Compliance With Statutory Requirements for the Disclosure of
Collection Information to Joint Filers Cannot Be Determined
August 2002
Reference Number:
2002-40-159
This report has cleared the Treasury
Inspector General for Tax Administration disclosure review process and
information determined to be restricted from public release has been redacted
from this document.
August
21, 2002
MEMORANDUM FOR
COMMISSIONER ROSSOTTI
FROM: Pamela J. Gardiner /s/ Pamela J. Gardiner
Deputy Inspector General for
Audit
SUBJECT: Final Audit Report - Compliance With
Statutory Requirements for the Disclosure of Collection Information to Joint
Filers Cannot Be Determined (Audit # 200240015)
This
report presents the results of our review to determine if the Internal Revenue
Service (IRS) is in compliance with 26 U.S.C. § 6103(e)(8) (Supp. IV 1998)
concerning the disclosure of collection information to joint filers.
Summary
The
Treasury Inspector General for Tax Administration (TIGTA) could not determine
if the IRS fully complied with 26 U.S.C. § 6103(e)(8) requirements for
responding to written information requests from joint filers. This is the fourth year in which the TIGTA
has reported its inability to give an opinion on the IRS’ compliance with the
provisions of 26 U.S.C. § 6103(e)(8).
The
TIGTA is required under 26 U.S.C. § 7803(d)(1)(B) (Supp. IV 1998) to annually
evaluate the IRS’ compliance with the joint filer request provisions of the
law. IRS management information systems
do not separately record or monitor joint filer requests, and the Congress has
not explicitly required the IRS to do so.
Furthermore, the TIGTA does not recommend the creation of a separate
tracking system. Accordingly, we are
not making any formal recommendations in this report.
Please contact
me at (202) 622-6510 if you have questions or Michael R. Phillips, Assistant
Inspector General for Audit (Wage and Investment Income Programs),
at (202) 927-0597.
Appendix I – Detailed Objective, Scope, and Methodology
Appendix II – Major Contributors to This Report
Appendix III – Report Distribution List
Appendix IV – Management’s Response to the Draft Report
The Taxpayer Bill of Rights 2 (TBOR2) added 26 U.S.C. § 6103(e)(8), which gives joint filer taxpayers who are no longer married or no longer reside in the same household the right to receive information regarding the Internal Revenue Service’s (IRS) efforts to collect delinquent taxes on their joint return liabilities. The procedures in 26 U.S.C. § 6103(e)(8) require that the IRS provide, in writing, collection activity information to joint filers if they send in a written request. After passage of the TBOR2, the IRS Disclosure Office issued procedures which stated that if 26 U.S.C. § 6103(e)(8) is not specifically cited in the request, the IRS can provide either an oral or written response, based upon 26 U.S.C. § 6103(e)(7).
The IRS Restructuring and Reform Act of 1998
(RRA 98) added 26 U.S.C. § 7803(d)(1)(B) (Supp. IV 1998), which requires the
Treasury Inspector General for Tax Administration (TIGTA) to review and certify
annually whether the IRS is complying with the requirements of 26 U.S.C. §
6103(e)(8).
The RRA 98 required both the Department of
the Treasury and the Joint Committee on Taxation (JCT) to complete separate
studies of the scope and use of provisions regarding taxpayer
confidentiality. The JCT issued its
study report in January 2000 and recommended 26 U.S.C. § 6103(e)(8) be amended
to allow for both oral and written information requests from joint filers. The Department of the Treasury issued its
study report in October 2000 with a similar recommendation to eliminate the
requirement that joint filer information requests be in writing. The Department of the Treasury’s report also
suggested that the TIGTA’s reporting requirement regarding joint filer requests
be phased out.
In response to a recommendation in the
TIGTA’s Fiscal Year 1999 audit report, the IRS agreed to perform separate
analyses by January 2001 in the former National Headquarters Collection and
Customer Service functions to determine the volume of written joint filer
requests received. IRS management
stated that they would use the outcome of these analyses to determine if a
centralized management control process was warranted to track joint filer requests.
