TREASURY INSPECTOR GENERAL FOR TAX ADMINISTRATION

 

 

Fiscal Year 2012 Statutory Audit of Compliance With Legal Guidelines Restricting the Use of Records of Tax Enforcement Results

 

 

 

August 7, 2012

 

Reference Number:  2012-30-090

 

 

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.

 

Phone Number  /  202-622-6500

E-mail Address /  TIGTACommunications@tigta.treas.gov

Website           /  http://www.tigta.gov

 

 

HIGHLIGHTS

FISCAL YEAR 2012 STATUTORY AUDIT OF COMPLIANCE WITH LEGAL GUIDELINES RESTRICTING THE USE OF RECORDS OF TAX ENFORCEMENT RESULTS

Highlights

Final Report issued on August 7, 2012

Highlights of Reference Number:  2012-30-090 to the Internal Revenue Service Deputy Commissioner for Operations Support.

IMPACT ON TAXPAYERS

The IRS Restructuring and Reform Act of 1998 (RRA 98) requires the IRS to ensure that managers do not evaluate enforcement employees using any record of tax enforcement results (ROTER) or base employee successes on meeting ROTER goals and quotas.  Based on the results of our sample, TIGTA believes the IRS’s efforts to enforce the employee evaluation requirements under RRA 98 Section 1204 are generally effective and are helping to protect the rights of taxpayers.

WHY TIGTA DID THE AUDIT

TIGTA is required under Internal Revenue Code Section 7803(d)(1)(2000) to annually evaluate whether the IRS complies with restrictions on the use of enforcement statistics under RRA 98 Section 1204.  Our review determined whether the IRS complied with:

·        Section 1204(a), which prohibits the IRS from using any ROTER to evaluate employees, or to impose or suggest production quotas or goals.

·        Section 1204(b), which requires that employees be evaluated using the fair and equitable treatment of taxpayers as a performance standard.

·        Section 1204(c), which requires each appropriate supervisor to self-certify quarterly whether ROTERs were used in a prohibited manner.

WHAT TIGTA FOUND

The IRS achieved full compliance with RRA 98 Section 1204(a) requirements.  Our review found that managers had not included ROTERs in performance evaluation documents for the 145 employees reviewed.

The IRS also achieved full compliance with RRA 98 Section 1204(b) and (c) requirements.  The IRS evaluated all employees on the fair and equitable treatment of taxpayers and prepared quarterly self-certifications showing that ROTERs were not used to evaluate employees.

In Fiscal Year 2011, the IRS launched mandatory RRA 98 Section 1204 training for managers and employees.  TIGTA selected a judgmental sample of 15 employees and found a high percentage of employees understood the term “retention standard.”  However, 13 percent were not sure they attended retention standard training.

WHAT TIGTA RECOMMENDED

TIGTA recommended that the Deputy Commissioner for Operations Support strengthen the IRS’s efforts to achieve full compliance with RRA 98 Section 1204 procedures by continuing the emphasis on training. 

The IRS agreed with the recommendation and plans to evaluate its current training and consider enhancing its program material, if appropriate, to ensure that IRS employees fully understand the training.

 

August 7, 2012

 

 

MEMORANDUM FOR DEPUTY COMMISSIONER FOR OPERATIONS SUPPORT

 

FROM:                       Michael E. McKenney /s/ Michael E. McKenney

                                  Acting Deputy Inspector General for Audit

 

SUBJECT:                  Final Audit Report – Fiscal Year 2012 Statutory Audit of Compliance With Legal Guidelines Restricting the Use of Records of Tax Enforcement Results (Audit # 201230009)

 

This report presents the results of our review to determine whether the Internal Revenue Service (IRS) complied with restrictions on the use of enforcement statistics to evaluate employees as set forth in the IRS Restructuring and Reform Act of 1998 (RRA 98) Section 1204.[1]  The Treasury Inspector General for Tax Administration is required under Internal Revenue Code Section 7803(d)(1)(2000) to annually evaluate the IRS’s compliance with the provisions of RRA 98 Section 1204. 

