of Investigative Reports Issued
Referred to the Department of Justice for Criminal Prosecution 517
Referred to State/Local Prosecuting Authorities 27
Number of Indictments and Criminal Informations
Indictments 100
Criminal Informations 16
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.
No-Knock Warrants
During the reporting period, TIGTA did not have any “no-knock” warrants for entries:
• Pursuant to judicial authorization;
• Pursuant to exigent circumstances; and
• In which a law enforcement officer or other person was injured during a
no-knock entry.
34│ April 1, 2024 – September 30, 2024
Suspension and Debarment
The following table represents the number of cases TIGTA has referred to Treasury’s Office
of Procurement Executive, who is the Department’s Suspension and Debarment Official.
Cases are referred for potential suspension or debarment action, including any subsequent
action taken by the Treasury Department, between April 1, 2024, and Sept. 30, 2024.
Summary of Suspension and Debarment Referrals
Referred Pending Suspended Debarred Declined
Office of Investigations 2 15 0 0 0
Closed Investigations Involving IRS Senior Government Employees22
Detailed Description of the If Declined,
Criminal Date
Facts and Circumstances of Disposition Date of
Status Referred
the Investigation Declination
A senior government employee
Closed Without
allegedly allowed harassment to N/A N/A N/A
Action Letter
an IRS employee.
A senior government employee
allegedly used illegal drugs and Oral / Written
N/A N/A N/A
made threatening statements to Counseling
a taxpayer.
A senior government employee
allegedly deleted IRS emails and Admonished /
Declined 11/18/2022 11/18/2022
obstructed a criminal Reprimanded
investigation.
A senior government employee
Admonished /
allegedly participated in N/A N/A N/A
Reprimanded
unapproved outside employment.
A senior government employee
Admonished /
allegedly participated in matters N/A N/A N/A
Reprimanded
resulting in a conflict of interest.
22 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. 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(a)(6).
April 1, 2024 – September 30, 2024│ 35
Detailed Description of the If Declined,
Criminal Date
Facts and Circumstances of Disposition Date of
Status Referred
the Investigation Declination
A senior government employee
Oral / Written
allegedly provided preferential N/A N/A N/A
Counseling
treatment to certain employees.
A senior government employee
Oral / Written
allegedly provided preferential N/A N/A N/A
Counseling
treatment to certain employees.
A senior government employee
allegedly provided preferential Clearance Letter N/A N/A N/A
treatment to a certain employee.
A senior government employee
allegedly abused the power of Clearance Letter N/A N/A N/A
their position.
A senior government employee
allegedly provided preferential Clearance Letter N/A N/A N/A
treatment to taxpayers.
A senior government employee
allegedly hired family members
Suspension, 10 Days N/A 12/18/2023 12/18/2023
and obstructed the subsequent
investigation.
36│ April 1, 2024 – September 30, 2024
Reports With Unimplemented Corrective Actions
The Inspector General Act requires that we identify any recommendations described in
previous semiannual reports, including the potential cost savings of those recommendations
for which corrective actions have not been completed. Following is a list of audit and evaluation
reports with unimplemented corrective actions. The list is based on information from the
Treasury Department’s Joint Audit Management Enterprise System (JAMES). Click the link in
the report number to obtain more details about the recommendations.
Revising Tax Debt Identification Programming and Correcting Procedural Errors
Could Improve the Tax Refund Offset Program
Recommendation 1
Rep. No. 2016-40-028; March 2016
Improvements Are Needed to Ensure That Tax Accounts on the Automated
Non-Master File Are Accurately Processed
Recommendation 1
Recommendation 2—Potential Increased Revenue: $354,153
Rep. No. 2017-40-037; May 2017
Further Actions Are Needed to Reduce the Risk of Employment Tax Fraud to Businesses
That Use the Services of Professional Employer Organizations
Recommendation 3
Rep. No. 2017-40-085; September 2017
Processes Need to Be Improved to Identify Incomplete and Fraudulent Applications
for Individual Taxpayer Identification Numbers
Recommendation 5
Rep. No. 2018-40-010; January 2018
Actions Are Needed to Reduce the Risk of Fraudulent Use of Employer Identification
Numbers and to Improve the Effectiveness of the Application Process
Recommendations 3 and 9
Rep. No. 2018-40-013; February 2018
Active Directory Oversight Needs Improvement and Criminal Investigation
Computer Rooms Lack Minimum Security Controls
Recommendation 3
Rep. No. 2018-20-034; June 2018
April 1, 2024 – September 30, 2024│ 37
Improvements Are Needed in the Withholding Compliance Program
Recommendation 5
Rep. No. 2018-30-072; September 2018
Additional Actions Are Needed to Reduce Alimony Reporting Discrepancies
on Income Tax Returns
Recommendations 2 and 3
Rep. No. 2019-40-048; August 2019
The Bring Your Own Device Program’s Security Controls Need Improvement
Recommendation 4
Rep. No. 2019-20-046; September 2019
Additional Actions Are Needed to Further Reduce Undeliverable Mail
Recommendations 1 and 2
Rep. No. 2019-40-074; September 2019
Improvements Are Needed to Ensure That Consistent Suitability Checks Are Performed
for Participation in Internal Revenue Service Programs
Recommendation 9
Rep. No. 2020-40-005; November 2019
The Internal Revenue Service Can Improve Taxpayer Compliance
for Virtual Currency Transactions
Recommendation 1
Rep. No. 2020-30-066; September 2020
Security Controls Over Electronic Crimes Labs Need Improvement
Recommendations 1 and 3
Rep. No. 2021-20-003; December 2020
Expansion of Self-Correction for Electronic Filers and Other Improvements Could Reduce
Taxpayer Burden and Costs Associated With Tax Return Error Resolution
Recommendation 6
Rep. No. 2021-40-008; December 2020
38│ April 1, 2024 – September 30, 2024
Controls Over the Internal Revenue Service Contractor Tax Check Process
Need to Be Improved
Recommendation 3
Rep. No. 2021-10-039; June 2021
**********Platform Management Needs Improvement 23
Recommendation 5
Rep. No. 2021-20-063; September 2021
Increased Availability of Tax Resources and Information for Limited English Proficient
and Visually Impaired Taxpayers Has Enhanced Assistance, but Additional Improvements
Are Needed
Recommendations 4, 6, 7, and 8
Rep. No. 2022-40-008; December 2021
Administration of the Individual Taxpayer Identification Number Program
Recommendation 1
Rep. No. 2022-40-013; January 2022
Plans to Close the Austin Tax Processing Center Should Be Halted Until Hiring Challenges
and Substantial Backlogs at Remaining Centers Are Addressed
Recommendation 6
Rep. No. 2022-40-015; February 2022
Centralized Partnership Audit Regime Rules Have Been Implemented; However, Initial
No-Change Rates Are High and Measurable Goals Have Not Been Established
Recommendation 3
Rep. No. 2022-30-020; March 2022
Program and Organizational Changes Are Needed to Address the Continued Inadequate Tax
