Guy Compares the IRS to Barnes & Noble
“The IRS destroying data for an estimated 30 million filers in March 2021 is appalling. This will create massive chaos for taxpayers in terms of filing time and refunds. The fact that the IRS is a business that operates in the dark ages in terms of technology further compounds the taxpayer’s burden. They act like […]
IRS Scammer Ordered to Pay $9 Million in Restitution For Being Scummiest of the Scamming Scumbags
Given that this is a website written for accounting professionals and not, say, confused grandmas who think Steam cards are a valid form of payment for debts to the U.S. government, we rarely cover the topic of IRS phone scams. We assume, perhaps naively, that y’all are smarter than that and don’t need reminding. The […]
TIGTA Reveals There Are Still Stupid People Falling for Fake IRS Phone Scams
Despite having warned taxpayers over and over that the IRS does not and will not call you and demand you wire over some cash, apparently some people are still falling for this. So much so that TIGTA felt compelled to send out a friendly reminder: The Treasury Inspector General for Taxpayer Administration (TIGTA) today issued […]
IRS Agents Pack Heat, Rarely Discharge
IRS agents have guns. By that I don't mean huge biceps.1 I mean the things Ted Nugent uses to shoot elk and open beers and unclog toilets. In 2008, when I was about to graduate with my B.S. in accounting, I attended the job fair at Utah Valley State College. No CPA firms were there […]
IRS’ Improved e-File System Is a Total Success Except For Two Jerks Who Foiled It
It's a project ten years in the making and in case you didn't get the memo, the Modernized e-File system officially replaced the Legacy e-File system this filing season. What does this mean? Hell if I know. I do know that every single electronic return went through the MeF this filing season, which means they […]
IRS Not Overly Concerned About Agents That Are a Little Clumsy with Their Sidearms
The latest treasure dug up by the Treasury Inspector General for Tax Administration: [Criminal Investigation's] firearms training and qualification requirements generally met or exceeded those of other Federal law enforcement agencies. However, TIGTA found that some CI special agents did not meet all firearms training and qualification requirements. Field office management did not always take […]
Audit Finds That IRS Small Business Division Not So Different From That Attractive Person at the Bar Who Seemed Really Interested in You
They say they'll call and meanwhile you sit by the phone like an IDIOT. TIGTA […] found that examiners are trained and monitored to ensure they provide accurate information to taxpayers, but they do not consistently return calls when requested by or promised to taxpayers. TIGTA identified 20 calls during which the taxpayer either requested […]
New IRS Employees Don’t Always Have Someone to Show Them the Ropes
As you know, the primary purpose of Treasury Inspector General for Tax Administration (aka TIGTA) in the enormous fuckshow of our federal bureaucracy is to tell the IRS how awful they are at life. Yep! If there's any chance of IRS the sucking at something, TIGTA has likely investigated and issued a report about it. E-filing isn't […]
IRS Whistleblower Gets the IRS Audited, IRS Does Not Find This To Be Entertainment
Indianapolis TV station WTHR is reporting IRS tax examiner Howard Antelis has apparently developed some concerns about the way his esteemed employer handles Individual Taxpayer Identification Numbers and, more importantly, what possible abuse and fraud mean for the Service's flawless record. "I'm horrified and ashamed and embarrassed by what I've seen. It's not supposed to […]
IRS Stopping $1.6 Billion in Mistaken Homebuyer Tax Credits Doesn’t Impress Everyone
The Service gets an 'A' for effort but also 'D' for "do more with less." The U.S. Internal Revenue Service rejected $1.6 billion in erroneous claims for the first-time homebuyer tax credit, according to a report by the Treasury Inspector General for Tax Administration. The refundable tax credit, worth as much as $8,000, was available to […]
Forty-three People Who Will Never Breathe Free Air Again Are Registered Tax Return Preparers
Also! Over 900 applicants had an incarceration date within the last 10 years received active or provisional PTINs and over 70% of those did not disclose their felony conviction. • 962 PTIN applicants on the IRS’s Prisoner File with an incarceration date within the last 10 years received active or provisional PTINs – 745 (77 […]
IRS: Get Off Our Backs About Following Up with Taxpayers That Suck at Math
The IRS’s naggy watchdog, the Treasury Insepector General of Tax Administration, has released a new audit that found the Service doesn’t follow up on math errors quickly enough and that they should start picking up their game, especially in the case of taxpayers who are trying to utilize the Earned Income Tax Credit. The IRS, who is normally looking to do things better, did not appreciate the sentiment:
[T]he IRS was cool to the report’s recommendations, asserting that it has limited resources and noting that it usually sends interim letters to taxpayers if their cases will not be handled within 30 days. The agency’s Richard Byrd also noted that the IRS receives some 20 million paper letters each year. “While important, replies to math errors represent a small fraction of our overall inventory,” Byrd wrote.