The RRA 98 requires the IRS to ensure that managers do not evaluate enforcement employees[2] using any record of tax enforcement results (ROTER) or base employee successes on meeting goals and quotas for ROTERs.  This review is part of our Fiscal Year 2012 Annual Audit Plan and addresses the major management challenge of Taxpayer Protection and Rights.

Management’s complete response to the draft report is included as Appendix VI.

Copies of this report are also being sent to the IRS managers affected by the report recommendation.  Please contact me at (202) 622-6510 if you have questions or Frank Dunleavy, Acting Assistant Inspector General for Audit (Compliance and Enforcement Operations), at (213) 894-4470 (Ext. 128).

 

 

Table of Contents

 

Background

Results of Review

First-Line and Second-Line Managers Appropriately Completed Their Quarterly Self-Certifications

The Internal Revenue Service Is in Full Compliance With the Use of Records of Tax Enforcement Results Procedures

Mandatory Section 1204 Training Is Increasing Employee Awareness of the Retention Standard

Recommendation 1:

Appendices

Appendix I – Detailed Objective, Scope, and Methodology

Appendix II – Major Contributors to This Report

Appendix III – Report Distribution List

Appendix IV – Prior Audit Reports

Appendix V – Example of Form 1204-M, Manager’s Quarterly Self-Certification – No Violations

Appendix VI – Management’s Response to the Draft Report

 

 

Abbreviations

 

 

 

Background

 

RRA 98 Section 1204(a) prohibits the IRS from using ROTERs to evaluate employees, or to impose or suggest quotas or goals for such employees.

On July 22, 1998, the President of the United States signed the Internal Revenue Service (IRS) Restructuring and Reform Act of 1998 (RRA 98) into law.[3]  RRA 98 Section 1204 restricts the use of enforcement statistics.  Specifically, RRA 98 Section 1204(a) prohibits the IRS from using any record of tax enforcement results (ROTER) to evaluate employees, or to impose or suggest quotas or goals for such employees.

The IRS defines ROTERs as data, statistics, compilations of information, or other numerical or quantitative recordings of the tax enforcement results reached in one or more cases.  Examples of ROTERs include the amount of dollars collected or assessed, the number of fraud referrals made, and the number of seizures conducted.  A ROTER does not include evaluating an individual case to determine if an employee exercised appropriate judgment in pursuing enforcement of the tax laws.

RRA 98 Section 1204(b) requires employees to be evaluated using the fair and equitable treatment of taxpayers as a performance standard.  The IRS refers to this standard as the retention standard.  The standard requires employees to administer the tax laws fairly and equitably; protect all taxpayers’ rights; and treat each taxpayer ethically with honesty, integrity, and respect.  This provision of the law was enacted to provide assurance that employee performance is focused on providing quality service to taxpayers instead of achieving enforcement results.

RRA 98 Section 1204(c) requires each appropriate supervisor to perform a quarterly self-certification.  In the self-certification, the appropriate supervisor attests to whether ROTERs were used in a prohibited manner.  The IRS defines an appropriate supervisor as the highest ranking executive in a distinct organizational unit who supervises directly or indirectly one or more Section 1204 enforcement employees.[4]  Current IRS procedures require each level of management, beginning with first-line managers of Section 1204(a) employees, to self-certify as to whether or not they used ROTERs in a manner prohibited by RRA 98 Section 1204(a).  The appropriate supervisor then prepares a consolidated office certification covering the entire organizational unit.

The IRS functional offices and divisions, including the Office of the Chief, Appeals; the Office of the Chief, Criminal Investigation; the Large Business and International Division; the Small Business/Self-Employed Division; the Office of the National Taxpayer Advocate; the Tax Exempt and Government Entities Division; and the Wage and Investment Division are responsible for RRA 98 Section 1204 program implementation within their respective areas.  Section 1204 Program Managers and Coordinators in each business organization are available to provide guidance to managers regarding Section 1204 issues, including the certification process.

Figure 1 depicts the ratio of Section 1204 and Non-Section 1204 managers in the subject business organizations as of June 30, 2011.  The Section 1204 managers either supervised a Section 1204 employee or provided guidance or direction for Section 1204 activities.