Account Assistance Provided to Taxpayers
Recommendations 11 and 18
Rep. No. 2022-46-027; March 2022
Processing of Recovery Rebate Credit Claims During the 2021 Filing Season
Recommendation 1
Recommendation 3 – Potential Funds Put to Better Use: $217,927,531
Rep. No. 2022-46-032; May 2022
23 Redaction due to subject matter that might create a risk of circumvention of the law if publicly released.
April 1, 2024 – September 30, 2024│ 39
Compliance Efforts Are Needed to Address Refund Claims Reported on Form 1139
That Are Based on the CARES Act Net Operating Loss Carryback Provisions
Recommendation 2
Rep. No. 2022-35-049; August 2022
Cloud Services Were Implemented Without Key Security Controls, Placing Taxpayer
Data At Risk
Recommendation 1
Rep. No. 2022-20-052; September 2022
Fiscal Year 2022 Statutory Review of Disclosure of Collection Activity With Respect
to Joint Returns
Recommendation 2
Rep. No. 2022-30-058; September 2022
Fiscal Year 2022 Statutory Review of Compliance With Legal Guidelines
When Issuing Levies
Recommendation 3
Rep. No. 2022-30-061; September 2022
Physical Security Controls at the ******************** 24
Recommendation 1, 5, and 6
Rep. No. 2023-IE-R001; October 2022
More Should Be Done to Increase Use and Availability of the IRS’s Taxpayer
Digital Communications Tools
Recommendation 3
Rep. No. 2023-30-003; November 2022
Fiscal Year 2023 Biannual Independent Assessment of Private Collection Agency
Performance
Recommendation 2
Rep. No. 2023-30-005; December 2022
Opportunities Exist for the IRS to Develop a More Coordinated Approach
24 Redaction due to subject matter that might create a risk of circumvention of the law if publicly released.
40│ April 1, 2024 – September 30, 2024
to Examination Workplan Development and Resource Allocation
Recommendations 1, 2, and 4
Rep. No. 2023-30-008; February 2023
Actions Have Been Taken to Implement Taxpayer First Act Provisions Related to the IRS
Independent Office of Appeals; However, Some Improvements Are Still Needed
Recommendations 1 and 3
Rep. No. 2023-15-010; February 2023
The IRS Has Not Adequately Prioritized Federal Civilian Employee Nonfilers
Recommendations 1, 8, 9, 10, and 11
Rep. No. 2023-30-011; March 2023
Additional Actions Are Needed to Improve and Secure the Income Verification
Express Service Program
Recommendations 7, 8, and 13
Rep. No. 2023-45-014; March 2023
Actions Are Needed to Improve the Completeness, Development, and Review
of IRS Tax Gap Estimates
Recommendation 6
Rep. No. 2023-10-016; March 2023
The IRS Eliminated Its Employee Suggestion Program Without Plans for a Replacement
Recommendation 2
Rep. No. 2023-30-020; March 2023
Implementation of the Taxpayer First Act Provision Regarding the Management and
Purchase of Information Technology Resources Needs Improvement
Recommendation 6
Rep. No. 2023-25-017; April 2023
Actions Are Being Taken to Reduce Risks to Employees Whose Names Are Required
to Be Included on Internal Revenue Service Correspondence
Recommendations 1 and 2
Rep. No. 2023-IE-R004; May 2023
Assessment of the Internal Revenue Service’s Active Shooter Readiness and Training
April 1, 2024 – September 30, 2024│ 41
Recommendations 3 and 5
Rep. No. 2023-IE-R005; May 2023
Additional Actions Are Needed to Reduce Accounts Management Function Inventories
to Below Pre-Pandemic Levels
Recommendations 6, 8, and 10
Rep. No. 2023-46-026; May 2023
Services to Underserved Communities Have Been Ongoing; However, an Agencywide
Strategy Has Not Been Developed
Recommendation 1
Rep. No. 2023-15-027; May 2023
Plans Were Made to Implement the Taxpayer Experience Strategy, but Progress
Is Not Monitored
Recommendations 1 and 2
Rep. No. 2023-15-028; May 2023
Recurring Identification Is Needed to Ensure That Employers Full Pay
the Deferred Social Security Tax
Recommendation 2
Rep. No. 2023-46-030; May 2023
Opportunities Exist to Improve the Accuracy of Information in the Centralized
Authorization File and Increase the Use of the Tax Pro Account System
Recommendation 1
Rep. No. 2023-40-033; May 2023
Additional Actions Are Needed to Improve Data Collection and Analysis of Whistleblower
Claims and Ensure Full Compliance With the Taxpayer First Act
Recommendation 1
Rep. No. 2023-35-031; June 2023
Actions Have Been Taken to Improve the Privacy Program; However, Some Privacy Controls
Have Not Been Fully Implemented and Assessed
Recommendation 4
Rep. No. 2023-20-034; June 2023
American Rescue Plan Act: Review of the Reconciliation of the Child Tax Credit
42│ April 1, 2024 – September 30, 2024
Recommendation 1 – Potential Funds Put to Better Use: $9,957,194
Rep. No. 2023-47-035; June 2023
American Rescue Plan Act: Continued Review of Premium Tax Credit Provisions
Recommendations 1, 2, and 3
Rep. No. 2023-47-036; June 2023
Actions Are Needed to Address Inaccurate, Incomplete, and Inconsistent Taxpayer
Assistance Center Information Provided to Taxpayers
Recommendations 3, 4, 5, 6, and 7
Rep. No. 2023-IE-R006; July 2023
Review of the IRS Independent Office of Appeals Collection Due Process Program
Recommendation 1
Rep. No. 2023-10-038; July 2023
The Customer Callback System Benefits Taxpayers; However, Performance Measures
Are Not Comprehensive and More Callers Could Qualify for Callback Offers
Recommendation 1
Rep. No. 2023-10-046; July 2023
Sensitive Business and Individual Tax Account Information Stored on Microfilm
Cannot Be Located
Recommendations 3, 5, and 12
Rep. No. 2023-IE-R008; August 2023
Expanded Use of Special Payment Incentives Could Help Improve Recruitment
and Retention Efforts
Recommendation 1
Rep. No. 2023-10-043; August 2023
Known Exploited Vulnerabilities That Remain Unremediated Could Put
the IRS Network at Risk
Recommendation 2
Rep. No. 2023-20-048; August 2023
Fiscal Year 2023 Statutory Review of Restrictions on Directly Contacting
April 1, 2024 – September 30, 2024│ 43
Represented Taxpayers
