Improvements Are Needed in the Oversight and Administration
of the Low-Income Taxpayer Clinic Program
May 2003
Reference Number: 2003-40-125
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.
May
29, 2003
MEMORANDUM FOR
COMMISSIONER, WAGE AND INVESTMENT DIVISION
FROM: Gordon C. Milbourn III /s/ Gordon C. Milbourn III
Acting Deputy Inspector General for Audit
SUBJECT: Final Audit Report – Improvements Are Needed in the Oversight and
Administration of the Low-Income Taxpayer Clinic Program (Audit #
200240072)
This report presents the
results of our review to determine if the Internal Revenue Service’s (IRS)
Low-Income Taxpayer Clinic (LITC) Program was meeting the intent of the
Congress. Specifically, we focused on
whether the IRS made taxpayers aware of the Program and how the IRS ensures
LITCs were operating as intended. This review is part of our discretionary audit coverage of
the IRS’ Wage and Investment Division and is included in our Fiscal Year (FY)
2003 Annual Audit Plan.
Advocates of low-income taxpayers have reported to the Congress
that the tax laws have many provisions that target low-income taxpayers. However, despite these many provisions, a
misconception exists regarding the complexity of the tax law for these
low-income taxpayers. This
misconception is the belief that the tax rules and required forms are simple,
making tax counseling and assistance unnecessary, and that low-income taxpayers
are not examined, so they do not need legal assistance for their tax
issues. According to the National
Taxpayer Advocate, taxpayers
without access to representation receive different and less favorable results
in the tax system than those who are represented by a tax professional. Representation before the IRS not only
protects taxpayers’ rights, but it also helps in explaining tax responsibilities
to taxpayers.
To address the concerns
raised by advocates of low-income taxpayers, the Congress gave the IRS the
responsibility, in the IRS’ Restructuring and Reform Act of 1998 (RRA 98), to provide matching funds to
organizations that provide legal assistance to low-income taxpayers in
controversies with the IRS or inform individuals for whom English is a second
language of their tax rights and responsibilities. Since the passage of the RRA 98, the IRS developed the LITC
Program and, during FY 1999, provided $1.5 million to 34 clinics in 19
states. This effort continues to grow
each year because the IRS solicits and reviews applications from clinics that
wish to participate in the Program.
This growth effort has resulted in the IRS providing $7 million to 127
LITCs in 42 states and the District of Columbia during FY 2002, along with
increased oversight and administration challenges.
In summary, the IRS needs to improve its oversight and
administration of the LITC Program.
Specifically, the IRS does not proactively educate low-income taxpayers
of the existence of the Program when notices are sent to them about being
examined or having tax delinquencies.
Information is also not available to taxpayers through various IRS
Customer Service functions, including the IRS’ web site and toll-free telephone
assistance.
Additionally, the IRS does not have an effective process to
monitor the LITCs to ensure that they are operating as intended. Internal guidelines require IRS personnel to
make visits (referred to as monitoring visits) to both the clinics that wish to
participate in the Program and those clinics approved to participate. These visits are the primary manner by which
the IRS can independently ensure LITCs will operate, or are operating, as
intended. We found that of the 127 LITCs
that participated in the Program during FY 2002, only 36 (28 percent) were subjected to a monitoring visit,
with 15 of these visits including an in-depth review of key areas. The remaining 21 visits were for educational
purposes to determine how much tax preparation work the LITC was doing and if
it was performing outreach services.
None of the 36 visits were conducted prior to approving a clinic’s
participation in the Program.
Finally, the IRS has not established performance measures by which
the Program’s success can be evaluated.
Success of the Program, which is annually reported to the Department of
the Treasury, is currently measured using the number of taxpayers assisted,
which is self-reported by the LITCs with no independent verification performed
by the IRS. LITCs are required to
report the number of taxpayers assisted in both an interim and a final
report. The interim report is due in
May of each year, with the final report being due the following March. As of February 2003, 37 (29 percent) of the
27 LITCs’ reports were not included in the results that were provided to the
Department of the Treasury. These
reports were either not received from the LITCs or were misfiled by the IRS. Furthermore, no qualification was provided
to the Department of the Treasury explaining that the information was
incomplete or that it is self-reported by the LITCs and not verified by the
IRS.