Seriously. They’ve got an over-eager AICPA to deal with.
[via OTM/The Hill]
The TaxMasters Guy Has Some Sage Advice on IRS Correspondence Audits
The advice was so good he had to send out a press release:
On the heels of a record reporting year for taxes, taxpayers should be wary – or at a minimum more informed – about audits from the IRS, according to Patrick Cox, CEO of TaxMasters (TAXS), the leading tax compliance and repayment services provider in the nation. According to Cox, the IRS will send out a record number of audits which can be misleading and even wrong.
“Over the past few years the IRS has been shifting gears to use correspondence audits – notices mailed to taxpayers usually showing an alleged discrepancy in a tax filing and asking for a manageable amount of extra money that is owed,” Cox said. “From my experience, most taxpayers – who did their taxes online or had an accountant or friend do them – are scared of the IRS and don’t know enough about their tax filings to argue the audit. Instead of making sure the IRS assessment is accurate, I think most taxpayers just cut a check.”
The latest Taxpayer Advocate Report showed that of the more than 1.6 million Americans who were audited last year, 78 percent received a correspondence audit, while only 22 percent were selected for an in-person examination. A large majority of the correspondence audits are sent due to unqualified or overstated tax deductions.
“Returns claiming tax deductions are the lowest hanging fruit for the IRS in a correspondence audit,” says Cox. “Unfortunately, there are an alarming number of taxpayers that make simple mistakes on the amount of deductions and types of deductions they make and wind up being easy targets for the IRS. A few examples of typically-encountered discrepancies include unreported pension income, home mortgage interest, and cash charitable contributions.”
Conveniently, the Journal of Accountancy also covered the increase in IRS correspondence audits in its August 2011 issue and offers tips on how to manage them for CPA tax practioners.
According to a 2006 report by the Treasury Inspector General for Tax Administration (TIGTA), there has been a 170% increase in correspondence examinations for individual taxpayers with gross incomes or business receipts of at least $100,000 in fiscal years 2002 through 2005, while face-to-face examinations increased by 25%. Since that report, TIGTA has claimed improvements in this area but identifies work yet to be done.
IRS Database Security Could Use a Tuneup
Some of the 2,200 databases that the IRS uses to manage and process taxpayer data are not configured securely, are running out-of-date software, and no longer receive security patches.
Nor has the IRS fully implemented its plans to complete vulnerability scans of its databases — although the IRS spent more than $1.1 million in software licenses and support costs for a database vulnerability scanning and compliance assessment tool, it did not fully implement it. TIGTA used database vulnerability assessment software to conduct remote scans of the primary databases for 13 applications supporting critical tax administration business processes. Its review found high and medium risk vulnerabilities, as classified by the scanning tool in each of the 13 databases. [TIGTA via TaxProf]
TIGTA Scolds IRS for Name-calling…Again
The office of the Treasury Inspector General for Tax Administration has released a report showing that IRS employees continue to use now prohibited language like “tax protester” and (our personal favorite) “Constitutionally-challenged” in reference to non-compliant taxpayers, despite being barred from doing so since 1998.
Congress enacted the Internal Revenue Service Restructuring and Reform Act of 1998 (RRA 98) Section 3707 to prohibit the IRS from labeling taxpayers as “Illegal Tax Protesters” or any similar designations. However, IRS employees continue to refer to taxpayers by these designations in case narratives. Using “Illegal Tax Protester” or other similar designations may stigmatize taxpayers and may cause employee bias in future contacts with these taxpayers.
Prior to enactment of the RRA 98, the IRS used the Illegal Tax Protester Program to identify individuals and businesses that were using methods that were not legally valid to protest the tax laws. Employees identified taxpayers for referral to the program when their tax returns or correspondence contained specific indicators of noncompliance with the tax law, such as the use of arguments that had been repeatedly rejected by the courts. There were tax protester coordinators who were responsible for determining whether a taxpayer should be included in the Illegal Tax Protester Program; if a taxpayer was classified as an Illegal Tax Protester, the taxpayer’s record was coded as such on the Master File. Once a taxpayer’s account was coded, certain tax enforcement actions were accelerated. The designation was also intended to alert employees to be cautious so they would not be drawn into confrontations with taxpayers.
The IRS has not reintroduced past Illegal Tax Protester codes or similar designations on taxpayer accounts. In addition, the Internal Revenue Manual no longer contains any Illegal Tax Protester references. However, TIGTA found that out of approximately 3.6 million records and cases, there were 38 instances in which 34 employees had referred to taxpayers as “Tax Protester,” “Constitutionally Challenged,” or other similar designations in case narratives on the computer systems analyzed.
