Treasury Inspector General for Tax Administration
August 24, 2010
TIGTA - 2010-45
Contact: Karen Kraushaar
WASHINGTON - The Internal Revenue Service (IRS) generally processed the initial requests for payment of the Build America Bond Federal subsidies accurately, timely, and without indications of fraudulent or erroneous disbursement, according to a new audit report publicly released today by the Treasury Inspector General for Tax Administration (TIGTA).
The Build America Bonds program was created by the American Recovery and Reinvestment Act of 2009 (Recovery Act), and allowed the Federal Government to partially offset State and local governments' cost of paying bond interest. TIGTA assessed whether the IRS's Tax Exempt Bonds office developed and implemented controls to assure the direct subsidies for Build America Bonds were accurate and timely and whether controls prevented disbursement of erroneous subsidy payments.
TIGTA reviewed more than $110 million in direct subsidy payments for the initial 80 bond issuances requesting subsidy payments. Controls and procedures developed and implemented by the IRS assured that all 80 Federal subsidy payments were accurate.
"We found no indications of fraudulent or erroneous disbursements in the 80 initial Federal subsidy payments that the IRS processed," said J. Russell George, the Treasury Inspector General for Tax Administration. "The IRS effectively designed preventive controls to reduce the chances of fraudulent or erroneous disbursements."
TIGTA did not make any recommendations in this report. IRS officials reviewed the report and agreed with TIGTA's findings.
To view the report, including the scope, methodology, and full IRS response, go to: http://www.treas.gov/tigta/auditreports/2010reports/201011083fr.pdf.
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