Treasury Inspector General for Tax Administration
September 4, 2014
TIGTA - 2014-21
Contact: David Barnes
WASHINGTON -- The Internal Revenue Service (IRS) is not processing complaints against tax preparers in a timely manner, according to a report publicly released today by the Treasury Inspector General for Tax Administration (TIGTA).
The IRS processed about 77 million individually electronically filed (e-filed) Federal income tax returns prepared by paid tax return preparers in 2013.
Identifying problem preparers through the complaint process is an essential component of the IRS’s oversight responsibilities. Therefore, the IRS developed processes and procedures through which taxpayers can file a complaint with the IRS.
The overall objective of this audit was to determine whether the IRS’s tax return complaint process is effective.
TIGTA’s review of the 8,354 complaints against preparers received by the IRS between October 1, 2012 and September 11, 2013 identified 3,953 (47 percent) for which work on the complaints had yet to be initiated. Of the 3,953 complaints, 1,920 (49 percent) had been in the IRS’s inventory for at least 60 business days with no work initiated.
In addition, IRS processes do not ensure that complaints are accurately and consistently processed. Further, processes have not been established to effectively track complaint referrals to IRS business functions to ensure that the complaints are received for evaluation and track how the referred complaints are ultimately resolved.
“Tax return preparers play an increasingly important role in helping taxpayers to comply with the tax laws,” said J. Russell George, Treasury Inspector General for Tax Administration. “Unqualified or unethical tax return preparers can negatively impact taxpayers as well as tax revenue if the tax returns they prepare are incorrect and/or fraudulent.”
TIGTA made eight recommendations to the IRS, including that it establish goals and procedures to ensure that complaints are timely processed; develop a process to ensure that complaints are recorded in inventory records; ensure that criteria for referring complaints to business functions are appropriately applied and that the business functions’ resolution of complaint referrals is tracked; and establish procedures to contact taxpayers for missing information.
IRS management agreed with six of TIGTA’s recommendations and plans to take corrective actions. With respect to the recommendation with which IRS management partially agreed and the other with which IRS management disagreed, TIGTA continues to believe that the IRS should track how the business functions resolve referred complaints.
Read the report.
Note: The difference between the date TIGTA issues an audit report to the Internal Revenue Service and the date TIGTA publicly releases the report is due to TIGTA's internal review process to ensure that public release is in compliance with Federal confidentiality laws.
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