Recommendations 3 and 5
Rep. No. 2023-30-051; August 2023
The IRS Needs to Leverage the Most Effective Training for Revenue Agents
Examining High-Income Taxpayers
Recommendations 3 and 4
Rep. No. 2023-30-054; August 2023
Review of the IRS’s Process to Perform Mandatory Annual Examinations
of Presidential Returns for Tax Years 2000 Through 2021
Recommendations 1, 2, 4, and 5
Rep. No. 2023-IE-R011; September 2023
The Internal Revenue Service Has Experienced Challenges in Transitioning
to Electronic Records
Recommendations 1 and 2
Rep. No. 2023-10-050; September 2023
Actions Have Been Taken to Enhance Fuel Tax Credit Screening and Examination
Processes; However, Improvements Are Still Needed
Recommendation 4
Rep. No. 2023-30-053; September 2023
Fiscal Year 2023 Statutory Audit of Compliance With Legal Guidelines Restricting
the Use of Records of Tax Enforcement Results
Recommendation 4
Rep. No. 2023-30-058; September 2023
The Enterprise Physical Access Control System Implementation and Physical Security
Controls Need Improvement
Recommendations 1, 2, 3, 5, and 6
Rep. No. 2023-20-062; September 2023
Fiscal Year 2023 Statutory Review of Compliance With Legal Guidelines
When Issuing Levies
Recommendations 1, 4, 6, and 7
Rep. No. 2023-30-066; September 2023
The Innocent Spouse Program Needs Improved Guidance for Employees
44│ April 1, 2024 – September 30, 2024
and Increased Communications With Taxpayers
Recommendation 4
Rep. No. 2024-300-001; October 2023
Thousands of Tax Exempt and Government Entities Taxpayers May Not Have Received
Satisfactory Responses to Their Questions
Recommendations 1, 2, and 3
Rep. No. 2024-100-003; October 2023
The IRS Has Improved Audit Trail Collection; However, Not All Audit Trail Data
Are Being Collected and User Account Controls Need Improvement
Recommendations 1 and 3
Rep. No. 2024-200-005; October 2023
Actions Are Needed to Improve the Quality of Customer Service in Telephone Operations
Recommendation 4
Rep. No. 2024-IE-R001; November 2023
The Internal Revenue Service Is Not Fully Complying With the No TikTok
on Government Devices Implementation Guidance
Recommendations 3 and 6
Rep. No. 2024-IE-R003; December 2023
Improvements Are Needed to Ensure the Health and Safety of Employees at the C-site
Recommendations 1, 4, 5, 6, 11, and 16
Rep. No. 2024-IE-R006; December 2023
Post-Pandemic Actions Have Contributed to Declines in Automated Collection System
Level of Service and Collection Inventories
Recommendations 2, 3, and 4
Rep. No. 2024-300-008; December 2023
Administration of the Individual Taxpayer Identification Number Program
Recommendations 1, 2, 4, and 8
Recommendation 7 – Potential Funds Put to Better Use: $8,114,040
Rep. No. 2024-400-012; December 2023
Progress Update on Tax Return Scanning Initiatives
April 1, 2024 – September 30, 2024│ 45
Recommendations 1 and 2
Rep. No. 2024-408-013; December 2023
Interim Evaluation – Assessment of the IRS’s Comprehensive Facilities Security Review
and Employee Safety and Security Measures
Recommendations 1, 2, 9, 11, 12, and 13
Rep. No. 2024-IE-R004; January 2024
Assessment of Processes to Grant Access to Sensitive Systems and to Safeguard
Federal Tax Information
Recommendations 1 and 2
Rep. No. 2024-IE-R008; February 2024
The IRS Continues to Reduce Backlog Inventories in the Tax Processing Centers
Recommendation 1
Rep. No. 2024-406-020; March 2024
46│ April 1, 2024 – September 30, 2024
Appendix I
Other Required Reporting
The Inspector General Act requires Inspectors General to address the following matters.
Results for the Reporting Period
Topic
Ending September 30, 2024
There were no attempts to interfere with TIGTA’s
independence, including:
• budget constraints;
Interference/Access to Information • incidents of resistance or objection to
oversight activities; and/or
• restricted or significantly delayed access to
information.
There were no instances in which significant
Disputed Recommendations recommendations were disputed.
The IRS issued no significant revised
Revised Management Decisions management decisions.
TIGTA received no management decisions during
Management Decisions for Reports
the current reporting period for reports issued in
Issued in a Prior Reporting Period a prior reporting period.
There were no reports from a prior reporting
Reports Issued in the Prior Reporting Period period for which TIGTA failed to receive a
With No Management Response management response within 60 days of
issuance.
Disclosure No reports were closed and not disclosed
to the public.
TIGTA’s Office of Chief Counsel reviewed 147
Review of Legislation and Regulations proposed regulations and legislative requests
during the reporting period.
April 1, 2024 – September 30, 2024│ 47
Appendix II
TIGTA’s Statutory Reviews
The following table reflects our FY 2024 statutory reviews.
Reference to
Explanation of the Provision Comments/TIGTA Audit Status
Statutory Coverage
Enforcement Statistics Requires TIGTA to evaluate the IRS’s Rep. No. 2024-300-061; Sep 2024
compliance with restrictions under We found instances of noncompliance
I.R.C. § 7803(d)(1)(A) RRA 98 § 1204 on the use of with RRA 98 § 1204 requirements.
enforcement statistics to evaluate IRS Specifically, we identified the following
employees. noncompliance: 7 violations in which a
Record of Tax Enforcement Results
was used to evaluate an employee
§ 1204(a); 30 instances in which IRS
management failed to either maintain
the retention standard documentation
or ensure that it was appropriately
signed [§ 1204(b)]; and 28 managers
who did not complete at least 1
FY 2023 quarterly certification
[§ 1204(c)]. We identified six self-
assessments containing high-risk terms
and phrases, and Section 1204 and
non-Section 1204 employees who are
not consistently designated in the
human resource system. Further, 34
Section 1204 employees failed to
complete the Section 1204 training in
FY 2023.