Figure 1:  Number of Section 1204 and Non-Section 1204 Managers by Business Organization (as of June 30, 2011)

Figure 1 was removed due to its size.  To see Figure 1, please go to the Adobe PDF version of the report on the TIGTA Public Web Page.

Source:  Our analysis of data from the IRS’s Corporate Planning and Internal Control database.

Internal Revenue Code Section 7803(d)(1)(2000) requires the Treasury Inspector General for Tax Administration (TIGTA) to determine annually whether the IRS is in compliance with restrictions on the use of enforcement statistics under RRA 98 Section 1204.  We have previously performed 13 annual reviews to meet this requirement.  Appendix IV lists the prior audit reports.

This review was performed at the IRS National Headquarters in Washington, D.C., in the Office of the Chief Financial Officer; the Office of the Chief, Appeals; the Office of the Chief, Criminal Investigation; the Office of the National Taxpayer Advocate; the Large Business and International Division; the Small Business/Self-Employed Division; the Tax Exempt and Government Entities Division; and the Wage and Investment Division, during the period December 2011 through April 2012.

Onsite reviews were performed at the IRS field offices in Phoenix, Arizona; Plantation, Florida; Baltimore, Maryland; Boston, Massachusetts; and Austin, Texas.  We conducted this performance audit in accordance with generally accepted government auditing standards.  Those standards require that we plan and perform the audit to obtain sufficient, appropriate evidence to provide a reasonable basis for our findings and conclusions based on our audit objective.  We believe that the evidence obtained provides a reasonable basis for our findings and conclusions based on our audit objective.  Detailed information on our audit objective, scope, and methodology is presented in Appendix I.  Major contributors to the report are listed in Appendix II.

 

 

Results of Review

 

First-Line and Second-Line Managers Appropriately Completed Their Quarterly Self-Certifications

All 40 first-line and second-line managers we sampled complied with the provisions of RRA 98 Section 1204(c) and completed the required self-certifications on the use of tax enforcement results for the second and fourth quarters of Fiscal Year (FY) 2011.[5]  Each manager certified whether or not ROTERs were used when evaluating employees.  Appendix V reflects the Form 1204-M, Manager’s Quarterly Self-Certification – No Violations, that managers use to self-certify that there are no violations of RRA 98 Sections 1204(a) and (b).

RRA 98 Section 1204(c) requires specific supervisors to certify quarterly, in writing, to the IRS Commissioner whether ROTERs were used in a prohibited manner.  Therefore, managers who evaluate Section 1204 employees are required to certify in writing that they did not:

• Use ROTERs to evaluate employees, or to impose or suggest production quotas or goals for employees in any performance evaluations, including appraisals, awards, or promotion justifications, written or reviewed by the manager.
• Verbally communicate to employees that ROTERs affected their evaluations.
• Verbally, or in writing, use ROTERs to impose or suggest production quotas or goals for employees or for work unit activities (e.g., through program guidance or business and program reviews).

Per the Internal Revenue Manual,[6] the business organization and function Section 1204 Program Managers and their respective Section 1204 Coordinators should monitor the quarterly certification process and provide guidance to managers regarding Section 1204 issues throughout their organizations/functions.  Through the quarterly certification process, managers are reminded of their responsibilities under RRA 98 Section 1204 not to evaluate their employees on the basis of ROTERs.  The quarterly certification process helps to ensure that managers are aware of the IRS’s commitment to administer the tax laws fairly and to protect the rights of taxpayers.

The Internal Revenue Service Is in Full Compliance With the Use of Records of Tax Enforcement Results Procedures

In FY 2011, the IRS achieved full compliance with the Section 1204 employee or manager performance-related documents reviewed.

TIGTA auditors reviewed 418 performance-related documents for the 145 IRS employees.

To evaluate the IRS’s compliance with RRA 98 Sections 1204(a) and 1204(b), we selected a judgmental sample of 35 first-line Section 1204 managers and 105 employees in five sites.[7]  We selected seven managers and three of their employees at each site and reviewed their performance evaluation documents.  We also reviewed the performance documents for five second-line Section 1204 managers.  We evaluated a total of 418 FY 2011 performance-related documents, including mid-year and annual performance reviews, employee self-assessments, and workload reviews documentation for the 145 employees, to determine whether ROTERs were used when evaluating employees’ performance.