The TIGTA made no recommendations after their report, as the IRS has continued to use the term “tax protester” in taxpayer case files when it sees fit, despite the fact that the TIGTA feels this is not in compliance with RRA 98 § 3707 for obvious reasons.
It appears they do this once a year:
The TIGTA Would Prefer It if the IRS Could Use a Nicer Term Than “Tax Protester”
Report: IRS Is Better at Junking Computers From Previous Decades
It appears that the IRS prompted this report from the Treasury Inspector General of Tax Administration after a previous report stated that improvements were needed in the replacing the Service’s dinosaur technology.
Employees have to be pleased that can now obtain better equipment to do their jobs, although three years to determine how to point out an Apple II or an IBM running DOS does seem like a long time.
The Internal Revenue Service (IRS) has significantly improved its ability to identify and replace aging computers, according to a report publicly released today by the Treasury Inspector General for Tax Administration (TIGTA).
The IRS purchases new computers to replace aging equipment through its Sustaining Infrastructure Program. A November 2007 TIGTA report recommended several improvements to the IRS’s processes for replacing computer hardware that has reached or surpassed its useful life. TIGTA conducted the review at the IRS’s request.
TIGTA’s new report found that the IRS has implemented a process for identifying, reviewing, prioritizing, and making decisions on funding the replacement of aged computer hardware and is developing the capability to associate information technology problems with the aged hardware that caused the problem. The improved capability could result in as much as $12.3 million in cost savings and $16.4 million in revenue collection increases, according to the report.
“Taxpayers and IRS employees rely heavily on the information technology infrastructure to ensure satisfaction of tax liabilities, quick resolution of issues, and the security of confidential taxpayer information,” said J. Russell George, the Treasury Inspector General for Tax Administration. “The IRS is to be commended for these improvements,” he added.
Making Work Pay Tax Credit May Make Taxpayers Pay
Filed under: ironic press releases from the Treasury that we love to get.
News from our favorite federal taxation authority this morning reveals that while the IRS believes they did everything they were supposed to, some taxpayers may have taken their Making Work Pay credits incorrectly, causing them to actually owe money instead of celebrating free money. Oops! The Treasury Inspector General did their best to warn everyone this could happen and, oh look, it did.
Overall, the Internal Revenue Service (IRS) implemented the Making Work Pay Credit as intended by Congress, according to a report publicly released today by the Treasury Inspector General for Tax Administration (TIGTA).
However, the report also found that approximately 13.4 million taxpayers who received the credit may owe taxes because adjustments to the withholding tables did not take into consideration all taxpayer circumstances. For example, single taxpayers with more than one job, joint filers where both spouses work or one or both of them have more than one job, taxpayers who receive pension payments, and Social Security recipients who receive wages are among those who may be negatively affected.
The Making Work Pay credit is an economic stimulus provision of the American Recovery and Reinvestment Act of 2009 (Recovery Act). The credit is advanced to taxpayers by their employers through withholding reductions which results in an increase in taxpayers’ take home pay. The credit is effective for Tax Years 2009 and 2010.
“The Making Work Pay Credit is a key tax credit designed to increase spending and stimulate the economy,” said J. Russell George, the Treasury Inspector General for Tax Administration. “However, many taxpayers who are accustomed to receiving refunds when they file their tax returns may have owed taxes and incurred penalties in 2009 and may yet again in 2010 because they were advanced more of the credit than they were entitled to claim,” Mr. George added. “My office issued a report in November 2009 warning of this possibility and encouraging the IRS to increase outreach and waive penalties for taxpayers who may be negatively affected by the credit. We still believe further actions are needed to ensure no taxpayer is unfairly penalized.”
The November 2009 report warning this could go down mentions that some taxpayers were proactive and adjusted their withholding so as not to be impacted by the potential “free money” presented by this “credit” which, for some taxpayers, will turn into money owed back to the Treasury or even tax penalties.
The credit was advanced to taxpayers by their employers through withholding reductions that result in an increase in take home pay, in the hopes that $400 ($800 for joint filers) more in each eligible taxpayer pocket might help increase spending and stimulate the economy. Because of the nature of the credit, however, some taxpayers may have had their taxes underwithheld at the end of the year.
Intended to stimulate whose economy?
The IRS May Want to Stock Up on Shotguns
The IRS is not the most popular government agency. This is not news. What is a developing problem is more and more people feel that reacting to the Service through with violence is somehow an acceptable option. Can we expect another lunatic to fly a plane into a building? Hard to say. But Joe Kristan did warn us about this.
And now the Treasury Inspector General has informed Tim Geithner that this will be one of the “challenges” the Service can expect in the new year:
In addition to safeguarding a vast amount of sensitive financial and personal data, the IRS must also protect approximately 100,000 employees and more than 700 facilities throughout the country. Attacks and threats against IRS employees and facilities have risen steadily in recent years.
