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Open Recommendations (200 total)

Tax Debt Collection Contracts: IRS Analysis Could Help Improve Program Results and Better Protect Taxpayers

GAO-19-193
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1 Open Recommendations
Agency Affected Recommendation Status
Internal Revenue Service The Commissioner of Internal Revenue should include the Department of the Treasury Inspector General for Tax Administration (TIGTA) costs in IRS's reporting of PDC program costs. (Recommendation 2)
Open
IRS disagreed with the recommendation. In October 2019, IRS said that including TIGTA costs in reporting program costs would be inconsistent with legislative requirements that define program costs as IRS's costs and with IRS cost-accounting practices. However, GAO maintains that the FAST Act set minimum reporting requirements to which IRS can add more information. Also, the existing cost accounting standards and practices to which IRS refers govern IRS's accounting for and reporting of costs incurred by IRS, not to fuller reporting of the PDC program's costs to the federal government. Without complete reporting on TIGTA's costs to administer the PDC taxpayer complaint system, Congress is not informed of the program's full costs. IRS has indicated it does not intend to take action to implement this recommendation, which it confirmed in January 2024.

Management Report: Improvements Are Needed to Enhance the Internal Revenue Service's Internal Control over Financial Reporting

GAO-20-480R
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1 Open Recommendations
Agency Affected Recommendation Status
Internal Revenue Service We recommend that the Commissioner of Internal Revenue establish and implement manual refund procedures to direct (1) initiators to document (e.g., record on the taxpayers' accounts or annotate on the related manual refund forms) the justification for bypassing the IAT tool warning related to potential duplicate tax refunds on taxpayers' accounts and (2) managers to monitor whether such warnings were bypassed and review the justifications for reasonableness prior to approving manual refund forms. (Recommendation 20-02)
Open
During our fiscal year 2022 audit, IRS officials told us that they plan to address this recommendation in the future. As a result, this recommendation remains open as of September 30, 2022.

Tax Filing: 2021 Performance Underscores Need for IRS to Address Persistent Challenges

GAO-22-104938
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1 Open Recommendations
Agency Affected Recommendation Status
Internal Revenue Service The Commissioner of Internal Revenue should take steps to reduce the amount of refund interest paid for those cases within IRS's control. (Recommendation 3)
Open
IRS agreed to look for ways to reduce refund interest payments related to the return backlog. As of December 2022, IRS stated that it implemented its "Get Healthy Plan" to reduce the backlog of work contributing to processing delays. As part of this plan, IRS hired additional staff, redirected existing resources, and utilized automation to return its inventory to manageable levels and restore its ability to timely process returns and correspondence. These actions, according to IRS, will help reduce refund interest payments. We support IRS's efforts to fully address its pandemic-related backlog and process returns and correspondence in a timely manner. However, this alone will likely not reverse the annual growth of refund interest payments. As we noted in our report, refund interest payments have gradually increased since fiscal year 2015, several years prior to the pandemic. Further, as we reported, and IRS confirmed in its response, refund interest payments can be due to both retroactive legislative benefits and delays in IRS processing times. Without identifying, monitoring, and reporting on the primary reasons for refund interest payments, and associated dollar amounts (recommendation 2), IRS is not in a position to ensure that any steps it takes in response to recommendation 3 directly affect any reduction in refund interest payments.

Management Report: Improvements Needed in IRS's Financial Reporting and Information System Controls

GAO-23-106401
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1 Open Recommendations
Agency Affected Recommendation Status
Internal Revenue Service The Commissioner of the Internal Revenue Service should direct the appropriate officials to establish and implement actions to provide reasonable assurance that requests for information are provided in a timely manner as required. (Recommendation 3)
Open
In its written comments on a draft of our report, IRS stated that it agreed with this recommendation and that it will shift staffing to resolve the backlog caused by COVID-19. We will continue to monitor IRS's actions to address this recommendation.

2023 Tax Filing: IRS Improved Customer Service, but Could Further Improve Processing and Evaluate Expedited Hiring

GAO-24-106581
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1 Open Recommendations
Agency Affected Recommendation Status
Internal Revenue Service The Commissioner of Internal Revenue should identify a responsible party who approves and checks the accuracy of Submission Processing data reports and coordinates report dispersal to ensure that they do not contain errors. This individual and quality review process should be documented, such as in the Internal Revenue Manual. (Recommendation 2)
Open
When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

IRS Case Selection: Automated Collection System Lacks Key Internal Controls Needed to Ensure the Program Fulfills Its Mission