To ensure that
the IRS’ LITC Program is meeting the intent of the Congress, we recommended
that the Commissioner, Wage and Investment Division, improve
the oversight and administration of the LITC Program so that: 1) low-income taxpayers who may benefit from
the Program are aware of the Program’s existence, 2) monitoring visits are
performed to ensure the LITCs are operating as intended, and 3) measures are established to
allow for the accurate monitoring of the Program’s performance.
Management’s complete response to the draft report is included as Appendix V.
Copies of this
report are also being sent to the IRS managers who are affected by the report
recommendations. 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 – Outcome Measures
Appendix V – Management’s Response to the Draft Report
Advocates
of low-income taxpayers have reported to the Congress that the tax laws have
many provisions that specifically target low-income taxpayers. However, despite these many provisions, a
commonly held misconception exists regarding the complexity of the tax law for
low-income taxpayers. This
misconception is the belief that the tax rules and required forms are simple,
making tax counseling and assistance unnecessary, and that low-income taxpayers
are not examined, so they do not need legal assistance for their tax issues.
According to the National Taxpayer Advocate, there is a
great need for client representation for low-income taxpayers since low-income
taxpayers receive inadequate assistance from Internal Revenue Service (IRS)
employees. Taxpayers
without access to representation receive different and less favorable results
in the tax system than those who are represented by a tax professional. Representation before the IRS not only
protects taxpayers’ rights, but it also helps in explaining tax
responsibilities to taxpayers.
To address the concerns raised by advocates of low-income taxpayers, the Congress gave the IRS the responsibility, in the IRS Restructuring and Reform Act of 1998 (RRA 98), to provide matching funds to organizations that provide legal assistance to low-income taxpayers in controversies (typically taxpayers being examined or who have tax delinquencies) with the IRS or inform individuals for whom English is a second language of their tax rights and responsibilities. According to the RRA 98, a clinic is treated as representing low-income taxpayers if at least 90 percent of the taxpayers represented by the clinic have incomes which do not exceed 250 percent of the poverty level and amounts in controversy are $25,000 or less. See Table 1 below.
Table 1 – 2001 Income Ceilings
|
|
Income Ceiling |
|---|---|
|
1 |
$21,475 |
|
2 |
$29,025 |
|
3 |
$36,575 |
|
4 |
$44,125 |
|
5 |
$51,675 |
Source: The
IRS’ 2002 Grant Administration Package and Guidelines (Publication 3319).
According
to the RRA 98, it was believed that the tax services provided by these clinics
would greatly improve low-income taxpayer compliance with the Federal tax laws
and that these clinics should be encouraged.
In the 2002 Fiscal Year (FY) Annual Report to the Congress, the National
Taxpayer Advocate stated that, “funding for low-income taxpayer clinics under
Internal Revenue Code (I.R.C.) Section (§) 7526 and the provision of free or
nominal fee tax representation is a significant step toward a more equitable
system.”
Since the passage of the RRA 98, the IRS developed the LITC Program and, during FY 1999, provided $1.5 million to 34 clinics in 19 states. The effort continues to grow each year because the IRS solicits and reviews applications from clinics that wish to participate in the Program. These applications include items such as: 1) background information including the nature of the organization, experience in coordinating an LITC Program or delivering services to English as a Second Language taxpayers, and quality of management staff; 2) a Program plan that includes the proposed assistance to be provided, Program goals, plans for raising matching funds, etc.; and 3) budget and financial information including a budget narrative explaining the expenses associated with the LITC’s operation, which will be paid out of matched funding.
Upon the
IRS’ review and approval of the application, it awards matched funding (i.e.,
provides funding equal to what the LITC is providing) to the LITC. This growth effort has resulted in the IRS
providing $7 million to 127 LITCs in 42 states and the District of Columbia
during FY 2002, along with increased oversight and administration
challenges. Table 2 below provides the annual funding levels, number of
clinics, and number of states these clinics were in since the Program’s
inception. Table 3 identifies the
number of LITC clinics by state for FY 2002.
Table 2 – Funding and Clinic Participation
by Fiscal Year
|
Fiscal Year |
Number |
Number |
Amount |
|---|---|---|---|
|
1999 |
34 |
19 |
$1.5 million |
|
2000 |
70 |
33 |
$4.4 million |
|
2001 |
102 |
39 |
$6 million |
|
2002 |
127 |
43 |
$7 million |
Source: The IRS’ Grants Administration Office.