The February 2010 attack on an IRS facility in Austin, Texas, is a stark reminder of the dangers that IRS employees face every day in trying to perform their jobs. Animosity towards the tax collection process is nothing new, but the Austin incident and other recent events point to a surge of hostility towards the Federal Government. According to the Anti-Defamation League, the militia movement has almost quadrupled in size in the past two years, growing to more than 200 groups across the country. The Southern Poverty Law Center has reported that anti-government and hate groups have grown from 149 groups in 2008 to 512 groups in 2009, a 244 percent increase. The ongoing public debate regarding the recently enacted health care legislation may also lead to increased threats against IRS employees and facilities, underscoring the need for continuing vigilance in the area of physical security.
It’s good to know that our country is filled with so many level-headed folks that creating hate groups has become a relatively popular thing to do.
Vast Improvement in Volunteer-prepared Tax Returns Proves That the TIGTA’s Nagging Pays Off
Last year the Treasury Inspector General for Tax Administration came down pretty hard on volunteer tax preparers, noting that 41% of the returns contained errors. As is the IG’s wont, they scolded the IRS to improve this shameless display by volunteers and made some suggestions to help them suck less.
And it worked! Ninety percent of the tax returns prepared by volunteers were accurate thus earning praise from the IG:
Ninety percent of the 39 tax returns volunteers prepared for TIGTA auditors were prepared correctly, a sharp increase from the 59 percent accuracy rate reported by TIGTA in its 2009 review. TIGTA attributed the improvement to an increase in volunteers’ use of the IRS’s Intake/Interview and Quality Review Sheet (Form 13614-C), improved training, and enhanced oversight. Only 5 percent of the 39 tax returns were prepared without use of the Form 13164-C, versus 33 percent in TIGTA’s 2008 Filing Season review, and 22 percent in its 2009 Filing Season review.
“This report is a positive indication of the good work that the IRS is doing for America’s taxpayers,” stated J. Russell George, the Treasury Inspector General for Tax Administration. “I commend the IRS on the progress it has made in helping volunteers accurately fulfill the very important task they assumed.”
This isn’t the first time that the TIGTA has managed to give the IRS credit for doing a decent job. Last month J. Russell George managed to give tepid kudos to the Service for providing satisfactory service at assistance centers but also reminded everyone that a mind-numbingly complex government bureaucracy can always get better. They’re blowing off the deaf and mute, after all.
Rest Easy: The IRS Is Preparing for IFRS
For the first times since we started paying attention, the TIGTA is simply putting everyone on notice that the IRS is on top of this IFRS thing. No “You suck at this IRS” or “Here’s a list of things you should considering doing if you are interested in not sucking any more, IRS.” Simply, “Here’s what they’re doing. Have a nice day.”
The IRS began developing plans for strategic and operational activities related to the adoption of the IFRS in 2009.
TIGTA found that the IRS: is training employees about IFRS concepts and potential issues; working with the tax preparer community to identify and outline IFRS implementation concerns; and developing procedures to address issues related to IFRS conversion efforts.
“The IRS is appropriately laying the groundwork for its increased oversight of international taxation by gaining an understanding of the International Financial Reporting Standards,” said J. Russell George, the Treasury Inspector General for Tax Administration.
TIGTA did not make any recommendations in this audit and the IRS did not provide any comments on a draft of the report.
Doesn’t quite feel right, does it?
The IRS Is Taking Action to Address the Impact That International Financial Reporting Standards Will Have on Tax Administration [TIGTA]
TIGTA Concerned That IRS Is Blowing Off Deaf, Mutes (and Presumably Deaf-Mutes)
The IRS sucks at a lot of things. Given.
Thankfully we have Treasury Inspector General of Tax Administration to inform us about said
failures opportunities for improvement.
But today’s news that the IRS isn’t doing enough to help our hearing and speech-impaired friends is especially disheartening to the TIGTA overlords. They can (somewhat) understand providing crappy service to regular Americans (try reading the instructions people) but if you’re unfortunate enough to be without speech or hearing, the IG felt obligated to point out the IRS’s shortcomings:
TIGTA performed an audit to evaluate both the IRS’s customer service toll-free telephone access during the 2010 Filing Season and the access and service it provided to hearing and speech-impaired taxpayers. TIGTA found that the IRS exceeded its overall performance measurement goals by 2.3 percent. However, the Level of Service for the TTY/TDD toll-free telephone line for the 2010 Filing Season was just 8.8 percent, meaning that only 8.8 percent of calls placed using the TTY/TTD successfully reached an IRS assistor. The total dialed attempts for the TTY/TDD product line during the 2010 Filing Season were more than 350,000; however, IRS assistors answered only 339 of those calls.
