Reports

Pandemic Response Accountability Committee

Key Insights: Identity Fraud Reduction and Redress in Pandemic Response Programs

This Insights Report highlights identity fraud related challenges in federal programs during the COVID-19 pandemic. By evaluating previous oversight work in this space from members of the PRAC’s Identity Fraud Reduction and Redress Working Group, this report presents best practices to reduce identity fraud before it occurs and to assist victims of identity fraud if it does occur. These best practices may be helpful for federal agencies to utilize moving forward. This report also identifies that across the federal government there is a larger focus on reducing identity fraud up front, while...

Full Details: Oversight.gov Report Page

Treasury Inspector General for Tax Administration

Final Report – The IRS Leveraged Its Telework Program to Continue Operations During the COVID-19 Pandemic

Full Details: Oversight.gov Report Page

Treasury Inspector General for Tax Administration

Processing of Recovery Rebate Credit Claims During the 2021 Filing Season

Full Details: Oversight.gov Report Page

Audit | 5/19/2022

1 - Open

On June 15, 2021, we alerted IRS management of our concerns with the systemic calculation of the allowable RRC amount. We recommended that IRS management review the returns we identified and provide us with any corrective actions they intended to take.

10 - Open

Conduct analysis of Tax Year 2020 tax returns processed after May 27, 2021, to identify additional individuals who received an RRC for a qualifying child for which the IRS has already paid an EIP or an RRC to someone else and take the actions needed to recover RRC payments that are determined to be erroneous.

11 - Open

Review the 7,022 individuals identified in which the IRS issued multiple RRCs for a qualifying child who was claimed on more than one tax return and take the actions needed to recover payments that are determined to be erroneous.

12 - Open

Conduct analysis of Tax Year 2020 tax returns processed after May 27, 2021, to identify additional individuals who received an RRC for a qualifying child who was claimed on more than one tax return and take the actions needed to recover payments that are determined to be erroneous.

13 - Open

Review the 75,594 tax returns identified in which the individual is potentially a nonresident alien and take the actions needed to recover the RRC payments that are determined to be erroneous.

14 - Open

Perform analysis of Tax Year 2020 tax returns filed after May 27, 2021, to identify additional tax returns with the same characteristics as those the IRS determined were filed by a nonresident alien and take the actions needed to recover erroneous RRC payments.

15 - Open

The Commissioner, Wage and Investment Division, should coordinate with the Territories to confirm and recover erroneous RRCs.

16 - Closed

Review the nearly 6.9 million potentially eligible individuals we provided to the IRS who had not filed a Tax Year 2020 tax return as of May 27, 2021, and send a letter to those individuals who still have not filed a Tax Year 2020 return to encourage them to file a return and claim the RRC if eligible.

17 - Closed

Review the 3.1 million eligible individuals we identified who filed a Tax Year 2020 return and proactively issue these taxpayers their credit.

18 - Closed

Conduct additional analysis to identify tax returns filed after May 27, 2021, in which an individual is eligible for the RRC based on their Tax Year 2020 tax return and did not claim the credit, and proactively issue the taxpayer their credit.

19 - Closed

If IRS management does not proactively issue the RRC to individuals who filed a return and did not claim the credit, the IRS should notify these individuals that they are eligible to claim the RRC and should file an amended tax return to claim the credit.

2 - Open

On March 19, 2021, we alerted IRS management of our concerns that an incorrect amount of advance payments was being used to calculate the RRC for some taxpayers. We recommended that IRS management review the returns we identified and provide us with any corrective actions they intended to take.

20 - Open

Work with the BFS to ensure that individuals who were denied the RRC and have still not activated their EIP1 or EIP2 debit card as of December 31, 2021, have EIPs reversed in their tax account and are issued their RRC. These processes should include notifying Metabank that the debit cards in question are to be cancelled.

21 - Open

Work with the BFS to obtain recurring data during Processing Year 2022 to identify individuals who have not activated their advance ARPA RRC debit card at the time a return is filed and implement processes to reverse the advance payment so these individuals can receive the RRC on their Tax Year 2021 tax return.