Based on the results of our review, we believe the IRS’s efforts to ensure that managers are not using ROTERs to evaluate employees are effective and are helping to protect the rights of taxpayers.  The IRS continues to use its managerial self-certification process to identify and report ROTER violations.  In addition, each manager certified that ROTERs production goals or quotas were not used when evaluating employees.

Mandatory Section 1204 Training Is Increasing Employee Awareness of the Retention Standard

In FY 2011, the IRS established mandatory RRA 98 Section 1204 training for all managers and employees.  The training began March 1, 2011, and continued through September 30, 2011.  To evaluate the effectiveness of the IRS’s training during FY 2011, we interviewed a judgmental sample of 15 Section 1204 employees to determine if they had received training and understood the terminology “retention standard.”  Specifically, we determined that:

• 14 (93 percent) of the employees understood the term “retention standard.”
• 13 (87 percent) of the employees were sure they attended training on this topic.

These percentages are a significant improvement over our prior year’s report,[8] in which we reported that 72 percent of the sampled employees understood the term, and only 59 percent were sure they had received training related to the retention standard in FY 2010.

The first-line managers we sampled documented that they had evaluated employees on the retention standard.  According to RRA 98 Section 1204(b), IRS employees are to be evaluated on the retention standard and the standard applies to all executives, managers, and other employees.

On June 16, 1999, the IRS established a retention standard method to ensure that employee performance is focused on providing quality service to taxpayers instead of on achieving enforcement results.  For all of the employees sampled, Block 9 of the Form 6850-BU, Bargaining Unit Performance Appraisal and Recognition Election, or Form 6850-NBU, Non-Bargaining Unit Performance Appraisal, was checked indicating that the employees were evaluated on this standard.  Figure 2 presents an example of the Form 6850-BU pertaining to the retention standard.

Figure 2:  Example of a Form 6850-BU Retention Standard Rating

Figure 2 was removed due to its size.  To see Figure 2, please go to the Adobe PDF version of the report on the TIGTA Public Web Page.

Source:  Form 6850-BU.

In addition, we judgmentally selected seven second-line Section 1204 managers from each IRS function or operating division to obtain their feedback on the FY 2011 training.  All seven of the managers thought the course material was comprehensive and beneficial.  However, five (71 percent) of the managers responded they did not instruct their first-line managers to have follow-up meetings with their employees to ensure they understood the training.

Most employees understood the terminology, but some were not sure they received retention standard training

A high percentage of employees understood the term “retention standard.”  However, 13 percent were not sure they attended retention standard training.  On February 11, 2011, the IRS announced the mandatory RRA Section 1204 training, which was staggered to accommodate the operating and functional divisions’ workloads.

The training was required to ensure that Section 1204 employees and managers understand:

·       The rules for appropriately using statistics in setting goals and measuring performance.

·       The requirements for sharing and evaluating the Fair and Equitable Treatment of Taxpayers Retention Standard.

·       The process for quarterly certification of compliance with Section 1204 requirements.

·       That annual program reviews are conducted by the Chief Financial Officer and the TIGTA to assess Section 1204 compliance.

The training/briefing course was taken individually by employees through the Enterprise Learning Management System[9] and took approximately 30 minutes to complete.  Figure 3 shows the introduction to the new mandatory training.

Figure 3:  Introduction to Section 1204 Employees Briefing

Figure 3 was removed due to its size.  To see Figure 3, please go to the Adobe PDF version of the report on the TIGTA Public Web Page.

Source:  IRS Chief Financial Officer.

Based on the results of our review, the IRS’s efforts to conduct the mandatory RRA 98 Section 1204 training in FY 2011 indicate that the IRS is being proactive in obtaining full compliance with Section 1204 requirements.  However, continued emphasis is needed to ensure all Section 1204 employees are aware of the importance of the RRA 98 Section 1204 training.

