Office of Audit
2019 Statutory Audit of Compliance With Legal Guidelines
Restricting the Use of Records of Tax Enforcement Results
Final Report issued September 4, 2019
Highlights of Reference Number: 2019-30-056 to the Commissioner of Internal Revenue.
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 or quotas. Use of ROTERs may create the misperception that safeguarding taxpayer rights is secondary to IRS enforcement results.
WHY TIGTA DID THE AUDIT
TIGTA is required under Internal Revenue Code Section 7803(d)(1) to annually determine whether the IRS complied with restrictions on the use of enforcement statistics to evaluate employees as set forth in RRA 98 Section 1204.
WHAT TIGTA FOUND
TIGTA found instances of noncompliance with RRA 98 Section 1204 requirements. From a sample, TIGTA identified instances of noncompliance with each of the following subsections of the law:
· Section 1204(b) – 27 instances in which 20 IRS managers failed to either maintain the retention standard documentation or ensure that it was appropriately signed and dated.
· Section 1204(c) – 32 instances in which 11 IRS managers did not properly certify in writing to the IRS Commissioner whether ROTERs and/or production quotas or goals were used in a prohibited manner.
TIGTA also identified 18 Code of Federal Regulations Section 430.206 policy violations in which four pertinent documents pertaining to Section 1204(b) were not signed and dated until the last 60 days of the rating period, and 14 pertinent documents pertaining to Section 1204(b) were signed and dated after the rating period ended.
Furthermore, 14 managers were missing from the Fiscal Year 2018 Section 1204 employee and manager list, and a total of 466 employees and managers did not complete or did not timely complete the mandatory Section 1204 training.
WHAT TIGTA RECOMMENDED
TIGTA recommended that the IRS ensure that the potential RRA 98 Sections 1204(b) and (c) violations identified in this report are discussed with the responsible managers; the managers identified in this report are notified to properly designate themselves as Section 1204 personnel; and the mandatory Section 1204 training is assigned and completed within 90 calendar days.
The IRS confirmed that the potential RRA 98 Sections 1204(b) and (c) violations identified in this report were discussed with the responsible managers. The IRS also responded that its Section 1204 Communication Plan includes outreach messages to all managers to ensure that Section 1204 managers are aware of the requirement to update HR Connect with the Section 1204 indicator.
The IRS did not agree to ensure that managers identified in this report understood Code of Federal Regulations Section 430.206 policy violations. In its response, the IRS stated that timeliness of receipt/acknowledgement and evaluation for the performance standard is not a Section 1204 requirement. TIGTA believes that a violation of these regulations impedes the IRS’s ability to comply with Section 1204(b). In order for the IRS to evaluate its employees in the proper manner, the employees need to know on what they are being evaluated, and the manager needs to provide documentation to employees regarding the standards for the appraisal.
READ THE FULL REPORT
To view the report, including the scope, methodology, and full IRS response, go to:
Phone Number / 202-622-6500
E-mail Address / TIGTACommunications@tigta.treas.gov
Website / https://www.treasury.gov/tigta