“Our report found that far too few hearing and speech-impaired taxpayers successfully reached an IRS assistor,” said J. Russell George, the Treasury Inspector General for Tax Administration. “The IRS must do a better job of ensuring that all Americans have equal access to its services,” he said.
Actually, that is pretty shitty service. Even by IRS standards.
The IRS Could Improve Toll-Free Telephone Assistance For Hearing and Speech-Impaired Taxpayers [TIGTA]
The IRS Isn’t Interested in Delaying the Issuance of Potentially Bogus Refund Checks
The Treasury Inspector General of Tax Administration sole purpose is giving the IRS shit about anything and everything under the sun. This is known.
We here at Going Concern have a tendency to find the more ridiculous feedback that IG digs up and share it with you. Today however, the TIGTA might be on to something:
WASHINGTON- The Internal Revenue Service (IRS) should make better use of the third-party data it receives from employers, government agencies and financial institutions to reduce erroneous refunds, increase revenues and promote voluntary compliance, according to a new audit report publicly released today by the Treasury Inspector General for Tax Administration (TIGTA).
TIGTA found that the IRS:
• Could make better use of available third-party data to identify and prevent more than $1 billion in potentially erroneous refunds;
• Does not have a centralized control point for third-party data requested or received from outside sources; and,
• Lacks a standardized procedure for validating data.
• The report also found that additional validation of taxpayer information using third-party data is needed to validate claims for the Earned Income Tax Credit (EITC) and other credits.
“These problems allow a substantial number of erroneous refunds and credits to be granted that are not allowable by law,” said J. Russell George, the Treasury Inspector General for Tax Administration. “For example, I am troubled that we found a lack of adequate corrective action by the IRS to address improper claims in the EITC Program, which is particularly vulnerable to fraud.”
TIGTA recommended that the IRS freeze refunds for those taxpayers with potentially invalid EITC claims, require valid responses before allowing the EITC claims, and adjust the returns if taxpayers do not respond within a specific time period.
The IRS disagreed with TIGTA’s recommendations to freeze potentially invalid refunds and to create a centralized control point for all third-party data.
Apparently the IRS can’t handle the flood of angry calls from washed up models, degenerate gamblers and dead people demanding their refunds RFN.
Full Report [TIGTA]
TIGTA: IRS Refuses to Stop Issuing $1 Billion in Erroneous Refund Checks [TaxProf Blog]
The TIGTA Manages to Give the IRS Credit for Doing a Decent Job at Taxpayer Assistance Centers
The most nagtastic wing of the Federal Bureaucracy, the Treasury Inspector General of Tax Administration, gave an extremely tepid thumbs-up to the IRS today for satisfying the needs of taxpayers using services at Taxpayer Assistance Centers (“TAC”).
If you look at the TIGTA’s report, you’ll find a fairly neutral title, “Surveys of Taxpayers With Tax Account Issues Indicate They Are Satisfied With the Service They Received at Taxpayer Assistance Centers.”
However, if you read the title of the press release you’ll find things take considerably less enthused turn, “TIGTA Survey Finds Taxpayers Generally Satisfied With Level Of Service Received At Taxpayer Assistance Centers.”
Why the unnecessary adverb TIGTA? If you remove the ‘generally’ the title remains informative, so may we ask what the unspoken element is here? Are you insinuating that the IRS sucks at everything else it does and this particular survey just happens to stray from the narrative?
Hell, even Inspector General/Head IRS nag, J. Russell George, was caught off guard and offered the following “what have you done lately,” statement, “The IRS should continuously ensure it is providing the best available service to all taxpayers, including those with tax account issues who visit their Taxpayer Assistance Centers, and find cost-effective ways to do so.”
When asked, “Overall, I was satisfied with the customer service I received from the IRS during my visit to the IRS walk-in office,” 75% of those surveyed responded “Strongly Agree.” If you can get 3 out of 4 people to say that their experience with the IRS was positive rather than “I was giving strong consideration to strangling one of the employees with my shoelace,” you best recognize a job well done.
TIGTA Survey Finds Taxpayers Generally Satisfied With Level Of Service Received At Taxpayer Assistance Centers [TIGTA]
The TIGTA Would Prefer It if the IRS Could Use a Nicer Term Than “Tax Protester”
Back in 1998 when some of you were just starting your careers, some of you were discovering alcohol and some of you still hadn’t hit puberty, Congress enacted the Internal Revenue Service Restructuring and Reform Act of 1998 (RRA 98). In Section 3707 of this piece of legislative ingenuity, the IRS is prohibited from using the term “illegal tax protesters or any similar designations.”