22 - Open

We alerted the Commissioner, Wage and Investment Division, of our concerns that the IRS was unnecessarily burdening taxpayers whose RRC claims were identified for manual ERS review. We recommended the IRS develop processes to systemically adjust RRC claims using the computer-generated RRC calculation.

3 - Open

On April 6, 2021, we alerted IRS management of our concerns regarding ERS tax examiners incorrectly computing the RRC (see management’s action in response to Recommendation 1). We recommended the IRS review the returns we identified and take the actions necessary to ensure that these taxpayers receive the amount of the RRC
they are entitled to receive.

4 - Open

On March 12, 2021, we alerted IRS management of our concerns that some tax returns were not being identified by fraud filters. We recommended IRS management review the returns we identified and associated fraud filters to identify why these returns were not selected and make programming changes as necessary to ensure proper
identification of returns with potentially questionable claims.

5 - Open

Conduct analysis to identify Tax Year 2020 RRC claims processed after May 27, 2021, to identify other returns in which ERS tax examiners incorrectly calculated the number of allowable dependents and returns that were not reprocessed per IRS guidance after programming was corrected, and ensure that these taxpayers receive the correct amount of the RRC.

6 - Open

Review the 14,508 individuals identified in which the IRS issued an RRC to an individual who was claimed as a dependent on someone else’s tax return but did not check the dependent box and take the actions needed to recover payments that are determined to be erroneous.

7 - Open

Conduct analysis of Tax Year 2020 tax returns processed after May 27, 2021, to identify additional individuals who received an RRC and were also claimed as a dependent on someone else’s tax return but did not check the dependent box, and take the actions needed to recover the RRC payments that are determined to be erroneous.

8 - Open

Review the 238,680 individuals under the age of 25 identified as potential dependents and take the actions needed to recover payments that are determined to be erroneous.

9 - Open

Review the 15,741 individuals identified in which the individual incorrectly received an RRC and an EIP for the same qualifying child and take the actions needed to recover RRC payments that are determined to be erroneous.

Treasury Inspector General for Tax Administration

The Child Tax Credit Update Portal Was Successfully Deployed, but Security and Process Improvements Are Needed

Full Details: Oversight.gov Report Page

Treasury Inspector General for Tax Administration

The Child Tax Credit Update Portal Was Successfully Deployed, but Security and Process Improvements Are Needed

Full Details: Oversight.gov Report Page

Treasury Inspector General for Tax Administration

Continued Assessment of IRS's Efforts to Address the Backlog During Filing Season 2022

TIGTA is initiating a review to assess the IRS's actions to address the backlog of unworked returns and inventories during Filing Season 2022. This will include evaluating: progress to ensure that the Tax Processing Centers are adequately staffed to meet workload demands; effectiveness of the Submission Processing function’s Inventory Reduction Teams in addressing backlogged inventories; effectiveness of management in identifying and implementing process improvements to increase efficiency of tax processing and reduce taxpayer burden; and, impact on the IRS’s Files Management function due to the closures of and limited staffing at the Federal Record Centers.

Treasury Inspector General for Tax Administration

American Rescue Plan Act Advance Child Tax Credit Tax Filing Reconciliation for Individuals

TIGTA is initiating a review of the reconciliation of the advance Child Tax Credit (CTC) payments made to individuals during CY 2021 as part of the American Rescue Plan Act. TIGTA will assess the following: accuracy of the IRS's outreach and assistance to individuals regarding the reconciliation of the advance CTC payments on TY 2021 tax returns; updates to the business rules relating to CTC, ACTC, and Credits for Other Dependents and changes made to the error resolution codes to ensure they are functioning as intended; the processing of tax returns to ensure that the IRS is properly calculating the CTC and applying Safe Harbor rules; the IRS's processes and procedures to address taxpayer accounts with advance CTC payment reversals since the issuance of the Letter 6419; and, the IRS's fraud filters and compliance plans to determine if there are adequate controls to identify potentially erroneous CTC claims.

