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Tigta Semiannual Report to Congress Treasury Inspector General for Tax Administration Semiannual Report to Congress October 1, 2019 – March 31, 2020 Treasury Inspector General for Tax Administration (TIGTA) TIGTA’s Vision Maintain a highly skilled, proactive, and diverse Inspector General organization dedicated to working in a collaborative environment with key stakeholders to fos ter and promote fair tax administration. TIGTA’s Mission Provide quality, professional audit, investigative, and inspection and evaluation ser vices that promote integrity, economy, and efficiency in the administration of the Nation’s tax system. TIGTA’s Core Values Integrity – Maintain the highest professional standards of integrity, personal responsibility, independence, objectivity, and operational excellence in pursuit of TIGTA’s mission. Organizational Innovation – Pursue innovative practices in organizational structure, operational programs and processes, audit, investigative, and inspection and evaluation methodologies, and the application of advanced information technology. Communication – Achieve effective organizational approaches and solutions by encouraging open, honest, and respectful communication among TIGTA’s executives, employees, offices, and functions, as well as between TIGTA and its external stakeholders. Value Employees – Respect the dignity, contributions, and work-life balance of our employees, and recognize diversity as fundamental to the strength of our organization. Commitment to Collaboration – Establish and maintain collaborative and professional relationships with other Government and non-Government stakeholders. Treasury Inspector General for Tax Administration Semiannual Report to Congress October 1, 2019 – March 31, 2020 This Treasury Inspector General for Tax Administration’s (TIGTA) Semiannual Report to Congress (SAR) is dedicated to the memory of John F. Zimmerman, Jr. TIGTA’s SAR Program Coordinator TIGTA SEMIANNUAL REPORT TO CONGRESS Inspector General’s Message to Congress I am pleased to present this Semiannual Report to Congress, summarizing the accomplishments of the Treasury Inspector General for Tax Administration (TIGTA) during the period October 1, 2019 through March 31, 2020. This report summarizes some of TIGTA’s more noteworthy audits, investigations, and inspections and evaluations conducted during this reporting period in the pursuit of our steadfast commitment to providing oversight of the Internal Revenue Service (IRS) and protecting the integrity of Federal tax administration. During this reporting period, TIGTA’s Office of Audit has completed 18 audits, and its Office of Investigations has completed 1,257 investigations. In addition, TIGTA’s combined audit and investigative efforts have resulted in the recovery, protection, and identification of monetary benefits totaling more than $2.25 billion. On July 1, 2019, the Taxpayer First Act of 2019 was signed into law. This legislation aims to expand and strengthen taxpayer rights and to reform the IRS into a more taxpayer-friendly agency by requiring it to develop a comprehensive customer service strategy, modernize its technology, and enhance its cybersecurity systems and programs. One of TIGTA’s main areas of current emphasis, as reflected by an audit report described in these pages, is oversight of the IRS’s efforts to improve security over taxpayer data and to protect IRS resources. TIGTA is working with the IRS to identify, investigate, and combat threats to its cyberinfrastructure, focusing especially on how the IRS ensures that only authorized taxpayers can access their information on public-facing applications. Similarly, TIGTA continues to investigate and deter high-profile attacks against online IRS applications, as part of its responsibility for investigating and deterring tax-related cybercrime and disrupting cyber- based schemes by illicit actors who seek to steal identifiers and impersonate taxpayers and IRS employees. Like other Federal agencies, the IRS is being dramatically impacted by the novel coronavirus disease (COVID-19). TIGTA will review the actions IRS is taking to protect the health and safety of its employees and the taxpaying public. TIGTA will also assess the impact of the extension of deadlines for payments of taxes and the IRS’s ability to provide customer service, conduct examinations, and collect revenue. TIGTA’s Office of Investigations continues to work with the IRS to prevent and detect any scams involving the COVID-19 stimulus payments made under the Coronavirus Aid, Relief, and Economic Security Act of 2020. As always, we stand ready to continue to perform our responsibility of serving the American people by protecting the integrity of Federal tax administration. Sincerely, J. Russell George Inspector General October 1, 2019 – March 31, 2020 3 Table of Contents Inspector General’s Message to Congress ........................................................................ 3 TIGTA’s Profile ..................................................................................................................... 6 Statutory Mandate ........................................................................................................ 6 Organizational Structure ............................................................................................... 7 Authorities ..................................................................................................................... 7 Promote the Economy, Efficiency, and Effectiveness of Tax Administration ................. 8 Security Over Taxpayer Data and Protection of IRS Resources ................................... 8 Implementing Tax Law Changes ................................................................................... 12 Supporting an Enhanced Taxpayer Experience ............................................................ 13 Improving Tax Reporting and Payment Compliance ..................................................... 15 Protect the Integrity of Tax Administration ........................................................................ 18 The Performance Model ............................................................................................... 18 Performance Area: Employee Integrity ........................................................................ 18 Identity Theft and Insider Threats ............................................................................. 19 Employee Integrity ................................................................................................... 20 Employee Integrity Projects ..................................................................................... 21 Performance Area: Employee and Infrastructure Security ............................................ 21 Performance Area: External Attempts to Corrupt Tax Administration ........................... 23 Corrupt Interference ................................................................................................. 23 Scams and Schemes ............................................................................................... 26 Impersonation Scams .............................................................................................. 26 Tax Preparer Outreach ............................................................................................ 30 Advancing Oversight of America’s Tax System ................................................................ 32 Audit Statistical Reports ..................................................................................................... 34 Reports With Questioned Costs .................................................................................... 34 Reports With Recommendations That Funds be Put to Better Use ............................... 35 Reports With Additional Quantifiable Impact on Tax Administration .............................. 36 Investigations Statistical Reports ....................................................................................... 38 Significant Investigative Achievements ......................................................................... 38 Status of Closed Criminal Investigations ....................................................................... 39 Criminal Dispositions .................................................................................................... 39 Administrative Dispositions on Closed Investigations .................................................... 39 Summary of Investigative Reports and Criminal Referrals ............................................ 40 Interference .................................................................................................................. 40 Instances of Whistleblower Retaliation .......................................................................... 40 Closed Investigations Involving Internal Revenue Service Senior Government Employees ........................................................................................... 40 Inspections and Evaluations Statistical Reports ............................................................... 42 Reports With Significant Unimplemented Corrective Actions ........................................ 42 4 October 1, 2019 – March 31, 2020 Appendices Appendix I – Statistical Reports – Other ...................................................................... 44 Reports With Significant Unimplemented Corrective Actions ........................................ 44 Other Statistical Reports ..............................................................................................
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