Treasury
Inspector General for Tax Administration
Office of Audit
REVENUE OFFICERS HAVE MINIMAL NEED
FOR INDIVIDUAL FORMS 809 BOOKS
Issued on March 6, 2009
Highlights
Highlights of
Report Number: 2009-30-044 to the
Internal Revenue Service Commissioner for Small Business/Self-Employed Division
and Commissioner for Wage and Investment Division.
IMPACT ON TAXPAYERS
Receipt for Payment
of Taxes (Form 809) is the official receipt issued by the IRS for taxpayers
paying tax liabilities with cash. These
Forms are rarely used by revenue officers (RO) in the Collection Field function,
are often issued as duplicate receipts or for frivolous payment amounts, and
are a security risk. They also require
significant IRS resources to administer and to maintain accountability of the
receipt books. In addition, lost or
stolen Forms 809 books potentially compromise taxpayers’ personally
identifiable information, which increases the risk of identity theft.
WHY TIGTA DID THE AUDIT
This audit was initiated to
evaluate the procedures associated with the IRS use of Form 809 receipt books by Collection Field
function offices. Comments made by Collection
Field function management in meetings during prior reviews suggested that use
of Forms 809 was outdated, was labor-intensive, and required a significant
amount of time and resources to administer.
This audit was included in our Fiscal Year (FY) 2008 Audit Plan.
WHAT
TIGTA FOUND
From
FY 2004 to FY 2007, Forms 809 were used in fewer than 2 percent of all cases closed
by ROs. During FY 2007, fewer than 20
percent of the ROs assigned a Forms 809 book issued a receipt, 59 percent of
the ROs had not issued a single Form 809 from their currently assigned book,
and nearly one-half of the ROs had possessed the same book of 50 receipts for
more than 5 years. In the rare
instances when ROs issued Forms 809, it is possible that more than 90
percent either were not necessary because the taxpayer did not pay with cash,
or the receipts were issued for frivolous amounts.
Despite
the limited use of Forms 809, the administrative burden of the 809 program
remains. Forms 809 are classified as a
security item, and the IRS has detailed procedures and controls for requesting,
issuing, reconciling, and accounting for lost or stolen Forms 809 books. Furthermore, assigning a Forms 809 book to
each RO in the field might be creating an unnecessary security risk. Part 4 of the Forms 809 book remains attached
to the receipt book and contains the name, address, and Taxpayer Identification
Number for all of the taxpayers who were issued a receipt from that book. If a Forms 809 book is lost or stolen, there
is a loss of taxpayers’ personally identifiable information.
Furthermore, the 809
databases, which are the management information systems for the 809 program, are
not effective and do not include controls to ensure the data are complete and
accurate. They are primarily used to
control the Forms 809 receipts books and the individual receipts, and not to produce
useful information to assist in managing the program.
WHAT TIGTA RECOMMENDED
TIGTA recommended that
the IRS research alternative methods for providing receipts when receiving cash
payments. In the interim, the IRS should
assess areas where the Forms 809 books assigned to the field can be reduced, revise
procedures to eliminate the requirement to provide Forms 809 for non-cash
payments as well as establish procedures to help ROs identify and address
frivolous cash payments, ensure the administrative procedures over the Forms 809
books are commensurate with the usage of Form 809, revise Form 809 to conceal
personally identifiable information that is retained with the Forms 809 book, elevate
the 809 databases’ classification and request a full-time database
administrator, and ensure that the 809 database provides accurate and useful
information and analytical reports for better managing the 809 program.
In
their response to the report, IRS officials agreed with the recommendations. The IRS plans to research an approved paper
check electronic image conversion tool to replace the manual process of providing
Forms 809, revise procedures in the field to address “Proof of Delivery” procedures
as well as establish policy to limit immaterial cash payments if legal
authority exists, and revise Part 4 of Form 809 in the next reprint to conceal
the first five digits of the Taxpayer Identification Number. The IRS also plans to conduct a complete
impact assessment of the 809 databases and determine whether it has the
resources required to support the 809 databases as an IRS application with a
full-time administrator. Lastly, the IRS
plans for the original developer to review the 809 databases annually for
accuracy.
READ THE FULL REPORT
To view the report,
including the scope and methodology, go to:
http://www.treas.gov/tigta/auditreports/2009reports/200930044fr.html
Email Address: inquiries@tigta.treas.gov
Phone Number: 202-622-6500
Web Site:
http://www.tigta.gov