INSPECTOR GENERAL

February 3, 2010

The Honorable J Russell George

Inspector General Treasury Inspector General for Tax Administration

1125 15^th St. NW, Suite 700

Washington, D.C. 20005

Subject: System Review Report on the External Peer Review of the Treasury Inspector General for Tax Administration Audit Organization

Dear Mr. George:

Attached is the final System Review Report for the Inspector General for Tax Administration audit organization. We conducted this review in accordance with the Government Auditing Standards and the Council of the Inspectors General on Integrity and Efficiency guidelines. Your response did not have any comments to the draft report as indicated in enclosure 2.

We thank you and all your staff that we dealt with for your assistance and cooperation during the conduct of the review.

                                                                                                         Sincerely,

                                                                                                         /s/ Bill A. Roderick

                                                                                                          Bill Roderick

                                                                                                          Acting Inspector General

                                                                                                          U.S. Environmental Protection Agency

Attachment

cc: Preston Benoit

     Director, Office of Management and Policy Office of Audit

     Treasury Inspector General for Tax Administration

UNITED STATES ENVIRONMENTAL PROTECTION AGENCY

INSPECTOR GENERAL

System Review Report

February 3, 2010

The Honorable J. Russell George

Inspector General Treasury Inspector General for Tax Administration

We have reviewed the system of quality control for the audit organization of Treasury Inspector General for Tax Administration (TIGTA) in effect for the year ended March 31, 2009. A system of quality control encompasses TIGTA's organizational structure and the policies adopted and procedures established to provide it with reasonable assurance of conforming with Government Auditing Standards. The elements of quality control are described in Government Auditing Standards. TIGTA is responsible for designing a system of quality control and complying with it to provide the Internal Revenue Service (IRS) with reasonable assurance of performing and reporting in conformity with applicable professional standards in all material respects. Our responsibility is to express an opinion on the design of the system of quality control and TIGTA's compliance therewith based on our review.

Our review was conducted in accordance with Government Auditing Standards and guidelines established by the Council of the Inspectors General on Integrity and Efficiency (CIGIE). During our review, we interviewed TIGTA personnel and obtained an understanding of the nature of the TIGTA audit organization, and the design of the TIGTA's system of quality control sufficient to assess the risks implicit in its audit function. Based on our assessments, we selected engagements and administrative files to test for conformity with professional standards and compliance with the TIGTA's system of quality control. The engagements selected represented a reasonable cross-section of the TIGTA's audit organization, with emphasis on higher-risk engagements. Prior to concluding the review, we reassessed the adequacy of the scope of the peer review procedures and met with TIGTA management to discuss the results of our review. We believe that the procedures we performed provide a reasonable basis for our opinion.

In performing our review, we obtained an understanding of the system of quality control for the TIGTA's audit organization. In addition, we tested compliance with the TIGTA's quality control policies and procedures to the extent we considered appropriate. These tests covered the application of the TIGTA's policies and procedures on selected engagements. Our review was based on selected tests; therefore, it would not necessarily detect all weaknesses in the system of quality control or all instances of noncompliance with it.

There are inherent limitations in the effectiveness of any system of quality control and therefore noncompliance with the system of quality control may occur and not be detected. Projection of any evaluation of a system of quality control to future periods is subject to the risk that the system of quality control may become inadequate because of changes in conditions, or because the degree of compliance with the policies or procedures may deteriorate.

Enclosure 1 to this report identifies the offices of the TIGTA A that we contacted and the engagements that we reviewed.

In our opinion the system of quality control for the audit organization of TIGTA in effect for the year ended March 31, 2009, has been suitably designed and complied with to provide TIGTA with reasonable assurance of performing and reporting in conformity with applicable professional standards in all material respects. Federal audit organizations can receive a rating of pass, pass with deficiencies, or fail. TIGTA has received a peer review rating of pass.

As is customary, we have also issued a letter that sets forth a finding that was not considered to be of sufficient significance to affect our opinion expressed in this report.

Bill A. Roderick /s/ Bill A. Roderick

Acting Inspector General

U.S. Environmental Protection Agency

Enclosures

We contacted the Atlanta, GA; Kansas City, KS; Brookhaven, NY; Chicago, IL; Cincinnati, OH; Dallas, TX; Denver, CO; Philadelphia, PA; Ogden, UT; Baltimore, MD; and Washington, DC offices of TIGTA.

TIGTA Engagements Reviewed