TREASURY INSPECTOR GENERAL FOR TAX ADMINISTRATION

Office of Audit

Highlights

Fiscal Year 2016 Statutory Review of Compliance with the Freedom of Information Act

Final Report issued on September 1, 2016

Highlights of Reference Number:  2016-30-072 to the Internal Revenue Service Director, Privacy, Governmental Liaison and Disclosure.

IMPACT ON TAXPAYERS

The IRS must ensure that the provisions of the Freedom of Information Act (FOIA) and Internal Revenue Code (I.R.C.) Section (§) 6103 are continually followed.  Errors can violate taxpayer rights and result in improper disclosures of taxpayer information.

WHY TIGTA DID THE AUDIT

TIGTA is required to conduct periodic audits to determine whether the IRS properly denied written requests for taxpayer information pursuant to the FOIA exemption 5 United States Code (U.S.C.) § 552(b)(7) and I.R.C. § 6103.  The overall objective of this audit was to determine whether the IRS improperly withheld information requested by taxpayers in writing based on the FOIA exemption 5 U.S.C. § 552(b)(7) or I.R.C. § 6103 or by replying that responsive records were not available or did not exist.  This included determining whether these requests were processed timely and whether the IRS erroneously disclosed sensitive taxpayer information when responding to written FOIA or I.R.C. § 6103 information requests.

TIGTA also evaluated the processing of I.R.C. § 6104 information requests in the Tax Exempt and Government Entities Division related to applications for tax-exempt status and information returns to determine whether the requested information was appropriately provided or if sensitive information was erroneously disclosed.

WHAT TIGTA FOUND

TIGTA reviewed a statistically valid sample of 60 information requests from a population of 2,720 FOIA requests and found seven (11.7 percent) in which taxpayer rights may have been violated.  Although the IRS properly released thousands of pages from these documents, taxpayer rights may have been violated because these information requests had some information erroneously withheld.  In addition, TIGTA selected a statistically valid sample of 55 I.R.C. § 6103 information requests and found that the IRS adequately provided information to the requestors in all of the requests reviewed.

Even though the number of backlogged FOIA requests increased for the third straight year, TIGTA found that responses to all sampled FOIA requests were timely.  While there are no statutory time frames within which the IRS must respond to taxpayers’ I.R.C. § 6103 information requests, the IRS requires disclosure specialists to provide a status report to the requestors if their requests are not completed within 30 business days.  For nine (16.4 percent) of the 55 I.R.C. § 6103 information requests reviewed, the IRS took more than 30 business days to provide a status report to the requestor.  According to the IRS, the cases TIGTA identified in which the requestors were not timely informed of the status of their requests could have resulted from an oversight by the caseworkers when completing their reviews.

Additionally, disclosure specialists inadvertently disclosed sensitive taxpayer information in two instances when responding to FOIA requests.  Lastly, based on a judgmental sample of 19 I.R.C. § 6104 information requests received by the Tax Exempt and Government Entities Division, TIGTA found that the information requests were processed timely and did not find any sensitive information that was inadvertently disclosed.

WHAT TIGTA RECOMMENDED

TIGTA made no recommendations in this report.  However, key IRS officials reviewed this report prior to its issuance and agreed with the facts and conclusions presented.

READ THE FULL REPORT

To view the report, including the scope, methodology, and full IRS response, go to:

http://www.treasury.gov/tigta/auditreports/2016reports/201630072fr.pdf.

 

Phone Number   /  202-622-6500

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

Website             /  https://www.treasury.gov/tigta