Restrictions on Directly Contacting Requires TIGTA to evaluate the IRS’s Rep. No. 2024-300-058; Sep 2024
Taxpayers compliance with restrictions under We analyzed the extent to which private
I.R.C. § 7521 on directly contacting collection agency (PCA) employees
I.R.C. § 7803(d)(1)(A)(ii) taxpayers who have indicated they prefer complied with the direct contact
their representatives be contacted. provisions of I.R.C. §§ 7521(b)(2)
and (c) and the fair tax collection
practices of I.R.C. § 6304(a)(2) during
interactions with taxpayers or their
representatives. We reviewed incoming
and outgoing call logs from all three
PCAs for July 1, 2022, to June 30, 2023,
and found that the IRS does not always
submit timely power of attorney
information to the PCAs. For the 74
taxpayers reviewed, 3 taxpayers had
power of attorney information on file
with the IRS that did not correspond
with information provided in the PCAs’
call logs. In addition, we found that
confusion may arise when taxpayer
accounts assigned to a PCA are
suspended awaiting the submission
and processing of Form 2848, Power of
Attorney and Declaration of
Representative.
48│ April 1, 2024 – September 30, 2024
Filing of a Notice of Lien Requires TIGTA to evaluate the IRS’s Rep. No. 2024-300-037; Aug 2024
compliance with required procedures Our systemic review of 103,460 Notice
I.R.C. § 7803(d)(1)(A)(iii) under I.R.C. § 6320(a) upon the filing of a of Federal Tax Liens (NFTL) filed from
notice of lien. July 1, 2022, to June 30, 2023, in which
a Collection Due Process (CDP) notice
was required to be sent to the taxpayer,
and a separate review of a statistical
sample of 117 NFTLs from the same
population, identified a total of 272
taxpayers that were potentially not
timely mailed a CDP notice as required
by I.R.C. § 6320(a). The sample
identified 41 cases in which the
taxpayer designated their authorized
representative to receive notices;
however, in 3 of the 41 cases, the IRS
did not provide CDP notices
to the taxpayers’ authorized
representatives. We also identified
thousands of levies that were issued
during the period when taxpayers had
the right to request a lien CDP hearing.
We determined that the IRS did not take
any of the required preemptive steps
available to suspend collection activity
on taxpayers impacted by the hurricane
on Sept. 28, 2022.
Extensions of the Statute of Requires TIGTA to include information Rep. No. 2024-100-018; Mar 2024
Limitations for Assessment of Tax regarding extensions of the statute of We reviewed a judgmentally selected
limitations for assessment of tax under sample of 36 closed taxpayer audit files
I.R.C. § 7803(d)(1)(C) I.R.C. § 6501 and the provision of notice with assessment statute extensions
to taxpayers regarding the right to refuse and found that the IRS complied with
I.R.C. § 6501(c)(4)(B) or limit the extension of particular issues I.R.C. § 6501(c)(4)(B). However, the IRS
or a particular period of time. had difficulties providing most of the
paper documents requested. The IRS
is experiencing a backlog of inventory.
We are currently evaluating the
backlog and identified challenges the
IRS is facing while attempting to
eliminate the significant backlog.
Levies Requires TIGTA to evaluate the IRS’s Rep. No. 2024-300-056; Sep 2024
compliance with required procedures We reviewed levies issued by Field
I.R.C. § 7803(d)(1)(A)(iv) under I.R.C. § 6330 regarding levies. Collection revenue officers for more
than 48,000 taxpayers during the
period July 1, 2022, through
June 30, 2023. The IRS generally
complied with legal and administrative
requirements. However, we identified
more than 1,900 instances of
noncompliance that resulted in
potential violations of taxpayers’ rights
or taxpayers being burdened.
April 1, 2024 – September 30, 2024│ 49
Collection Due Process Requires TIGTA to evaluate the IRS’s Rep. No. 2024-300-060; Sep 2024
compliance with required procedures We reviewed 103 levy CDP hearing
I.R.C. §§ 7803(d)(1)(A)(iii) and (iv) under I.R.C. §§ 6320 and 6330 requests from the error populations
regarding taxpayers’ rights to appeal identified in the FY 2023 statutory
lien or levy actions. reviews of levies and liens. Prohibited
levy action was taken in 93 cases
during the CDP hearing. In 11 of the
cases, the hearing was cancelled so no
law and administrative review was
required. While 2 cases had no case
file, the remaining 80 cases included
statements from the appeals officer
attesting that all legal and
administrative requirements had been
met. However, appeals officers did not
verify that the IRS successfully
suspended collection actions on the
subject tax modules during the CDP
hearing period. In 17 of the 93 cases
with a prohibited levy, the IRS received
over $226,000 in levy payments. All
the prohibited levy payments were
refunded, or the taxpayer requested
that the IRS apply the levy payment to
another balance due.
Seizures Requires TIGTA to evaluate the IRS’s Rep. No. 2024-300-054; Sep 2024
compliance with required procedures under We reviewed 73 taxpayer cases in
I.R.C. § 7803(d)(1)(A)(iv) I.R.C. §§ 6330 through 6344 when which the IRS conducted seizures
conducting seizures. during the period July 1, 2022, through
June 30, 2023. We found that Field
Collection employees generally
adhered to procedures that help
ensure compliance with I.R.C. §§ 6330
through 6344. However, we identified
three cases in which revenue officers
conducted seizures without following
proper procedures or obtaining proper
approvals, potentially violating
taxpayer rights.
Taxpayer Designations–Illegal Tax An evaluation of the IRS’s compliance Memorandum to IRS; May 2024
Protester Designation and Similar with restrictions under RRA 98 § 3707 Our review determined that Illegal Tax
Designations on designation of taxpayers. Protester codes were not used on the
Master File during the review period of
I.R.C. § 7803(d)(1)(A)(v) July 1, 2022, through June 30, 2023.
Since our first review in FY 1999, when
the IRS removed the Illegal Tax
Protester code from the Master File,
we have not identified any uses of the
code or any other coding of a similar
designation on the Master File.