Recommendation

Recommendation 1:  The Deputy Commissioner for Operations Support should strengthen the IRS’s efforts to achieve full compliance with RRA 98 Section 1204 procedures by continuing the emphasis on training.  This effort could include expanding the training to at least one hour by adding additional practice questions and more in-depth responses to incorrect answers to ensure the employees fully understand the training.

Management’s Response:  IRS management agreed with this recommendation.  The Chief Financial Officer will evaluate the current Enterprise Learning Management System Section 1204 training module and consider enhancing the program material, if appropriate, to ensure that IRS employees fully understand the training.

 

Appendix I

 

Detailed Objective, Scope, and Methodology

 

The overall objective of this review was to determine whether the IRS complied with restrictions on the use of enforcement statistics to evaluate employees as set forth in RRA 98 Section 1204.[10]  To accomplish this objective, we:

I.                 Selected a judgmental sample[11] of 40 managers from a population of 5,707 first-line and second-line managers to determine whether they complied with the provisions of RRA 98 Sections 1204(a) and 1204(b) when evaluating their Section 1204 employees’^[12] performance.

A.    Identified the Office of the Chief Financial Officer; the Office of the Chief, Appeals; the Office of the Chief, Criminal Investigation; the Office of the National Taxpayer Advocate; the Large Business and International Division; the Small Business/Self-Employed Division; the Tax Exempt and Government Entities Division; and the Wage and Investment Division office locations in various cities and the number of Section 1204 first-line managers located in each business organization.

We judgmentally selected five cities for this year’s audit.  Onsite reviews were performed at the IRS field offices in Phoenix, Arizona; Plantation, Florida; Baltimore, Maryland; Boston, Massachusetts; and Austin, Texas.  We used FY 2011 data to select the audit sites for the sample.  The audit sites were judgmentally selected based on the number of Section 1204 first-line managers located at a site and the business organizations represented, prior audit coverage in FYs 2004 through 2011,[13] geographical location of potential cities for travel considerations, and whether the sites included enough Section 1204 managers and employees to satisfy our sample.

B.    Selected a judgmental sample of seven first-line managers per city and three Section 1204 employees for each manager in our sample.  We selected managers and employees from five sites that had at least five business organizations with Section 1204 first-line managers who had not been reviewed recently by the TIGTA or by the IRS’s independent reviews.  This provided a total of 35 first-line Section 1204 managers and 105 Section 1204 employees for review.  We obtained the FY 2011 performance evaluation documents prepared by the manager (including mid-year performance reviews, annual performance reviews, and workload reviews) to determine whether ROTERs were used in the evaluation process and employees were evaluated appropriately on the fair and equitable treatment of taxpayers.

C.    Determined that training records did not have to be reviewed as no ROTERs had been found in managers or employees evaluations or self-assessments.

D.    Interviewed a judgmental sample of 15 Section 1204 employees from the IRS sites visited concerning the use of ROTERs and their understanding of the retention standard.  The overall population could not be determined because the sample was selected based on the employees in the office the day of our visits.

E.     Selected and reviewed a judgmental sample of five second-line Section 1204 managers’ management performance evaluation documentation (i.e., mid-year performance reviews, annual performance reviews, etc.) for the inappropriate use of ROTERs.  We focused on second-line managers whose performance documentation was located in the same cities as the first-line managers for each of the five sites selected for review.

II.               Determined whether the 40 selected first-line and second-line Section 1204 managers complied with RRA 98 Section 1204(c) by certifying by letter whether or not ROTERs were used in a manner prohibited by RRA 98 Section 1204(a).

A.    Obtained FY 2011 second and fourth quarter self-certifications for the selected first-line managers.

B.    Reviewed the self-certifications for compliance with IRS procedures.

III.             Determined the effectiveness of the mandatory RRA 98 Section 1204 training for managers and employees.

A.    Selected seven second-line Section 1204 managers from each function or operating division to obtain their feedback on the training.

B.    Reviewed the documentation to determine how and when the Section 1204 training was implemented.

C.    Reviewed the Section 1204 training materials to determine their effectiveness.

D.    Interviewed a judgmental sample of 15 Section 1204 employees from the IRS sites visited to determine if the employees had received the RRA 98 Section 1204 training.  The overall population could not be determined because the sample was selected based on the employees in the office the day of our visits.