Treasury Inspector General for Tax Administration

Continued Review of Premium Tax Credit Rules under the American Rescue Plan Act

TIGTA is initiating a review to assess the IRS's actions to implement legislative changes to the Premium Tax Credit (PTC) made by the American Rescue Plan Act of 2021. The overall objective is to assess the adequacy of processes and procedures to ensure expanded PTC eligibility requirements are met prior to credits being allowed. TIGTA plans to ensure forms and publications have been updated, assess the accuracy of the processing of PTC claims during 2022, ensure that individuals who can claim additional child tax credit due to the Advance PTC adjustment receives appropriate notices, and assess the current process to help taxpayers who report on the PTC form that they are a victim of domestic violence.

Treasury Inspector General for Tax Administration

Reconciliation of the American Rescue Plan Act Recovery Rebate Credit During the 2022 Filing Season

TIGTA is initiating a review to evaluate the effectiveness of the Internal Revenue Service’s reconciliation of advance payments issued and Recovery Rebate Credit (RRC) claims during the 2022 Filing Season. The overall objective of this audit is to assess the processing of the RRC claims during the 2022 Filing Season, including ensuring that taxpayers properly reconcile advanced payments received during CY 2021. Specifically TIGTA will assess the IRS's outreach and assistance to individuals regarding RRC. Ensure the RRC computed by the IRS is accurate and TY 2021 tax returns with an RRC claim are processed correctly. Ensure eligible individuals who did not receive their advance ARPA payments receive the correct RRC amounts. And, determine whether the IRS took sufficient actions to prevent ineligible individuals from receiving erroneous RRC.

Treasury Inspector General for Tax Administration

Program and Organizational Changes Are Needed to Address the Continued Inadequate Tax Account Assistance Provided to Taxpayers

Full Details: Oversight.gov Report Page

Audit | 3/18/2022

1 - Open

On September 20, 2021, we notified the Director, Accounts Management, that the Austin site was not requiring Accounts Management screeners to come into the office to perform their duties, resulting in a significant backlog and delays in inventory being routed to Accounts Management to be worked. We recommended that the IRS establish consistent guidance and clarification on when resources can be directed to the office to help with screening inventory, to ensure that sufficient staff is available to screen documents in a timely manner, and establish processes to monitor the progress,

10 - Closed

The Commissioner, Wage and Investment Division, should update existing scanning software or obtain a new scanning software to
address document capacity concerns.

11 - Open

The Commissioner, Wage and Investment Division, should ensure that programming is updated to systemically reject electronic
submissions of Forms 2848 and 8821 when missing one of the five essential elements (name, address, signature, etc.) without manually mailing a rejection letter.

12 - Open

The Commissioner, Wage and Investment Division, should ensure that the rejection letter used for Forms 2848 and 8821 is updated
to include language that a revised form can be submitted electronically via an IRS Tax Pro Account25 or through Taxpayer Digital Communication.

13 - Open

The Commissioner, Wage and Investment Division, should develop an action plan to prioritize the continued expansion of documents that can be sent in via electronic fax and converted into a Correspondence Imaging System (CIS) image.

14 - Open

The Commissioner, Wage and Investment Division, should Identify priority work that needs to be expedited by the Image Control Team (ICT) and assess the feasibility of creating an electronic fax number to receive this inventory.

15 - Open

On July 12, 2021, TiGTA notified the Director, Accounts Management, of concerns regarding inaccuracies as it related to the compiling and reporting of the Accounts Management Inventory Report (AMIR). TIGTA recommended that the IRS perform a reconciliation of each Accounts Management site’s AMIR to the source reports to identify inventory inconsistencies and reporting errors by site

16 - Open

The Commissioner, Wage and Investment Division, should complete the inventory reconciliations for the four remaining Accounts
Management site’s to identify and correct inventory inaccuracies and inconsistencies and implement processes to provide oversight by periodically performing reconciliations for each site so that any future inconsistencies and errors are identified and corrected in a timely manner.