Why no name calling? The TIGTA claims it “may stigmatize taxpayers and may cause employee bias in future contacts with these taxpayers.” Plus, it really hurst people’s feelings.
This latest edition of government-mandated IRS bashing especially seems like a stretch since this “problem” of calling a spade a spade isn’t that widespread:
We found that, out of approximately 80.6 million records and cases, there were 196 instances in which employees had labeled taxpayers as “Tax Protester,” “Constitutionally Challenged,” or other similar designations in case narratives on the following computer systems during the period of October 2008 through September 2009[.]
For starters, “Constitutionally Challenged” sounds like something you might apply to a Tea Party member. Secondly, you can do the math on the 196 instances out of 80-odd million but the concern on the part of the Inspector General might be overblown.
Luckily for us citizens, we can throw around any term we want with reckless abandon and there’s no repercussions. That being said, the TIGTA didn’t make any recommendations to the IRS on how to curb the usage of axtay rotestorpay and the IRS didn’t buy the Inspector’s story that the 196 instances were, in fact, violations. So, if you’ve come to the conclusion that this TIGTA report was the biggest waste of time and tax dollars in the history of the Treasury Department, you probably wouldn’t be far off.
It’s Possible That the IRS Is Partly to Blame for Postal Workers Going Postal
Our favorite corner of the Federal bureaucracy, the Treasury Inspector General for Tax Administration, has come out with a new report today that admits that the IRS current method of sending notices and letters is costing us – taxpayers – millions because so much of it is undeliverable. This happens for various reasons, including nearly 25% of instances where recipients may or may not have physically threatened their mail carrier.
Press release (our emphasis):
TIGTA Report: Current Practices Are Preventing a Reduction in the Volume of Undeliverable Mail
The Internal Revenue Service’s (IRS) current method of sending notices and letters is costing taxpayers millions of dollars because it results in a large amount of undeliverable mail, according to a report publicly released today by the Treasury Office of the Treasury Inspector General for Tax Administration (TIGTA).
The IRS sends out approximately 200 million notices and letters each year to individual and business taxpayers and their representatives at a cost of $141 million. In 2009, approximately 19.3 million of those mailings were returned to the IRS at an estimated cost of $57.9 million.
TIGTA assessed whether the IRS can reduce the volume of undeliverable mail. Its review of a random sample of 331 notices and letters returned to the IRS found that 37 percent were undeliverable because of invalid or nonexistent addresses; 35 percent had the wrong address; 24 percent were refused by the taxpayer or the taxpayer was not at home to receive the certified or registered mail; and four percent were returned for other reasons.
TIGTA recommended that the IRS allow taxpayers to submit a change of address over the telephone and improve its systems for identifying known bad addresses. TIGTA also recommended implementing a standardized procedure for processing undeliverable mail.
“The Internal Revenue Service needs to take advantage of the latest technologies and systems now available to cut down on undeliverable mail, thereby saving the taxpayers money,” said J. Russell George, the Treasury Inspector General for Tax Administration.
In response, the IRS agreed with all of TIGTA’s recommendations and has begun the process of planning to implement them.
So, in other words, the IRS is partly responsible for several instances of the following:
The IRS Is Sitting on Your Checks
We haven’t come across a single person that is happy about cutting a check to the United States Treasury. In fact, some people would like their CPAs to stick their beard trimmings in with checks and include a note that says, “Here’s my money. Shove it. Oh, and enjoy the scruff.”
You would think that – after washing their hands for 20 minutes – someone at IRS would rip open your letter to find your check and drop everything to make the deposit. “Thank God! Everybody! We’ve got the Johnson check! I’ve got to get to the bank ASAP to make sure we can cover our glorious new pens.”
But this is not the case. No, the IRS doesn’t have a sense of urgency that you might have when you get a check in the mail. The Service’s resident mother-in-law, the TIGTA let’s us know how about their latest disappointment:
TIGTA found that the IRS is generally scanning checks and accurately posting checks to taxpayer accounts. However only 13 percent of the 770,504 payments reviewed by TIGTA payments were deposited the next business day through the Treasury Department’s Financial Management Service. As a result, the IRS lost $695,115 in interest on the payments that were not promptly processed. TIGTA found that the IRS is generally scanning checks and accurately posting checks to taxpayer accounts. However only 13 percent of the 770,504 payments reviewed by TIGTA payments were deposited the next business day through the Treasury Department’s Financial Management Service. As a result, the IRS lost $695,115 in interest on the payments that were not promptly processed.
And that’s your interest, American Taxpayers, sayeth J. Russell George, “When payments are not promptly processed, taxpayers lose the benefit of the interest earned that is credited to the Department of the Treasury.”