Internal controls methodology

Internal controls relate to management’s plans, methods, and procedures used to meet their mission, goals, and objectives.  Internal controls include the processes and procedures for planning, organizing, directing, and controlling program operations.  They include the systems for measuring, reporting, and monitoring program performance.  We determined the following internal controls were relevant to our audit objective:  guidelines and rules related to using ROTERs in a way as to improperly influence the handling of taxpayer cases and employees understanding and adherence to the retention standard.  We evaluated these controls and reviewed judgmental samples of performance appraisals and signed self-certifications to determine whether the IRS complied with restrictions on the use of enforcement statistics when evaluating its employees.

 

Appendix II

 

Major Contributors to This Report

 

Margaret E. Begg, Assistant Inspector General for Audit (Compliance and Enforcement Operations)

Frank Dunleavy, Acting Assistant Inspector General for Audit (Compliance and Enforcement Operations)

Bryce Kisler, Director

Tina Parmer, Audit Manager

Carol Gerkens, Lead Auditor

Andrea Barnes, Senior Auditor

Doris Cervantes, Senior Auditor

John Chiappino, Senior Auditor

Gwendolyn Green, Senior Auditor

Nancy Van Houten, Senior Auditor Evaluator

Frank O’Connor, Senior Program Analyst

Victor Taylor, Auditor

 

Appendix III

 

Report Distribution List

 

Commissioner  C

Office of the Commissioner – Attn:  Chief of Staff  C

Deputy Commissioner for Services and Enforcement  SE

Commissioner, Large Business and International Division  SE:LB

Commissioner, Small Business/Self-Employed Division  SE:S

Commissioner, Tax Exempt and Government Entities Division  SE:T

Commissioner, Wage and Investment Division  SE:W

Chief, Appeals  AP

Chief, Criminal Investigation  SE:CI

Chief Financial Officer  OS:CFO

Director, Communications, Liaison, and Disclosure, Small Business/Self-Employed Division  SE:S:CLD

Director, Strategy and Finance, Wage and Investment Division  SE:W:S

Chief, Performance Improvement, Wage and Investment Division  SE:W:S:PI

Chief Counsel  CC

National Taxpayer Advocate  TA

Director, Office of Legislative Affairs  CL:LA

Director, Office of Program Evaluation and Risk Analysis  RAS:O

Office of Internal Control  OS:CFO:CPIC:IC

Audit Liaisons:

Commissioner, Large Business and International Division  SE:LB

Commissioner, Small Business/Self-Employed Division  SE:S

Commissioner, Tax Exempt and Government Entities Division  SE:T

Commissioner, Wage and Investment Division  SE:W

Chief, Appeals  AP:TP:SS

Chief, Criminal Investigation  SE:CI

Chief Financial Officer  OS:CFO

National Taxpayer Advocate  TA

 

Appendix IV

 

Prior Audit Reports

 

The TIGTA has previously performed 13 audits in this subject area.  The audit reports are:

TIGTA, Ref. No. 2011-30-069, Fiscal Year 2011 Statutory Audit of Compliance With Legal Guidelines Restricting the Use of Records of Tax Enforcement Results (Jul. 2011).

TIGTA, Ref. No. 2010-30-076, Fiscal Year 2010 Statutory Audit of Compliance With Legal Guidelines Restricting the Use of Records of Tax Enforcement Results (Jul. 2010).

TIGTA, Ref. No. 2009-30-091, Fiscal Year 2009 Statutory Audit of Compliance With Legal Guidelines Restricting the Use of Records of Tax Enforcement Results (Jun. 2009).

TIGTA, Ref. No. 2008-40-108, Fiscal Year 2008 Statutory Audit of Compliance With Legal Guidelines Restricting the Use of Records of Tax Enforcement Results (Apr. 2008).

TIGTA, Ref. No. 2007-40-055, Fiscal Year 2007 Statutory Audit of Compliance With Legal Guidelines Restricting the Use of Records of Tax Enforcement Results (Mar. 2007).

TIGTA, Ref. No. 2006-40-095, Fiscal Year 2006 Statutory Audit of Compliance With Legal Guidelines Restricting the Use of Records of Tax Enforcement Results (Jun. 2006).

