The Treasury Inspector General for Tax Administration (TIGTA) recently released a report finding that the Internal Revenue Service (IRS) has failed to notify the majority of individuals they found to be victims of employment identity theft. When an identity thief uses another individual's information to obtain employment, the victim may have taxes computed based on income they did not personally earn, and may experience other difficulties. The IRS has a computer-based process to notify victims of the issue, but due to a programming error related to a decision to notify only newly identified victims, the IRS failed to notify over 450,000 individuals for processing year 2017. In addition, over 15,000 individuals who did receive notice (13.5 percent of the total group notified) were not actually victims of employment identity theft.
The Internal Revenue Service (IRS) and the Treasury Inspector General for Tax Administration (TIGTA) have already issued warnings for the new tax filing season regarding individuals who impersonate IRS employees and demand money from taxpayers. Since October 2013, TIGTA has received reports of threatening phone calls made by scammers in every U.S. state. California taxpayers have been most affected by this type of scam, losing over $10 million to this crime.
The Treasury Inspector General for Tax Administration (TIGTA) recently released its Semiannual Report to Congress for the period April 1, 2017 through September 30, 2017. TIGTA provides oversight for Internal Revenue Service (IRS) activities and Federal tax administration. During the most recent period, TIGTA conducted 61 audits and over 1,400 investigations into issues involving tax fraud, identity theft, and other taxpayer-related issues.
Sometimes when a taxpayer does not file a tax return, the IRS will estimate the amount owed and prepare a Substitute for Return (SFR). More specifically, IRS computers prepare the SFRs based on information the IRS receives from third parties, such as Forms W-2 and 1099. The IRS would then issue a letter to the taxpayer regarding the proposed deficiency with penalties added for late filing and late payment. Taxpayers could respond with information about deductions, credits, or errors and discuss the proposed deficiency with an IRS employee.
The Treasury Inspector General for Tax Administration (TIGTA) recently audited the Sustaining Infrastructure Program of the Internal Revenue Service (IRS) and found that, since 2013, the percentage of information technology hardware the IRS is using that is beyond its useful life has increased from 40% to its current rate of 64%. Aged hardware is more likely to fail, negatively impacting employee productivity, information security, and customer service.
Ordinarily, the taxpayer has the burden of proving a tax return is accurate. But when the IRS has to produce documents, its record-keeping practices are lacking. The Treasury Inspector General for Tax Administration (TIGTA) released a report on July 13, 2017, that found that the IRS' electronic record retention policies do not comply with certain Federal requirements that records remain retrievable and usable for the time period needed. For example, e-mail messages are not automatically archived for all IRS employees, and the manual methods used to counteract this gap are inadequate when computer hard drives are destroyed or damaged as media storage policies and tools change.
The Treasury Inspector General for Tax Administration (TIGTA) has released its semi-annual report to Congress for the period October 1, 2016 through March 31, 2017. The reports summarizes data about the agency's notable audits, investigations, inspections, and evaluations to provide oversight to the IRS.
On April 25, 2017, eight suspects were arrested in Miami, Florida, by agents of the Treasury Inspector General for Tax Administration (TIGTA) and the Social Security Administration Office of the Inspector General (SSAOIG) for conspiracy to commit wire fraud. The indictments against these individuals include charges for involvement in schemes to impersonate IRS agents in order to obtain money from victims by falsely representing that the victims owed back taxes or other fees. The suspects allegedly defrauded over 7,000 victims out of almost $8.8 million.
The Treasury Inspector General for Tax Administration (TIGTA) is recommending that the IRS expand the criteria used to refer potential criminal cases for investigation for certain employers that fail to remit payroll taxes to the IRS. TIGTA found that tax noncompliance in employment tax matters is growing, and as of December 2015 the IRS is owed nearly $46 billion in unpaid employment taxes, interest, and penalties.
On January 31, 2017, the Treasury Inspector General for Tax Administration (TIGTA) released its final report on the results of the 2016 tax filing season. As of early May 2016, the IRS had received 139.6 million individual tax returns, over 88% of which were filed electronically. Almost $277 billion was issued related to 101 million refunds. However, TIGTA identified several areas in which claims and credits were inadequately substantiated.