17 - Open

The Commissioner, Wage and Investment Division, should develop specific and detailed instructions for preparing the Accounts Management Inventory Report (AMIR), including how controlled and uncontrolled inventory should be captured

18 - Open

The Commissioner, Wage and Investment Division, should develop a process to systemically pull all controlled inventory for each
Accounts Management site for the Accounts Management Inventory Report (AMIR) to ensure consistency, reduce human error, and
increase efficiencies

19 - Closed

The Commissioner, Wage and Investment Division, should modify Accounts Management inventory reporting to report unassigned
controlled inventory separately on the nationwide Accounts Management Inventory Report (AMIR) and limit the site-specific AMIRs to only
the inventory assigned to be worked in each site.

2 - Closed

The Commissioner, Wage and Investment Division, should evaluate directing taxpayers to send tax account correspondence and
replies intended for Accounts Management directly to Campus Support Sites for processing to reduce backlogs at Tax Processing Centers and improve services to taxpayers.

3 - Open

The Commissioner, Wage and Investment Division, should prioritize the development and implementation of tools that will enable
taxpayers seeking assistance or responding to Accounts Management to correspond with the IRS electronically, including the ability to directly upload documents into Accounts Management’s inventory.

4 - Open

The Chief Taxpayer Experience Officer, in conjunction with the Director, IRS NEXT Office, should evaluate establishing two distinct IRS programs as part of the IRS reorganization under the Taxpayer First Act – one dedicated to answering toll-free telephone calls and one dedicated to working Accounts Management inventory – with adequate staffing to provide appropriate service to taxpayers using each channel.

5 - Open

On June 9, 2021, we notified the Director, Customer Account Services, that Submission Processing requested resources from Accounts Management to assist with clearing the Image Control Team (ICT) backlog and was told by Campus Support management that no resources could be made available to assist with reducing the ICT backlog. We recommended that the IRS assess the availability of Campus Support’s ICT staffing or other resources that could be made available to assist with clearing the ICT backlogs at Tax Processing Centers.

6 - Open

On September 3, 2021, we notified the Director, Accounts Management, of concerns relating to the newly stood-up Fresno Campus Support Site, including scanners not being used to the full extent possible. We recommended that IRS management provide us with it plans to address our concerns identified with the new Fresno Campus Support Site, including additional staffing to assist Image Control Team (ICT).

7 - Open

The Commissioner, Wage and Investment Division, should complete a strategic review of all 10 Image Control Team (ICT) sites to determine what contributes to the ICT’s inability to timely scan and validate documents. Based on the results of this review, initiate steps to address the concerns identified. This should include the development of an action plan to ensure that the high-capacity ICT scanners and staffing are realigned to the appropriate sites based on actual or expected inventory levels and that responsibility of the ICT operations are consolidated under the appropriate function.

8 - Open

The Commissioner, Wage and Investment Division, should cross-train additional mail clerks at Campus Support Sites to work Image Control Team (ICT) validations, freeing up additional resources in sites with higher inventories needing to be scanned, or consider shipping inventory to sites with less inventory to be scanned.

9 - Open

The Commissioner, Wage and Investment Division, should develop specific instructions and a common template for all 10 Image Control Team (ICT) sites to consistently capture ICT inventory information.

Date Range

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State (State and Local Reports)

Agency Reviewed

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Management Challenges

Any Recommendations

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Reports

Key Insights: Identity Fraud Reduction and Redress in Pandemic Response Programs

Final Report – The IRS Leveraged Its Telework Program to Continue Operations During the COVID-19 Pandemic

Processing of Recovery Rebate Credit Claims During the 2021 Filing Season

The Child Tax Credit Update Portal Was Successfully Deployed, but Security and Process Improvements Are Needed

The Child Tax Credit Update Portal Was Successfully Deployed, but Security and Process Improvements Are Needed

Continued Assessment of IRS's Efforts to Address the Backlog During Filing Season 2022

American Rescue Plan Act Advance Child Tax Credit Tax Filing Reconciliation for Individuals

Continued Review of Premium Tax Credit Rules under the American Rescue Plan Act

Reconciliation of the American Rescue Plan Act Recovery Rebate Credit During the 2022 Filing Season

Program and Organizational Changes Are Needed to Address the Continued Inadequate Tax Account Assistance Provided to Taxpayers