50│ April 1, 2024 – September 30, 2024
Disclosure of Collection Activity With Requires TIGTA to review and certify Rep. No. 2024-300-051; Sep 2024
Respect to Joint Returns whether the IRS is complying with We reviewed 100 case files from the
I.R.C. § 6103(e)(8), which requires the IRS Wage and Investment Division to
I.R.C. § 7803(d)(1)(B) to disclose information to an individual determine whether employees
(TIGTA requirement) filing a joint return on collection activity followed the joint return disclosure
involving the other individual filing the requirements on collection information
I.R.C. § 6103(e)(8) return. requests. We determined that
(IRS requirement) disclosure requirements were not
followed in 14 (28 percent) of the
50 Accounts Management cases
and 6 (12 percent) of the 50 Field
Assistance cases reviewed. In 16
cases, taxpayers or their
representatives did not receive
information related to collection
activities of the taxpayers’ joint
liabilities to which they were entitled,
and in four cases, taxpayers’
information was inappropriately
disclosed.
Taxpayer Complaints Requires TIGTA to include in each Statistical results on the number of
Semiannual Report to Congress the taxpayer complaints received are
I.R.C. § 7803(d)(2)(A) number of taxpayer complaints received; shown on page 32.
and the number of employee
misconduct and taxpayer abuse
allegations received by the IRS or TIGTA
from taxpayers, IRS employees, and
other sources.
Administrative or Civil Actions With Requires TIGTA to include information Rep. No. 2024-300-059; Sep 2024
Respect to the Tax Collection regarding any administrative or civil Our review of Automated Labor
Practices Act of 1996 actions with respect to violation of the and Employee Relations Tracking
fair debt collection provision of System (ALERTS) employee
I.R.C. § 7803(d)(1)(G) I.R.C. § 6304, including a summary of misconduct cases from July 1, 2022,
such actions and any resulting through June 30, 2023, that were not
I.R.C. § 6304 judgments or awards granted. coded as potential Fair Tax Collection
Practices (FTCP) violations, found that
RRA 98 § 3466 23 of the 123 cases included taxpayer
complaints of harassment, abuse, and
unprofessionalism and should have
been documented in ALERTS as
potential FTCP violations. Our review of
PCAs incident logs from July 1, 2022,
through June 30, 2023, found
inconsistencies among the PCAs
reporting potential Fair Debt Collection
Practices Act § 805(b) third-party
disclosure violations. We found 107
Field Collection and 5 Campus
Collection potential FTCP violations in
the Embedded Quality Review System
case narratives that were not reported
in the ALERTS database.
April 1, 2024 – September 30, 2024│ 51
Denials of Requests for Information Requires TIGTA to include information Rep. No. 2024-100-023; Apr 2024
regarding improper denial of requests We reviewed a statistical sample of 99
I.R.C. § 7803(d)(1)(F) for information from the IRS, based on a of the 516 fully or partially denied
statistically valid sample of the total Freedom of Information Act (FOIA)
I.R.C. § 7803(d)(3)(A) number of determinations made by the requests and determined that the IRS
IRS to deny written requests to disclose correctly withheld information using
information to taxpayers on the basis of FOIA exemption (b)(7) for 98 of the 99
I.R.C. § 6103 or 5 U.S.C. § 552(b)(7). FOIA information requests we sampled.
This was an improvement compared to
our last report, in which we reported
that the Disclosure Office did not
follow FOIA redaction requirements for
11 of the 83 requests reviewed. We
reviewed all 10 I.R.C. § 6103(c) and
(e) requests and did not identify any
disclosure errors.
Improper Payments Elimination and Requires TIGTA to assess the IRS’s Rep. No. 2024-400-026; May 2024
Recovery Act of 2010 compliance with improper payment For FY 2023, the IRS was largely
requirements. compliant with reporting requirements
31 U.S.C. § 3321 contained in the Payment Integrity
Information Act of 2019. However, the
IRS still has not satisfied the Payment
Integrity Act goal to reduce improper
payment rates to less than 10 percent.
Government Charge Card Abuse Requires TIGTA to report on the IRS’s Rep. No. 2024-100-016; Jan 2024
Prevention Act of 2012 progress in implementing purchase and Our review of the IRS’s purchase card
travel card audit recommendations. program found that controls are
Pub. L. No. 112-194, 126 Stat. 1445 generally effective, and the number of
(codified as amended at purchase card violations identified by
5 U.S.C. § 5701 note, 10 U.S.C. the IRS Credit Card Services Branch
§ 2784, and 41 § U.S.C. 1909) were minimal.
Rep. No. 2024-100-044; Jul 2024
Our review of the IRS’s purchase card
program found that controls are
generally effective, and the number of
purchase card violations identified by
the Chief Financial Officer’s Credit Card
Services Branch were minimal.
Biannual Independent Assessment Independently evaluate the Report due Dec 2024. To be included
of Private Collection Agency performance of private collection in the Mar 2025 SAR.
Performance agencies.
Office of National Drug Control Policy Requires TIGTA to authenticate the IRS’s Rep. No. 2024-100-014; Dec 2023
(ONDCP) Detailed Accounting ONDCP detailed accounting submission We are not aware of any material
Submission and Assertions and assertions. modifications that should be made to
the assertions in the IRS’s FY 2023
National Drug Enforcement Policy Budget Formulation Compliance
21 U.S.C. § 1704(d) and the ONDCP Report and Detailed Accounting Report
Circular, Drug Control Accounting, in order for them to be in accordance
dated May 1, 2007. with the ONDCP Circular.
52│ April 1, 2024 – September 30, 2024
Individual Taxpayer Identification Assess that only individuals with a tax Rep. No. 2024-400-012; Dec 2023
Number (ITIN) Program need are assigned an ITIN. Included in the Mar 2024 SAR.
