Tax Administration: Uses of and Problems With IRS' Non-Master File
GGD-99-42
Published: Apr 21, 1999. Publicly Released: Apr 21, 1999.
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Highlights
Pursuant to a congressional request, GAO provided information on the Internal Revenue Service's (IRS) non-master file (NMF), which IRS established to process taxpayer accounts that cannot be processed on its master file, focusing on: (1) the basic differences between the master file and the NMF; (2) known problems that IRS and taxpayers have been experiencing with the NMF, including the sources of such problems; and (3) recent IRS proposals and actions intended to address these problems.
Recommendations
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| Internal Revenue Service | The Commissioner of Internal Revenue should direct the appropriate officials to institute procedures to: (1) monitor future activity in the NMF to identify any problems that arise in the future; and (2) ensure that timely action is taken to address any such problems. |
IRS recognizes that the ultimate solution to the problems discussed in this report is the "fundamental replacement of the entire master file system." In the interim, according to IRS, various listings have been developed to assist management in monitoring inventories, detecting processing trends, and ensuring timely disposition of accounts. Also, procedures have been incorporated into the Internal Revenue Manual to require management's review of specific listings to ensure such things as timely disposition of account activity and accurate NMF processing. Although these actions are important, they are directed at improving controls over individual accounts on the NMF. GAO's recommendation was more global. It believed that IRS needed to institute some mechanism that would enable it to proactively identify and correct situations, such as the existence of a large number of accounts on the NMF that could and should be moved to the master file.
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