Table 3 – Fiscal Year 2002 Clinics by State
|
State |
Number of Clinics |
State |
Number of Clinics |
State |
Number of Clinics |
|---|---|---|---|---|---|
|
AK |
1 |
KY |
2 |
OH |
4 |
|
AL |
1 |
LA |
2 |
OK |
2 |
|
AR |
1 |
MA |
5 |
OR |
2 |
|
AZ |
2 |
MD |
2 |
PA |
4 |
|
CA |
13 |
ME |
1 |
RI |
1 |
|
CO |
1 |
MI |
4 |
SC |
1 |
|
CT |
2 |
MN |
2 |
TN |
1 |
|
DC |
3 |
MO |
3 |
TX |
5 |
|
FL |
7 |
MS |
2 |
VA |
3 |
|
GA |
3 |
NC |
2 |
VT |
1 |
|
HI |
2 |
ND |
1 |
WA |
2 |
|
IA |
1 |
NJ |
5 |
WI |
2 |
|
ID |
1 |
NM |
2 |
WV |
2 |
|
IL |
6 |
NV |
1 |
|
|
|
IN |
4 |
NY |
15 |
|
|
Source:
The IRS’ Grants Administration Office Management Information System.
At the time of our review, the
Acting IRS Commissioner decided that the oversight and administration of the
LITC Program should be transferred to the IRS’ Taxpayer Advocate function. Transferring oversight to the Advocate was
seen as a better way for the IRS to serve qualified low-income taxpayers. The target date for the official transfer
was initially March 1, 2003.
The audit was conducted from September 2002 to January 2003 at the IRS’ National Headquarters Office of Grants Administration and at LITCs in Maine and Connecticut. The audit was conducted in accordance with Government Auditing Standards. Detailed information on our audit objective, scope, and methodology is presented in Appendix I. Major contributors to the report are listed in Appendix II.
The IRS needs to improve its oversight and administration of the LITC Program to ensure that the Program is operating as intended by the Congress. Specifically, the IRS:
· Does not proactively educate low-income taxpayers on the existence of the Program.
· Does not have an effective process to monitor LITCs to ensure that they are operating as intended.
· Has not established performance measures by which the Program’s success can be evaluated.
The IRS does not proactively educate low-income
taxpayers on the existence of the Program
The goal
of the IRS’ redesign efforts for the Wage and Investment (W&I) Division was
to build a new organizational structure that provides more pre-filing (i.e.,
actions the IRS takes prior to a taxpayer filing a tax return) education and
assistance to W&I taxpayers to enable them to understand and satisfy their
tax responsibilities. The IRS found
that many of the tax problems faced by W&I taxpayers have less to do with
tax evasion and more to do with a misunderstanding of their tax obligations due
to education and communication issues.
The IRS’ Stakeholder Partnerships, Education, and Communication (SPEC) function is responsible for proactively serving the pre-filing needs of W&I taxpayers. The SPEC function primarily focuses its educational and assistance efforts on four under-served segments of W&I taxpayers – low-income, elderly, multi-lingual, and disabled. As such, oversight and administration of the LITC Program was assigned to the IRS’ SPEC function.
While the IRS has committed to
proactively educate taxpayers, it does not provide options to educate low-income
taxpayers who could possibly benefit from the assistance of a clinic within the
LITC Program. Specifically, the IRS
does not proactively educate low-income taxpayers when notices are sent to them
about being examined or having tax delinquencies. In addition, information is not available to taxpayers through
various IRS Customer Service functions, including the IRS’ web site and
toll-free telephone assistance.
IRS
internal guidelines, along with Publication 3319, state that the clinics that
participate in the LITC Program are to be responsible for publicizing the
Program to eligible low-income taxpayers.
One primary means by which LITCs are to publicize the Program is to
include brochures, posters, and other material
in IRS walk-in Taxpayer Assistance Centers (TAC). We found that this means of publicizing the Program is not being
consistently used by the LITCs. For the
106 TACs located within the vicinity of the 127 LITCs that participated in the
Program during Calendar Year 2002, only 36 (34 percent) reported having LITC
Program information available.