Adequacy and Security of the Requires TIGTA to evaluate the Information Technology Reviews:
Technology of the IRS adequacy and security of the IRS’s
technology. Rep. No. 2024-408-004; Oct 2023
I.R.C. § 7803(d)(1)(D)
Rep. No. 2024-200-009; Jan 2024
Rep. No. 2024-200-015; Feb 2024
Rep. No. 2024-IE-R008; Feb 2024
Rep. No. 2024-406-020; Mar 2024
Rep. No. 2024-200-025; Jun 2024
Rep. No. 2024-408-031; Jun 2024
Rep. No. 2024-200-038; Aug 2024
Rep. No. 2024-2S8-055; Sep 2024
Rep. No. 2024-208-052; Sep 2024
Rep. No. 2024-400-062; Sep 2024
Rep. No. 2024-408-066; Sep 2024
Rep. No. 2024-200-049; Sep 2024
Security Reviews:
Rep. No. 2024-200-005; Oct 2023
Rep. No. 2024-200-032; Jul 2024
Rep. No. 2024-200-039; Jul 2024
Rep. No. 2024-20S-034; Aug 2024
Rep. No. 2024-200-046; Sep 2024
Rep. No. 2024-200-042; Sep 2024
Rep. No. 2024-200-047; Sep 2024
Rep. No. 2024-200-048; Sep 2024
Rep. No. 2024-100-063; Sep 2024
Rep. No. 2024-200-050; Sep 2024
April 1, 2024 – September 30, 2024│ 53
Appendix III
Audit and Evaluation Reports Issued
April 1, 2024, Through September 30, 2024 25
Report Title Report Number/Link26
April 2024
Fiscal Year 2024 Mandatory Review of Compliance With the Freedom of Information Act 2024-100-023
Criminal Investigation Had Success With Ghost Employers, While Civil Enforcement Efforts
2024-300-019
Can Be Improved
Additional Actions Need to Be Taken to Identify and Address Noncompliant Biofuel
2024-300-021
Tax Credit Claims
Interim Results of the 2024 Filing Season 2024-408-024
Quarterly Snapshot: The IRS's Inflation Reduction Act Spending Through December 31, 2023 2024-IE-R011
May 2024
Taxpayer Assistance Centers Generally Provided Quality Service, but Additional Actions Are
2024-100-022
Needed to Reduce Taxpayer Burden
Assessment of Fiscal Year 2023 Compliance With Improper Payment Reporting Requirements 2024-400-026
Actions Need to Be Taken to Ensure the Success of the Lifting Communities Up Initiative in
2024-IE-R012
Expanding Services and Assistance to Taxpayers in Underserved Populations
June 2024
The IRS Has Reduced Its Overall Space Footprint; However, a Significant Amount of Unneeded
2024-100-027
Office Space Still Remains
Some Corrective Actions to Address Reported Information Technology Weaknesses Were Not
2024-200-025
Adequately Documented and Effectively Implemented
The IRS Ceased Compliance With the $10 Million Taxpayer Treasury Directive in Favor of an
2024-300-028
Overall Focus on High-Income Taxpayer Noncompliance
Inflation Reduction Act: Interim Results of the Direct File Pilot 2024-408-031
A Comprehensive Strategy Is Needed to Address the Significant Backlog of Adjustment Source
2024-IE-R013
Documentation Inventory
Opportunities Exist to Improve Taxpayer Service to Underserved, Underrepresented, and Rural
2024-IE-R014
Communities
25 Unless otherwise noted, IRS management decisions were made by the end of the reporting period for all audit products
listed in this appendix.
26 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.
54│ April 1, 2024 – September 30, 2024
Quarterly Snapshot: The IRS’s Inflation Reduction Act Spending Through March 31, 2024 2024-IE-R015
July 2024
Improvements Are Needed to Effectively Provide Oversight and Management of the
2024-300-029
Interagency Agreement With the National Archives and Records Administration
Virtual Currency Tax Compliance Enforcement Can Be Improved 2024-300-030
Actions Have Been Taken to Improve Security Controls for the Planned Expanded Use of
2024-200-032
Login.gov; However, Additional Security Improvements Are Needed
Review of the Internal Revenue Service’s Purchase Card Violations Report 2024-100-044
Ninety-Five Percent of IRS and Contractor Employees Were Tax Compliant; However, There
2024-100-033
Were Some Tax Delinquencies or Prior Conduct/Performance Issues
Fiscal Year 2024 IRS Federal Information Security Modernization Act Evaluation 2024-200-039
The Internal Revenue Service Is Not Fully Complying With the 90- and 120-Day Requirements
2024-IE-R016
of the No TikTok on Government Devices Implementation Guidance
Improvements Are Needed to Ensure That Local Taxpayer Advocate Service Telephone Lines
2024-IE-R018
Are Properly Monitored
August 2024
The IRS Does Not Have Specific Plans to Replace and Decommission Legacy Systems 2024-200-038
Access to and Safeguarding Federal Tax Information, Investigating Unauthorized Access, and
2024-20S-034
Ongoing Audits on the Security of Taxpayer Data
Improvements to the Tax-Exempt Compliance Unit Could Reduce Mistakes and Unproductive
2024-100-040
Examination Referrals
Review of the Advanced Manufacturing Production Credit Implementation Identified
2024-308-035
Weaknesses in the Pre-Rulemaking Process
Fiscal Year 2024 Statutory Review of Compliance With Notice of Federal Tax Lien Filing
2024-300-037
Collection Due Process Procedures
Efforts to Oversee State Agency Access to Federal Tax Information Were Generally Successful;
2024-100-041
However, Some Improvements Are Needed
The IRS Faces Challenges to Address Tax Avoidance Strategies of Large Multinational
2024-400-045
Corporations
The IRS Has Made Limited Progress Developing the Methodology to Comply With the Treasury
Directive to Not Increase the Audit Rate for Taxpayers With Incomes Below $400,000 Due to 2024-308-043
Planning and Implementation Challenges
Employee Safety and Physical Security Review of the ********Taxpayer Assistance 2024-IE-R017
