Tax Administration: IRS Undercover Operations Management Oversight Should Be Strengthened
GGD-92-79
Published: Apr 21, 1992. Publicly Released: May 06, 1992.
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Highlights
Pursuant to a congressional request, GAO reviewed the Internal Revenue Service's (IRS) management and oversight of its undercover operations.
Recommendations
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| Internal Revenue Service | To ensure the consistent application of controls over undercover operations, Commissioner of Internal Revenue should direct the Assistant Commissioner (Criminal Investigation) to require that the undercover operation request include a section detailing the alternatives considered and the reasons they were judged to be inappropriate. |
Closed – Implemented
The Internal Revenue Manual was revised on July 10, 1992, to include the requirement that undercover requests include a statement that alternatives were considered.
|
| Internal Revenue Service | To ensure the consistent application of controls over undercover operations, the Commissioner of Internal Revenue should direct the Assistant Commissioner (Criminal Investigation) to require that the undercover operational closing report include an itemization of the expenses incurred in the operation and a comparison of the proposed costs versus the actual costs of the operation, as well as a statement concerning the reasonableness of the expenses incurred during the operation. |
Closed – Implemented
The Internal Revenue Manual was revised on July 10, 1992, to expand what must be included in an undercover operations report.
|
| Internal Revenue Service | In addition, the Commissioner of Internal Revenue should require that the IRS Internal Audit staff do financial audits of the most costly and sensitive operations. |
Closed – Implemented
Effective December 21, 1992, the Criminal Investigation Division and Internal Audit completed procedures for determining which Group I undercover operations are the most costly and sensitive and therefore are to be audited by Internal Audit.
|
| Internal Revenue Service | To enhance IRS management oversight of its undercover operations, the Commissioner of Internal Revenue should direct the Assistant Commissioner (Criminal Investigation) to ensure that the CID National Office staff more actively oversee the IRS undercover operations, such as attending preoperational and quarterly meetings, especially for more costly and sensitive Group I operations. |
Closed – Implemented
On May 4, 1992, IRS increased staffing in the National Office Criminal Investigation who will attend regional meetings of significant undercover operations. IRS also instituted semi-annual regional meetings and additional training.
|
| Internal Revenue Service | To enhance IRS management oversight of its undercover operations, the Commissioner of Internal Revenue should direct the Assistant Commissioner (Criminal Investigation) to ensure that CIMIS provides data that are accurate, timely, and complete so that the Special Investigative Techniques Branch can better monitor, evaluate, and oversee undercover operations. |
Closed – Implemented
In March 1993, CID's Office of Review and Information Systems Management began generating detailed reports from CIMIS concerning the status and overall results of IRS undercover operations. The reports are automatically generated and provided monthly to CI national office staff and are also available on an as-needed basis.
|
| Internal Revenue Service | To enhance IRS management oversight of its undercover operations, the Commissioner of Internal Revenue should direct the Assistant Commissioner (Criminal Investigations) to establish benchmarks for evaluating operations and their results and use those benchmarks to measure the performance of individual regions and districts. |
Closed – Implemented
IRS is institutionalizing benchmarks through the Annual Business Plan process. These benchmarks will be used to assist in the evaluation of the effectiveness of the investigations conducted. Once the CIMIS program is fully operational and the "Internal Revenue Manual" changes have been in effect for a sufficient time to allow for a meaningful statistical sampling, the use of benchmarks for measuring undercover operations will be reassessed.
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Topics
Funds managementInternal auditsInternal controlsLaw enforcementLaw enforcement information systemsTax administrationTax evasionTax sheltersTax violationsUndercover operations