The TIGTA obviously understands that it was painful for you to cut that check in the first place, so the quicker it gets cashed, the sooner you will be doing your part – earning interest for every man, woman and child in this great land.
Plus, the sooner the money is out of your account, the less likely you’ll be to continue stewing about the unfairness of it all, only to conclude that quitting your job to attend rallies or participating in virtual marches may be the only way to help you to feel better.
The IRS Needs to Process Paper Checks More Quickly, TIGTA Finds [TIGTA PR]
Full Report [TIGTA]
On Top of Everything Else, the IRS Isn’t Green Enough
The IRS’ nagging mother-in-law, the Treasury Inspector General for Tax Administration (“TIGTA”) has once again managed to come down on the Service for something else it doesn’t do well – conserve energy.
According to TIGTA’s report, the IRS is implementing environmental management systems at 11 facilities, which will increase operating efficiency, improve environmental performance and reduce environmental impacts.
TIGTA also identified several steps the IRS should take to improve energy efficiency in its data centers, including eliminating gaps between computer room floor tiles that allow hot and cold air to mix, spacing servers in rows to maximize the efficiency of air conditioning, and using occupancy sensors to control lights in computer rooms.
The IRS does not have policies and procedures for improving energy efficiency in its data centers or for implementing data-center energy-efficiency best practices, TIGTA found. This affects the IRS’s ability to minimize energy consumption and costs, resulting in the inefficient use of resources and taxpayer funds.
“It is imperative that the IRS become more energy efficient to save taxpayer dollars and reduce the nation’s consumption of oil, coal, and other natural resources,” said J. Russell George, the Treasury Inspector General for Tax Administration.
The details of the improvements that are quite impressive – gaps in the floor tiles; spacing of servers, etc. Impressive in the sense that if your performance coach/manager was giving you those kinds of suggestions for performance improvement, you’d give them an eyeroll that would cause you to fall backwards in your chair.
Despite the endless stream of criticism, Chief Nag, J. Russell George managed to stop short of asking the IRS to help BP get all that oil out of the Gulf of Mexico.
TIGTA: IRS Can Improve Energy Efficiency at Data Centers [TIGTA PR]
Full Report [TIGTA]
The TIGTA’s Nagging of the IRS Delves into Phone Etiquette
In case you’re not up to speed on the federal bureaucracy org chart, the Treasury Inspector General for Tax Administration’s expressed purpose is to tell the IRS what it is they suck at doing and what they can do to quit sucking at it.
The latest bad report card for the IRS is that of protecting the identity of taxpayers who call the Service for help. The epic fail is due to customer reps not being inquisitive enough when identifying callers and not their inability to use their inside voices. The TIGTA presents its displeasure with the phone “assistors” in its latest report:
From our statistical sample of 180 contact recordings, we determined that assistors did not properly follow procedures when authenticating 29 (16 percent) callers, increasing the risk of unauthorized disclosures. Based on these results, the projected number of callers with increased risk of unauthorized disclosures is 44,067 for 1 week.
So, you figure 2.2 million unauthorized disclosures a year. Maybe that’s a legitimate concern but in the grand scheme of things, is it really that bad? If you consider the fact that 22.4 million people aren’t even getting help, that seems like a pretty good number. Regardless of our realistic standards, the TIGTA has more harping to do:
During our review of 48 (27 percent) of the 180 sampled calls, we were able to overhear other assistors discussing other callers’ Personally Identifiable Information. For 10 calls (6 percent), we were able to clearly hear parts of conversations with other callers. For 38 calls (21 percent), other assistors’ interactions with callers were overheard, but we could not clearly understand the conversations. This happened because assistors did not put callers on hold when they were researching the taxpayers’ accounts. Also, the physical layout of employee workstations at call centers allows other conversations to be easily overheard.
So in this particular case it sounds like the IRS has two choices 1) force everybody to become low talkers or 2) spring for a larger cube farm so people aren’t up in each other’s shit.
The real question her is, can we realistically expect an error rate of zero from the IRS? When did “good enough for government work” no longer apply?
Telephone Authentication Practices Need Improvements to Better Prevent Unauthorized Disclosures [TIGTA via TaxProf]
IRS Checks Sole Proprietorships Off Its “To Audit” List
This morning we shared some best practices on how to keep your ass out of hot water should an IRS audit befall you. The concern is that the government spending is out of control, huge deficits yada yada yada, the IRS will be knocking on more doors.
For the most part, everyone has been covered – large corporations, millionaires, possibly temptresses, the list is thorough.
Well, now it appears that the last entity type standing, the sole proprietorship will join the rest as an IRS target. IRS-criticizer-in-chief J. Russell George’s TIGTA issued another report but this time it cites sole proprietorships for “$68 billion of the $345 billion tax gap in 2001,” in underreported income. Web CPA reports George’s thoughts:
“Sole proprietors who underreport their income can create an unfair burden on honest taxpayers and diminish the public’s respect for the tax system,” said TIGTA Inspector General J. Russell George in a statement. “It is imperative that the IRS institutes policies to address this problem.”
