Treasury Inspector General for Tax Administration
August 6, 2015
TIGTA - 2015-22
Contact: David Barnes
WASHINGTON -- The Internal Revenue Service (IRS) does not have effective processes or procedures to ensure the authenticity of copies of documents certified by a foreign issuing agency in support of an application for an Individual Taxpayer Identification Number (ITIN).
That is the conclusion of a new report publicly released today by the Treasury Inspector General for Tax Administration (TIGTA).
This audit was initiated because TIGTA received an IRS employee complaint referred from a Member of Congress alleging that the IRS’s ITIN application processes and procedures do not ensure that documents certified by a foreign issuing agency are authentic.
An ITIN is issued to individuals who are required to have a Taxpayer Identification Number for tax purposes but do not have and are not eligible to obtain a Social Security Number. ITINs are issued regardless of an individual’s immigration status, as both resident and nonresident aliens may have a U.S. filing or reporting requirement under the Internal Revenue Code. In Calendar Year 2014, the IRS issued 638,000 ITINs.
TIGTA’s review substantiated the IRS employee’s complaint. Tax examiners do not have the tools nor the expertise needed to authenticate copies certified by foreign issuing agencies. Apart from not having tools to verify these documents, the processes and procedures the IRS has developed do not provide reasonable assurance that ITINs are not being issued based on false documentation.
“Authenticating documents certified by foreign issuing agencies is critical to the IRS’s ability to verify the identities and foreign status of individuals before assigning them ITINs, processing associated tax returns, and issuing refunds,” said J. Russell George, Treasury Inspector General for Tax Administration.
TIGTA recommended that the Commissioner, Wage and Investment Division, provide tax examiners with reference materials that can be used to verify the authenticity of copies of documents certified by a foreign issuing agency. In addition, the IRS should develop detailed procedures and deliver adequate training on verifying the authenticity of copies of documents certified by a foreign issuing agency.
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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