IRS SPEC management indicated that
proactive publicizing of the Program has been limited because of: 1) increased mail costs to include a stuffer
with all notices; 2) an IRS Chief Counsel ruling that prohibits the IRS from
including a flyer in initial mailings to low-income taxpayers without a
disclaimer and a listing of other known reputable referral agencies (i.e.,
local bar associations); and 3) reluctance by the LITCs to be able to handle an
increased traffic of clients that would result from publicity efforts,
potentially creating a need to turn taxpayers away. To assess whether this reluctance exists, we randomly contacted
20 LITCs, of which 18 responded to our inquiry. Of the 18 clinics responding, 17 stated that they would support
IRS efforts to publicize the LITC Program, as they would be able to handle
additional clients.
The IRS does not have an effective process to monitor
LITCs to ensure that they are operating as intended
The IRS’ internal guidelines
require IRS personnel to make visits (referred to as monitoring visits) to both the clinics
that wish to participate in the Program and those clinics approved to participate. These visits are the primary
manner by which the IRS can independently ensure LITCs will operate, or are
operating, as intended. The visits are to review the grantees’ internal control procedures and
business management capabilities.
We found that of the 127 LITCs that participated in the Program during FY 2002, only 36 (28 percent) were subjected to a monitoring visit; however, none of these visits were conducted prior to a clinic being approved to participate in the Program. For the 36 monitoring visits conducted, 15 included an in-depth review of key areas such as clinic accounting, measuring assistance provided, etc. The remaining 21 were classified as educational to determine how much tax preparation work the LITC was doing and if it was performing outreach services. In addition, for the 36 visits that were conducted, there was no consistent approach followed by IRS personnel visiting these LITCs and then documenting the results of each visit.
The issue of the need for IRS
improvements in the monitoring of the LITC recipients by performing site visits was previously brought to management’s attention in a
November 2001 Treasury Inspector General for Tax Administration (TIGTA) audit
report. Specifically, we reported that
the IRS was not consistently conducting site visits. Although the IRS planned to visit 19 of the 102
LITCs participating in FY 2001, management stated no visits were conducted due
to inadequate resources.
In a subsequent follow-up review,
we reported in May 2002 that the IRS should periodically verify the
accuracy of the financial and program reports submitted by the LITCs. This reported information could be verified
either by performing site visits or by requesting additional documentation to
support the data included in the reports.
To address recent issues regarding
the need to improve monitoring visits, responsible SPEC management noted that
insufficient resources again contributed to the inability to adequately perform
monitoring visits during FY 2002. As of
February 2002, the SPEC organization had 438 employees nationwide; however,
only 7 employees were assigned to work in the IRS’ Grants Administration Office
that is responsible for conducting the monitoring visits.
The IRS has not established performance measures by
which the Program’s success can be evaluated
The
Government Performance and Results Act of 1993 (GPRA) states that agencies
should establish performance indicators to be used in measuring or assessing
the relevant outputs, service levels, and outcomes of each program
activity. However, our review
identified that the IRS has not established measurements by which the LITC
Program’s success can be evaluated.
Success of the Program, which is included in an annual report provided
to the Department of the Treasury, is currently measured using the number of
taxpayers assisted. This information is
self-reported by the LITCs, with no independent verification performed by the
IRS to ensure the accuracy of the LITCs’ reporting.
LITCs
are required to report the number of taxpayers assisted in both an interim and
a final report. The interim report is
due in May of each year, with the final report being due the following
March. As of February 2003, 37 (29
percent) of the 127 LITCs’ reports were not included in the results that were
provided to the Department of the Treasury.
These reports were either not received from the LITCs or were misfiled
by the IRS. Furthermore, no qualification
was provided to the Department of the Treasury explaining that the information
was incomplete or that it is self-reported by the LITCs with no independent
verification done by the IRS.
The issue of the need for IRS improvements in the analysis of the information reported by LITCs was previously raised in a November 2001 TIGTA audit report. The report discussed that the IRS captures data provided in the reports received from the LITCs detailing the number of taxpayers assisted. We noted that these reports should be closely analyzed to ensure that grant funds had been expended and matched appropriately and that the goals and objectives of the Program were being met. Additionally, we noted that the Program office should analyze the reports to help identify potential issues at the LITCs. This would have helped in determining which clinics to visit to ensure the information provided in the reports was accurate.
When
discussing performance measures during our current review, responsible SPEC
function management told us why yearly goals have not been established to
measure the success of the LITC Program.
Specifically, they noted that discussions on this issue have been held
with the IRS’ Grants Advisory Board.