Center and Tax Compliance Office 27
27 Redaction due to subject matter that might create a risk of circumvention of the law if publicly released.
April 1, 2024 – September 30, 2024│ 55
September 2024
The Vulnerability Disclosure Policy Has Been Implemented; However, Actions Are Needed
2024-200-046
to Improve the Program
Review of the Corporate Alternative Minimum Tax Implementation Identified Weaknesses
2024-308-036
in the Pre-Rulemaking Process
Compliance Data Warehouse Security Needs Improvement 2024-200-042
Improvements Are Needed in the Cloud Security Assessment, Approval, and Monitoring
2024-200-047
Processes
Progress of Information Technology Modernization Efforts 2024-2S8-055
The Individual Tax Processing Engine Project Is Progressing, but Risks Remain 2024-208-052
Actions Need to Be Taken to Improve the Data Loss Prevention Solution and Reduce
2024-200-048
the Risk of Data Exfiltration
Fiscal Year 2024 Mandatory Review of Disclosure of Collection Activity With Respect
2024-300-051
to Joint Returns
The Information Collected by Online Providers and Shared With Third Parties Is Not Clearly
2024-400-062
Disclosed to Taxpayers and Is Unknown to the IRS
Former Contractor Employees Retained Access to IRS Facilities, Systems, and Equipment 2024-100-063
Customer Satisfaction Survey Results Are Not Used Effectively to Improve Taxpayer Services 2024-100-053
Inflation Reduction Act: Implementation of the Elective Payment and Transfer
2024-408-066
of Credit Provision
Review of the IRS Independent Office of Appeals Collection Due Process Program 2024-300-060
Fiscal Year 2024 Statutory Review of Compliance With Legal Guidelines When Issuing Levies 2024-300-056
Fiscal Year 2024 Statutory Review of Potential Fair Tax Collection Practices Violations 2024-300-059
The Direct File Pilot Deployed Successfully; However, Security and Testing Improvements
2024-200-050
Are Needed
The IRS Is Not Meeting Key Federal Requirements in Its Transition to Internet Protocol
2024-200-049
Version 6
Fiscal Year 2024 Statutory Audit of Compliance With Legal Guidelines Restricting the Use of
2024-300-061
Records of Tax Enforcement Results
Fiscal Year 2024 Mandatory Review of Compliance With Legal Guidelines When Conducting
2024-300-054
Seizures of Taxpayers’ Property
Fiscal Year 2024 Statutory Review of Restrictions on Directly Contacting
2024-300-058
Represented Taxpayers
Communication Breakdowns, Hiring Volume Surges, and Aging System Integration Challenges
2024-108-069
Delayed Some IRS Hiring Efforts
Security Vulnerability Management and Configuration Compliance of a General Support
2024-200-057
System and Major Application Need Improvement
Management Took Actions to Address Erroneous Employee Retention Credit Claims;
2024-400-068
However, Some Questionable Claims Still Need to Be Addressed
56│ April 1, 2024 – September 30, 2024
Improvements Are Needed to Ensure Oversight of and Increase Participation
2024-400-067
in the Free File Program
The IRS Could Collect Over a Billion Dollars in Taxes From Unreported Wagering Income 2024-300-064
Millions of Taxpayers Took Early Retirement Distributions but Some Did Not Pay
2024-100-065
the Additional Tax, Claim an Exception, or Report the Income
Additional Actions Are Needed to Clearly Inform Taxpayers in Federally Declared Disaster
2024-IE-R019
Areas of Balance Due Payment Postponement Time Frames
Quarterly Snapshot: The IRS’s Inflation Reduction Act Spending Through June 30, 2024 2024-IE-R020
April 1, 2024 – September 30, 2024│ 57
Appendix IV
Inspector General Peer Review Activity
This appendix implements § 989C of the Dodd-Frank Wall Street Reform and Consumer
Protection Act. 28
For the period April 1, 2024 – September 30, 2024:
Peer Reviews Conducted of TIGTA by Another Office of Inspector General
• The Department of Veterans Affairs Office of Inspector General completed a peer
review of our Office of Audit. The review was completed Sept. 18, 2024, with a rating
of pass.
• The Department of Agriculture Office of Inspector General completed a peer review
of our Office of Investigations (OI) on May 11, 2024. The review found that OI is in
compliance with quality standards established by the Council of the Inspectors
General on Integrity and Efficiency and other applicable guidelines and statutes.
Outstanding Recommendations From Peer Reviews of TIGTA
• There are no outstanding recommendations from the two 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.
28 Codified at 5 U.S.C. § 405(b)(14)-(16).
58│ April 1, 2024 – September 30, 2024
Appendix V
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, 2024, through Sept. 30, 2024. Also, data concerning substantiated RRA 98 § 1203
allegations for the same period are included. See Appendix VI for § 1203 Standards.
IRS management conducted inquiries into the cases reflected in these tables.
Internal Revenue Service Memorandum
The Following Tables Are Provided by the IRS:
April 1, 2024 – September 30, 2024│ 59
Report of Employee Misconduct by Disposition Groups
Period Covering April 1, 2024, Through September 30, 2024
Employee Employee Tax TIGTA Report
Administrative
Disposition Character Compliance of Totals
Case
Investigation Case Investigation
ALTERNATIVE DISCIPLINE: 0 ND 6 0 6
IN LIEU OF REPRIMAND
ALTERNATIVE DISCIPLINE: 8 ND 12 5 25
IN LIEU OF SUSPENSION
ADMONISHMENT 95 5 298 18 416
CASE SUSPENDED PENDING EMPLOYEE ND ND 0 0 0
RETURN TO DUTY
CLEARANCE LETTER 38 ND 21 16 75
CLOSED - SUPPLEMENTAL REQUESTED ND ND ND ND ND
CLOSED WITHOUT ACTION 188 116 358 42 704
CAUTIONARY LETTER
CLOSED WITHOUT ACTION LETTER 90 44 55 31 220
FORWARDED TO TIGTA 89 ND ND ND 89
INDEFINITE SUSPENSION 0 ND ND 0 0
ORAL COUNSELING 37 ND 6 ND 43
PROBATION/SEPARATION 359 16 0 16 391
PROSECUTION PENDING FOR TIGTA’S
REPORT OF INVESTIGATION (ROI)
ND ND ND ND ND
REMOVAL AT U.S. OFFICE OF PERSONNEL ND 11 ND ND 11
MANAGEMENT DIRECTION
REMOVAL (PROBATION PERIOD
COMPLETE)
44 0 0 21 65
REPRIMAND 87 5 78 32 202
RESIGNATION, RETIREMENT, ETC. 20 0 8 11 39
(REASON NOTED ON SF50)
RESIGNATION, RETIREMENT, ETC. 104 16 30 26 176
(REASON NOT NOTED ON SF50)
SEPARATION OF TEMPORARY EMPLOYEE ND ND ND ND ND
SUSPENSION, 14 DAYS OR LESS 39 ND 42 21 102
SUSPENSION, MORE THAN 14 DAYS 5 ND 6 11 22
TERMINATION FOR ABANDONMENT 13 ND ND ND 13
OF POSITION
WRITTEN COUNSELING 161 66 396 32 655
TOTAL 1,377 279 1,316 282 3,254
Source: Automated Labor and Employee Relations Tracking System (ALERTS) (extract date: Oct. 1, 2024).
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. Columns containing no data are annotated with ND.
60│ April 1, 2024 – September 30, 2024
Report of Employee Misconduct National Summary
Period Covering April 1, 2024, Through September 30, 2024
Cases Closed
Cases
Inventory Open Conduct Non- Ending
Conduct Merged
Case Type Inventory Cases Conduct Inventory
Issues With Other
Received Issues
Cases
Administrative
652 1,968 1,663 100 12 845
Case
Employee
Character 200 325 347 20 ND 158
Investigation
Employee Tax
Compliance 1,598 1,394 1,399 69 ND 1,524
Case
TIGTA Report of
446 404 380 14 ND 456
Investigation
Total 2,896 4,091 3,789 203 12 2,983
Source: ALERTS (extract date: Oct. 1, 2024). 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. Columns
containing no data are annotated with ND.
