Tax Administration: IRS Experience Using Undercover Operations' Proceeds to Offset Operational Expenses
GGD-91-106
Published: Jul 03, 1991. Publicly Released: Jul 03, 1991.
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Highlights
Pursuant to a legislative requirement, GAO evaluated the: (1) Internal Revenue Service's (IRS) use of proceeds from undercover investigative operations; (2) results of such operations; and (3) financial audits conducted by IRS.
Recommendations
Matter for Congressional Consideration
| Matter | Status | Comments |
|---|---|---|
| Should Congress decide to extend the offset authority, it may also wish to revise the current IRS reporting requirements. Expanding the information IRS is required to include in its annual reports to Congress and requiring IRS to report the results of its detailed financial audits after the covert phase, instead of when the operation is closed, could provide Congress with more timely and complete information on undercover operations involving offsetting. Such reporting should not jeopardize undercover agents' safety or the success of criminal proceedings. |
Closed – Not Implemented
|
Legislation to extend the offset authority and revise the reporting requirements along lines GAO recommended was included in the Administration's 1994 crime bill. The provision was subsequently deleted and is not contained in the crime legislation passed late in 1994. |
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| Internal Revenue Service | The Commissioner of Internal Revenue should direct the Chief Inspector to ensure that Internal Audit expands its financial audits to include all undercover operations involving offsetting, regardless of the amount of expenditures or proceeds. |
Closed – Not Implemented
IRS does not intend to implement this recommendation.
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Topics
Administrative costsAudit oversightCongressional oversightDrug traffickingFunds managementLaw enforcementOffsetting collectionsReporting requirementsTax administrationUndercover operations