However, SPEC function management explained that defining what success
is in the LITC Program is not an easy task and that once it is defined, systems
have to be in place to measure it.
Effect on the LITC
Program
Without improvements to the oversight
and administration of the LITC Program, many low-income taxpayers who could
benefit from this Program may not be aware of the Program’s existence. Our analysis of IRS tax return filing
information for Tax Year 2001 identified that out of a total population of over
127 million low-income taxpayers, over 62 million (49 percent) fall under the
poverty guidelines established for the LITC Program (see Appendix IV for more
detailed information on our methodology).
Furthermore, Census data for Calendar Year 2000 identified over 46
million taxpayers who were classified as speaking a language other than
English.
Without the implementation of an
effective monitoring and measurement process, the IRS has no assurance that the
LITC Program is meeting the intent of the Congress, including obtaining
reliable information to ensure that grant funds are being used appropriately
and that clinic recipients are complying with the terms and conditions of the
Program.
To ensure that the IRS’ LITC Program is meeting the intent of the Congress, the Commissioner, W&I Division, should ensure that:
1.
Low-income taxpayers who may benefit from the Program
are aware of the Program’s existence through various IRS communication
channels, including the toll-free customer service number and web site.
Management’s Response: Both the SPEC function and the Taxpayer Advocate Service (TAS) are providing increased communication and marketing/outreach efforts for LITCs.
The SPEC function is pursuing the inclusion of LITCs in community coalitions serving low-income taxpayers and informing key external partners about local clinics in support of the planned TAS marketing and outreach efforts. The TAS has completed several actions to address this issue and plans additional initiatives during 2003. Efforts include articles on the LITC Program within the Taxpayer Advocate’s irs.gov Internet site and a new brochure to be used for LITC marketing and outreach efforts. The TAS also developed talking points and tools for IRS employees to use in outreach activities and to help educate employees about LITCs.
The TAS is redefining the standards of operation for clinics
participating in the Program. One of
the standards addresses effective publicity/marketing efforts directed towards
target audiences. The local Taxpayer
Advocates will also attend mandatory training on LITCs that will define program
responsibilities, outreach requirements, and standards for site assistance
visits.
2.
Monitoring visits are performed both
prior to and subsequent to participation in the LITC Program. In addition, a consistent approach is needed
when documenting these visits.
Management’s
Response: The TAS will coordinate and periodically make
onsite assistance visits to clinics.
Standards of operations for LITCs are being developed and clinics will
receive training on these standards.
Standards include internal controls, tax library, networking, mentoring
programs, and qualified tax expert requirement. The TAS will train local Taxpayer Advocates and Area Directors on
the standards of operations and on how to conduct and document the on-site assistance
visits.
3.
Measures
are established to allow for accurate monitoring of the Program’s performance.
Management’s
Response: The Grant Administration Advisory
Board, formed early in FY 2002, began developing outcome measures and a
reporting format for use by LITCs. The
TAS will develop LITC measures and provide training on them at the annual LITC
conference. Measurements will also be
stressed during on-site assistance visits.
Appendix I
Detailed Objective, Scope, and Methodology
The overall objective was to determine if the
Internal Revenue Service’s (IRS) Low-Income Taxpayer Clinic (LITC) Program was
meeting the intent of the Congress by ensuring that taxpayers who could benefit
from the LITCs were made aware of the Program and that the LITCs were operating
as intended. Specifically, we:
I. Identified the procedures that the IRS had in place to ensure that taxpayers who could benefit from the LITCs are aware of the Program.
A. Reviewed the Internal Revenue Manual (IRM) for procedures that the IRS had for publicizing the LITCs in the Program.
B. Determined what information was included with Collection, Examination, and Appeals notices (or any types of IRS actions which would constitute a controversy with the IRS) that are mailed out to taxpayers. Contacted National Headquarters analysts for the Collection, Examination, and Appeals functions to determine if LITC stuffers were included with the taxpayer notices from these areas.
C. Determined if LITC information was available at Taxpayer Assistance Centers (TAC) by polling the 106 TACs that were located in the vicinity of the 127 LITCs that participated in the Program in Fiscal Year 2002.
D. Conducted site visits to LITCs in Portland, Maine, and Hamden, Connecticut, and one telephone call to the Brooklyn, New York, LITC (selected for proximity to the audit team) and determined how they promoted the Program and if the LITCs had stuffers that advertised their clinics included with any IRS notices.