TIGTA, Ref. No. 2005-40-157, Fiscal Year 2005 Statutory Audit of Compliance With Legal Guidelines Restricting the Use of Records of Tax Enforcement Results (Sept. 2005).

TIGTA, Ref. No. 2004-40-066, Fiscal Year 2004 Statutory Audit of Compliance With Legal Guidelines Restricting the Use of Records of Tax Enforcement Results (Mar. 2004).

TIGTA, Ref. No. 2003-40-090, Fiscal Year 2003 Statutory Audit of Compliance With Legal Guidelines Restricting the Use of Records of Tax Enforcement Results (Mar. 2003).

TIGTA, Ref. No. 2002-40-163, Compliance With Regulations Restricting the Use of Records of Tax Enforcement Results Shows Improvement (Sept. 2002).

TIGTA, Ref. No. 2001-10-178, Compliance With the Internal Revenue Service Restructuring and Reform Act of 1998 Section 1204 Has Not Yet Been Achieved (Sept. 2001).

TIGTA, Ref. No. 2000-10-118, Further Improvements Are Needed in Processes That Control and Report Misuse of Enforcement Statistics (Sept. 2000).

TIGTA, Ref. No. 1999-10-073, The Internal Revenue Service Should Continue Its Efforts to Achieve Full Compliance with Restrictions on the Use of Enforcement Statistics (Sept. 1999).

 

Appendix V

 

Example of Form 1204-M, Manager’s Quarterly Self-Certification – No Violations

 

The Form was removed due to its size.  To see the form, please go to the Adobe PDF version of the report on the TIGTA Public Web Page

Source:  Internal forms on the IRS website.

 

Appendix VI

 

Management’s Response to the Draft Report

 

 

DEPARTMENT OF THE TREASURY

INTERNAL REVENUE SERVICE

WASHINGTON D. C. 20224

 

CHIEF FINANCIALOFFICER

 

July 18, 2012

 

 

MEMORANDUM FOR MICHAEL E. MCKENNEY

                ACTING DEPUTY INSPECTOR GENERAL FOR AUDIT

 

FROM:                            Pamela J. LaRue /s/ Pamela J. LaRue

    Chief Financial Officer

 

SUBJECT:                       Draft Audit Report - Fiscal Year 2012 Statutory Audit of Compliance with Legal Guidelines Restricting the Use of Records of Tax Enforcement Results (Audit# 201230009)

 

Thank you for the opportunity to review and respond to the draft audit report titled, "Fiscal Year 2012 Statutory Audit of Compliance with Legal Guidelines Restricting the Use of Records of Tax Enforcement Results" (Audit# 201230009).  We agree with the report language and its recommendation to continue our emphasis on training.

 

We are pleased with your acknowledgement that the IRS once again achieved full compliance with Section 1204(a), (b) and (c) requirements.  We are also pleased with your acknowledgment of our efforts in 1) ensuring that managers are not using ROTERS to evaluate employees or to suggest/impose production goals/quotas, 2) helping to protect the rights of taxpayers and 3) educating IRS managers and employees through ELMS training to understand the retention standard terminology.

 

If you have any questions, please contact Peter Rose, Associate Chief Financial Officer, Corporate Planning and Internal Control, at (202) 622-4508.

 

Attachment

Attachment

 

RECOMMENDATION 1

The Deputy Commissioner for Operations Support should strengthen the IRS's efforts to achieve full compliance with RRA 98 Section 1204 procedures by continuing the emphasis on training.  This effort could include expanding the training to, at least one hour by adding additional practice questions and more in-depth responses to incorrect answers to ensure the employees fully understand the training.

 

CORRECTIVE ACTION

The IRS agrees with this recommendation.  The CFO will evaluate its current ELMS Section 1204 training module and consider enhancing its program material, if appropriate, to ensure that IRS employees fully understand the training.

 

IMPLEMENTATION DATE

September 30, 2013

 

RESPONSIBLE OFFICIAL

Chief Financial Officer

 

CORRECTIVE ACTION MONITORING PLAN

N/A