How’s this for addressing a problem? The Internal Revenue Code, you my have heard, is mind-numbingly complex. Sole proprietorships, out of all the entity structures, are the least equipped to ensure compliance with the tax law. Auditing more of them will not result in increased compliance but rather enormous costs to their businesses. As for “diminish the public’s respect for the tax system,” didn’t that ship sail ages ago?
After Coasting Through Tax Season, Some IRS Revenue Officers May Have to Start Doing Actual Work
While we’re typically not ones to speculate on the difficulty of any particular job (e.g. CEO of a Big 4 firm) the Treasury Inspector General for Tax Administration (“TIGTA”) probably has the easiest job on Earth.
As far as we can tell, the TIGTA is responsible for criticizing the IRS on, well, pretty much everything that the Service does wrong and then the IRS agrees that they suck and promises to do better.
And if you’re going by the TIGTA website we’re more or less correct:
“TIGTA promotes the economy, efficiency, and effectiveness in the administration of the internal revenue laws. It is also committed to the prevention and detection of fraud, waste, and abuse within the IRS and related entities.”
We’re assuming that Doug Shulman probably agree with our assessment but that guy doesn’t even like pizza, so who cares what he thinks?
Anyhoo, the latest Monday Morning QBing from the TIGTA is that some of the Service’s senior revenue officers are basically sitting around with nothing to do. Web CPA reports:
Senior revenue officers at the Internal Revenue Service who are supposed to handle more complicated tax cases oftentimes don’t receive any work assignments, according to a new government report…
The relative lack of work for the senior revenue officers to do occurred because there is no systemic means for IRS managers to identify the most complex cases, and the criteria for identifying complex cases are subjective and inconsistently interpreted.
So you’re a senior revenue officer with 5-6 years (?) on the job. You’ve got this gig pretty much figured out. Not only do you know the ropes, you make the fucking ropes. Your manager has suits from DC so far up their ass about collecting every dime available that they can’t see straight, so they just want you busy do anything.
You, being a reasonably lazy (and realistic) person, aren’t going to kill yourself. If you’ve got the choice of picking up a 1040 that’s hundreds of pages long versus a 1040EZ that has fewer pages that a Tony Alamo pamphlet, you’re going to pick up the 1040EZ.
Well now J. Russell George is slapping those managers around with a report deeming this unacceptable which may mean that your slacking days are over:
“I am troubled that IRS managers are not providing employees with work assignments that they are ready and able to do at a time when it is incumbent on the IRS to be as efficient and effective as possible,” said TIGTA Inspector General J. Russell George in a statement.
JRG is recommending that the IRS improve it’s methods of identifying more complex cases (that the IRS naturally agreed with). We think a tax return thickness analysis is a decent place to start.
The IRS Is Taking Your Personal Information Seriously, Starting NOW.
Sometimes we wonder if the Treasury Inspector General for Tax Administration (TIGTA) ever gets tired of telling the IRS that they are doing a lousy job at pretty much everything.
The latest finger wagging from the TIGTA in the Services’ direction has to do with following protocols for processing taxpayer requests for tax returns or transcripts:
Forty-three percent of taxpayer requests for copies of tax returns or transcripts were processed incorrectly or not in accordance with IRS guidelines…
The errors occurred because IRS employees did not always follow guidelines, or because the guidelines were unclear, inconsistent or insufficient in protecting taxpayer information. Existing guidelines allow IRS employees to process taxpayer requests for tax returns or transcripts without an accurate or complete Social Security number and to send copies of returns and transcripts to an address other than that provided to the IRS on tax returns.
Jesus, that’s reassuring. Naturally, the TIGTA is concerned about the American Taxpayer:
“Taxpayers have a right to expect that the IRS will take every measure to protect their tax return information from inappropriate disclosure,” said TIGTA Inspector General J. Russell George in a statement. “The protection of personally identifiable information is a responsibility that the IRS must take more seriously.”
First: judging by the IRS’ track record, they really don’t take anything too seriously, except, perhaps, anything to do with UBS.
Second: Taxpayers have rights? Since when? We’ve been bailing out banks and car companies and you’re concerned about our right to have our tax return information protected? That’s rich. We’ve all been violated to the point of numbness, J. Russell George. Next time, we’d prefer if you said, “The American Taxpayer can expect more of less from the IRS for the foreseeable future. We are in a constant quagmire over here. Please bear with us.”
Honesty. Consider it.
Tax Return Transcripts Expose Personal Information [Web CPA]