E. Determined if the IRS made the LITC telephone numbers and locations available to taxpayers through its toll-free number or its web site (Digital Daily).
II. Identified the process that the IRS had in place to ensure that the LITCs were operating as intended by the Congress.
A. Reviewed the IRM for procedures that the IRS had on monitoring the LITCs that participate in the Program.
B. Obtained and reviewed the case documents for all 36 monitoring visits in Calendar Year 2002 to determine if the review included outreach efforts and a determination of the number of English as a Second Language taxpayers.
III. Determined how the IRS measured the success of the LITC Program.
A. Interviewed management to determine how the success of the LITC Program is measured. Specifically, determined the process of deobligation and reobligation of awarded grant funds.
B. Obtained and reviewed all annual reports for 2001 and all interim reports for 2002 submitted by the LITCs to determine the number of taxpayers assisted by the LITCs.
C. Contacted the three LITCs selected in Objective I.D. above to determine how they tracked the number of taxpayers, etc.
IV. Identified the number of low-income taxpayers that could be in controversy with the IRS and which LITCs could service nationwide to attempt to quantify the number of people that could have benefited from the Program.
Appendix II
Major Contributors to This Report
Michael R. Phillips, Assistant Inspector General for Audit
(Wage and Investment Income Programs)
Kerry Kilpatrick, Director
Russell P. Martin, Acting Director
Pamela M. DeSimone, Acting Audit Manager
Lena Dietles, Auditor
Roberta Fuller, Auditor
Appendix III
Commissioner N:C
Deputy
Commissioner N:DC
Deputy
Commissioner, Wage and Investment Division
W
Director, Customer Assistance,
Relationships, and Education W:CAR
Director, Field
Operations W:CAR:SPEC:FO
Director, Stakeholder Partnerships,
Education, and Communication W:CAR:SPEC
Grants Administration Manager W:CAR:SPEC
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:AR:M
Audit Liaison: Program/Process
Assistant Coordinator, Wage and Investment Division W:HR
Appendix IV
This appendix presents detailed information on the measurable impact that our recommended corrective actions will have on tax administration. These benefits will be incorporated into our Semiannual Report to the Congress.
Type and Value of Outcome Measure:
· Taxpayer burden – Potential; over 62 million taxpayers affected (see page 4).
Methodology Used to Measure the Reported Benefit:
We performed nine queries using the 2002 Return Transaction File (RTF) files (these files contain 2001 tax data) and captured all taxpayers meeting the following criteria:
Criteria
|
Number of Taxpayers
|
|---|---|
|
A 1-person household
with an adjusted gross income (AGI) less than or equal to $21,475. |
32,796,282 |
|
A 2-person household
(primary and secondary taxpayers) with an AGI less than or equal to $29,025. |
7,097,313 |
|
A 2-person household
(primary taxpayer and 1 dependent) with an AGI less than or equal to $29,025. |
7,322,256 |
|
A 3-person household
(primary and secondary taxpayers and 1 dependent) with an AGI of less than or
equal to $36,575. |
2,757,057 |
|
A 3-person household
(primary taxpayer and 2 dependents) with an AGI of less than or equal to
$36,575. |
5,380,853 |
|
A 4-person household
(primary and secondary taxpayers and 2 dependents) with an AGI of less than
or equal to $44,125. |
3,453,501 |
|
A 4-person household
(primary taxpayer and 3 dependents) with an AGI of less than or equal to
$44,125. |
1,278,229 |
|
A 5-person household
(primary and secondary taxpayers and 3 dependents) with an AGI of less than
or equal to $51,675. |
1,949,422 |
|
A 5-person household (primary taxpayer and 4 dependents) with an AGI of less than or equal to $51,675. |
414,745 |
|
Total: |
62,449,658 |
We used the 2001 Poverty Guidelines, updated annually by the Department of Health and Human Services, to determine the amounts of the AGIs and corresponding family unit size when requesting data from the RTF files. The 2002 RTF files have a total population of 127,010,808 and are available through the Treasury Inspector General for Tax Administration’s Data Center Warehouse. Our analysis of IRS tax return filing information for Tax Year 2001 identified that out of a total population of over 127 million low-income taxpayers, over 62 million (49 percent) fall under the poverty guidelines established for the LITC Program.
Appendix V
Management’s Response to the Draft Report
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.