GAO-15-744
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1 Open Recommendations
Agency Affected Recommendation Status
Internal Revenue Service To help ensure the IRS collection program meets its mission and selects cases fairly, the Commissioner of Internal Revenue should establish, document, and implement objectives for the collection program and ACS, and define the key term of "fairness" as it applies to collection activities, which can be communicated to IRS staff.
Open
In January 2017, IRS supplied documentation on how it had established a fairness policy statement, which is incorporated into the Internal Revenue Manual, communicated to staff in email, and provided via a powerpoint presentation to staff. IRS also established and documented collection program objectives as part of its FY2017 Collection Program Letter. In October 2017, IRS shared additional draft documentation with GAO that would align SB/SE objectives with objectives from its FY2017 Collection Program Letter as well as other information such as performance measures. Following our assessment and request for more information, in November 2017, IRS provided a document intended to define certain collection program objectives, but it did not clearly define fairness or collection program and ACS objectives. We provided IRS feedback on the document in November 2017, January 2018, and July 2018. In June 2019, IRS officials provided information on an ongoing IRS initiative to identify objectives for various programs, but the collection program with its automated case processes was not among the pilot programs. As a result, any actions to implement the recommendation will be stalled until the initiative's pilot programs are complete. As of September 2023, IRS had not provided a planned date when it expects to complete them. We will update the status of IRS's plans and actions to implement the recommendation after we complete review of any documents IRS provides.

FY 2019 Government Shutdown: Selected Agencies Could Improve Contingency Planning for Potential Shutdown Scenarios and Strengthen Some Internal Controls

GAO-20-377
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1 Open Recommendations
Agency Affected Recommendation Status
Internal Revenue Service The Commissioner of Internal Revenue should develop internal controls to limit access to virtual workspaces to appropriate employees during a government shutdown. (Recommendation 12)
Open
The Internal Revenue Service disagreed with this recommendation. IRS stated that it believes that it has effective controls in place to manage virtual workspace access during a shutdown. In addition, IRS said that it believes that implementing additional access controls do not justify the corresponding resource investments. As of March 2021, IRS maintains its position that the benefits of implementing additional controls do not justify the corresponding resource investment. We continue to believe that IRS should improve its access controls, which currently rely on managers and furlough letters to communicate limits on workspace access. While we recognize the costs of increased access controls, government shutdowns are unique events that require additional access controls in order to prevent potential misuse of government resources. As of April 2024, IRS officials said that the agency has not taken further action to implement this recommendation. We will continue to monitor IRS's efforts on this issue.

IRS Free File Program: IRS Should Develop Additional Options for Taxpayers to File for Free

GAO-22-105236
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1 Open Recommendations
Agency Affected Recommendation Status
Internal Revenue Service The Commissioner of IRS should seek agreement with FFI on eliminating the MOU provision requiring IRS to notify FFI immediately if it commits funding to offer services for free to taxpayers. (Recommendation 2)
Open
IRS disagreed with this recommendation. In October 2022, IRS's Deputy Commissioner for Services and Enforcement reiterated IRS's position. The IRS official stated that it continues to believe this provision is necessary to maintain trust and transparency with Free File, Incorporated (FFI). In March 2023, IRS and FFI agreed to extend their agreement through October 2025 and did not remove this provision. We understand IRS's concerns about maintaining trust in the program and our report recognizes IRS's efforts to communicate and coordinate with FFI. We continue to believe that IRS should work to eliminate this provision so that IRS can freely pursue new filing options for taxpayers as resources and technology permit. Eliminating the provision would in no way prohibit IRS from choosing to discuss its plans with FFI to maintain transparency and trust. Further, the Inflation Reduction Act of 2022 directs IRS to report to Congress by May 2023 on a potential IRS-run electronic tax filing system, including assessing the costs of such a system, taxpayer opinions, and an assessment of IRS's capacity to deliver such a system. IRS published this report in May 2023 and is preparing for a Direct File pilot for the 2024 tax season. We believe that as part of this process IRS should consider the extent to which this provision could make it more difficult to transition to a new system if Congress decides on such a course of action. We will continue to monitor IRS's efforts to address this recommendation.

Tax Enforcement: IRS Audit Processes Can Be Strengthened to Address a Growing Number of Large, Complex Partnerships

GAO-23-106020
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1 Open Recommendations
Agency Affected Recommendation Status
Internal Revenue Service The Commissioner of Internal Revenue should develop guidance defining large, complex partnerships and the characteristics of those entities. (Recommendation 3)
Open
IRS agreed with the recommendation. In January 2024, officials reported they are working with IRS research officials to understand the partnership population and identify more specific segments of partnerships. We will continue to monitor IRS's efforts to address our recommendation.

Tax Compliance: Opportunities Exist to Improve IRS High-Income/High-Wealth Audits

GAO-24-106112
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1 Open Recommendations
Agency Affected Recommendation Status
Internal Revenue Service The Commissioner of Internal Revenue should use IRS's evaluation plans to evaluate the effectiveness of its models for selecting HI/HW returns for audit. (Recommendation 4)
Open
IRS agreed with the recommendation. We will continue to monitor IRS's efforts to address our recommendation.
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