Treasury Inspector General for Tax Administration
June 21, 2011
TIGTA - 2011-30
Contact: Karen Kraushaar
WASHINGTON The Internal Revenue Service (IRS) educates its employees on their tax responsibilities, yet it is unable to detect whether all IRS employees are complying with the law, according to a new audit report released publicly today by the Treasury Inspector General for Tax Administration (TIGTA).
While the IRS electronically matches its employee payroll records with tax account records maintained for all taxpayers, it does not detect all potential noncompliance, TIGTA auditors found.
TIGTA identified 133 potentially noncompliant employees who were not detected by the IRS’s computer application over a two-year period. As a result, no action was taken by the IRS to analyze and address this potential employee misconduct for noncompliance with tax laws.
“To maintain public confidence in the agency entrusted to administer the Nation’s tax law system, the IRS must ensure that potential misconduct concerning noncompliance with the tax laws is identified and addressed,” said J. Russell George, the Treasury Inspector General for Tax Administration.
In addition, TIGTA determined the IRS significantly reduced the focus of its Employee Tax Compliance Program partially based on a study it conducted showing that IRS employees were more compliant compared to the general taxpaying public. IRS reports show that about 3 percent of IRS employees are noncompliant each year. TIGTA’s audit concurred with the IRS’s decision to use resources as efficiently as possible, however, the report concluded that the IRS should periodically reevaluate the ETC program’s direction to ensure proper oversight of employees’ compliance with their tax obligations.
TIGTA made four recommendations in its report, including that the IRS should determine whether disciplinary action is warranted in the cases of the 133 potentially noncompliant employees it found. The IRS agreed to work the additional cases, review its computer application, and revise the goals and mission of the program, but it stated that it had no plans to develop new noncompliance detection efforts to specifically monitor IRS employee tax compliance because it believes the current noncompliance detection processes used for all taxpayers (including IRS employees) are sufficient in number and appropriate in scope.
Read the report, including the scope, methodology, and full IRS response.
A special plugin is required to view PDF documents. To obtain the free PDF reader, please visit the Adobe web site.