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 identified by the Employee Tax Compliance program
and becomes a matter of official interest.
TIGTA Investigation - Any matter involving an employee in which TIGTA investigated alleged misconduct
and referred a Report of Investigation to the IRS for appropriate action.
April 1, 2024 – September 30, 2024│ 61
Summary of Substantiated I.R.C. Section 1203
Inquiries Recorded in ALERTS
Period Covering April 1, 2024, Through September 30, 2024
Removed In
Resigned/ Probation Penalty
§ 1203 Violation Removals on Other Personnel Total
Retired Separation Mitigated
Grounds Process
1203(b)(3): CIVIL ND ND ND ND ND 0 0
RIGHTS/CONSTRUCTIVE
VIOLATION
1203(b)(8): WILLFUL 0 ND ND 0 6 67 73
UNTIMELY RETURN
1203(b)(9): WILLFUL 0 ND 0 ND ND 26 26
UNDERSTATED TAX
Total 0 ND 0 0 6 93 99
Source: ALERTS (extract date: Oct. 1, 2024). 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. Columns
containing no data are annotated with ND.
Cases reported as “Removals” and “Penalty Mitigated” do not reflect the results of any
third-party appeal.
62│ April 1, 2024 – September 30, 2024
Appendix VI
Section 1203 Standards
In general, the IRS Commissioner shall terminate any IRS employee if there is a final
administrative or judicial determination that, in the performance of official duties, such
employee committed any misconduct violations outlined below. Such termination shall be a
removal for cause on charges of misconduct.
Misconduct violations include:
• Willfully failing to obtain the required approval signatures on documents authorizing the
seizure of a taxpayer’s home, personal belongings, or business assets;
• Providing a false statement under oath with respect to a material matter involving a
taxpayer or taxpayer representative;
• Violating, with respect to a taxpayer, taxpayer representative, or other employee of the IRS,
any right under the Constitution of the United States, or any civil right established under
Title VI or VII of the Civil Rights Act of 1964; Title IX of the Education Amendments of 1972;
Age Discrimination in Employment Act of 1967; Age Discrimination Act of 1975; Section
501 or 504 of the Rehabilitation Act of 1973; or Title I of the Americans With Disabilities
Act of 1990;
• Falsifying or destroying documents to conceal mistakes made by any employee with
respect to a matter involving a taxpayer or taxpayer representative;
• Committing assault or battery on a taxpayer, taxpayer representative, or another employee
of the IRS, but only if there is a criminal conviction or a final judgment by a court in a civil
case with respect to the assault or battery;
• Violating the I.R.C., the Treasury Department regulations, or policies of the IRS (including
the IRM) for the purpose of retaliating against or harassing a taxpayer, taxpayer
representative, or other employee of the IRS;
• Willfully misusing provisions of I.R.C. § 6103 for the purpose of concealing information
from a congressional inquiry;
• Willfully failing to file any return of tax required under the I.R.C. on or before the date
prescribed therefore (including any extensions), unless such failure is due to reasonable
cause and not to willful neglect;
• Willfully understating federal tax liability, unless such understatement is due to reasonable
cause and not to willful neglect; and
• Threatening to audit a taxpayer for the purpose of extracting personal gain or benefit.
The IRS Commissioner may mitigate the penalty of removal for the misconduct violations
outlined above. The exercise of this authority shall be at the sole discretion of the Commissioner
and may not be delegated to any other officer. The Commissioner may establish a procedure
that will be used to decide whether an individual should be referred to the Commissioner for
determination. Any mitigation determination by the Commissioner in these matters may not be
appealed in any administrative or judicial proceeding.
April 1, 2024 – September 30, 2024│ 63
Glossary
ALERTS Automated Labor and Employee Relations Tracking System
CARE Customer Assistance, Relationships and Education
CARES Act Coronavirus Aid, Relief, and Economic Security Act
CDP Collection Due Process
C.F.R. Code of Federal Regulations
CSP credential service providers
EIN Employer Identification Number
ERC Employee Retention Credit
FAR Federal Acquisition Regulation
FedRamp Federal Risk and Authorization Management Program
FOIA Freedom of Information Act
FTCP Fair Tax Collection Practices
FY Fiscal Year
IRA Inflation Reduction Act of 2022
I.R.C. Internal Revenue Code
IRS Internal Revenue Service
ITIN Individual Taxpayer Identification Number
ITPE Individual Rax Processing Engine
JAMES Joint Audit Management Enterprise System
LCU Lifting Up Communities (IRS initiative)
NFTL Notice of Federal Tax Liens
64│ April 1, 2024 – September 30, 2024
OCPO Office of the Chief Procurement Officer (IRS)
OI Office of Investigations
OMB Office of Management and Budget
ONDCP Office of National Drug Control Policy
PCA private collection agency
PPP Paycheck Protection Program
PRC People’s Republic of China
RRA IRS Restructuring and Reform Act of 1998
SOP Strategic Operating Plan (IRS)
TAS Taxpayer Advocate Service
TCI Toledo Correctional Institute
TPI Total Positive Income
TY Tax Year
TIGTA Treasury Inspector General for Tax Administration
U.S.C. United States Code
April 1, 2024 – September 30, 2024│ 65
TO REPORT WASTE, FRAUD, OR ABUSE:
CALL OUR TOLL-FREE HOTLINE
1-800-366-4484
BY WEB:
www.tigta.gov
BY FAX:
202-927-7002
OR WRITE:
Treasury Inspector General for Tax Administration
P.O. Box 23291
Washington, DC 20026
Information you provide is confidential. You may remain anonymous.
Department of the Treasury
Office of the Inspector General for Tax Administration
901 D Street, SW, Suite 600
Washington, DC 20024
This report and complete copies of TIGTA audit reports
are available online at: www.tigta.gov
File and source
- File
- REPORT_TIGTA_Semiannual-Report-to-Congress_sep2024.pdf
- Size
- 1,996,213 bytes
- SHA-256
- 9a3b4030bd008694766bd6059a4fff79fe3512b14c34c71c0e6bbab1e1a260fb
- Original
- www.tigta.gov