Review of Social Security Tax Deferral Repayment
TIGTA is initiating a review to evaluate the IRS's efforts to ensure that taxpayers repay their deferred Social Security taxes as required. TIGTA plans to evaluate whether accurate reminder notices were sent to taxpayers who deferred their Social Security tax during Tax Year 2020, whether taxpayers made their required repayment of deferred Social Security taxes by December 31, 2021, and whether appropriate penalties and interest were assessed on taxpayers who did not timely repay their deferred Social Security tax.
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.
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.
Federal Student Aid's Processes for R2T4 Waivers Loan Cancellations and Pell Exclusions
The purpose of the audit is to determine whether Federal Student Aid has adequate processes (1) for students who withdrew because of the coronavirus pandemic, to waive the return of Title IV (R2T4) requirements, cancel Direct Loans received during the payment period, and exclude Pell Grants received during the payment period from Federal Pell lifetime usage; and (2) for schools to report the number and amounts of R2T4 waivers applied.
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.
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.
Expansion of Earned Income Tax Credit and Child and Dependent Care Credit Eligibility Requirements
TIGTA is initiating a review of the IRS's processes and procedures to ensure that the expanded EITC and CDCC eligibility requirements are met prior to tax credits being allowed. It plans to determine if the IRS is appropriately rejecting incorrect/incomplete Schedule EIC claims for childless EITC and incorrect/incomplete forms claiming child and dependent care expenses, and preventing incorrect tax returns from processing with these claims. TIGTA will also evaluate the action taken by the IRS to address processing weaknesses identified during a previous audit to determine if the IRS is preventing erroneous CDCC claims.
The Department’s Use of Pandemic Assistance Administration Funds
The objective of our review is to determine the Department’s progress on spending program administration funds authorized by coronavirus response and relief laws, including how those funds have been used to date and the Department’s plans for using remaining funds.