Due to the low volume of requests identified
during the Collection study, the former National Headquarters Customer Service
function did not perform its analysis.
In May 2001, management in the Small Business/Self-Employed and Wage and
Investment Divisions decided not to develop a new management control process to
track joint filer information requests.
We performed our review in the IRS National Headquarters, the Small Business/Self-Employed and Wage and Investment Divisions, and the Office of the National Taxpayer Advocate during the months of April and May 2002. This audit was performed in accordance with Government Auditing Standards. Detailed information on the audit objective, scope, and methodology is presented in Appendix I. Major contributors to the report are listed in Appendix II.
We could not determine if the IRS fully
complied with 26 U.S.C. § 6103(e)(8) requirements when responding to all
written requests from joint filers because of our inability to identify joint
filer requests received nationwide.
This condition occurred because the IRS’ management information systems
do not separately record or monitor joint filer requests. During this review, the Commissioner, Wage
and Investment Division, commented that the IRS does not plan to implement a
system to identify or track joint filer requests for information. In addition, there is no statutory or
regulatory requirement for the IRS to develop a separate system that records or
monitors these requests. This is the
fourth year in which we have reported our inability to give an opinion on the
IRS’ compliance with the provisions of 26 U.S.C. § 6103(e)(8).
Management’s Response: IRS management continues to support their
determination to not develop a management control process to track joint filer
information requests. In addition, the
IRS plans to solicit a legislative proposal for a formal request to the Congress
to consider repealing 26 U.S.C. § 7803(d)(1)(B) (Supp. IV 1998). Repealing this provision would alleviate the
need for the TIGTA to annually review and certify the IRS’ compliance with
joint filer information requests.
Appendix I
Detailed Objective, Scope, and Methodology
The overall objective of this review was to assess the Internal Revenue Service’s (IRS) compliance with 26 U.S.C. § 6103(e)(8) (Supp. IV 1998). To accomplish our objective, we:
I.
Obtained confirmation from the
Small Business/Self-Employed and Wage and Investment
Divisions that the IRS does not have nor does it plan to implement a system or
process to identify or track joint filer requests for collection information relating
to the requirements of 26 U.S.C. § 6103(e)(8).
II. Interviewed personnel in the offices of the National Taxpayer Advocate, the IRS Commissioner’s Executive Control and Management System, and the Treasury Inspector General for Tax Administration to determine if there is a system or process that tracks taxpayer complaints relating to the requirements of 26 U.S.C. § 6103(e)(8).
Appendix II
Major Contributors to This Report
Michael R. Phillips, Assistant
Inspector General for Audit (Wage and Investment Income Programs)
Augusta R. Cook, Director
Bryce Kisler, Audit Manager
Lynn Faulkner, Senior Auditor
Kristi
Larson, Senior Auditor
Vacenessia Daniels Brown, Auditor
Appendix III
Deputy
Commissioner N:DC
Commissioner, Small Business/Self-Employed Division S
Commissioner, Wage and Investment Division W
Director,
Compliance, Small Business/Self-Employed Division S:C
Director,
Compliance, Wage and Investment Division
W:CP
Director,
Customer Account Services, Small Business/Self-Employed Division S:CAS
Director,
Customer Account Services, Wage and Investment Division W:CAS
Director, Strategy and Finance W:S
Chief, Customer Liaison S:COM
Chief Counsel CC
National Taxpayer
Advocate TA
Director, Legislative Affairs CL:LA
Director, Office of Program Evaluation and Risk
Analysis N:ADC:R:O
Office of Management Controls N:CFO:F:M
Audit Liaisons:
Executive Assistant, Director, Communications and Liaison CL
Director, Compliance, Small Business/Self-Employed Division S:C
Director, Compliance, Wage and Investment Division W:CP
Director, Customer Account Services, Small Business/Self-Employed Division S:CAS
Director, Customer Account Services, Wage and Investment Division W:CAS
Appendix IV
The response was removed due to its size. To see the complete response, please go to the Adobe PDF version of the report on the TIGTA Public Web Page.