GAO’s recommendations database contains report recommendations that still need to be addressed. GAO’s priority recommendations are those that we believe warrant priority attention. We sent letters to the heads of key departments and agencies, urging them to continue focusing on these issues. Below you can search only priority recommendations, or search all recommendations.

Our recommendations help congressional and agency leaders prepare for appropriations and oversight activities, as well as help improve government operations. Moreover, when implemented, some of our priority recommendations can save large amounts of money, help Congress make decisions on major issues, and substantially improve or transform major government programs or agencies, among other benefits.

As of April 18, 2018, there are 5,184 open recommendations, of which 465 are priority recommendations. Recommendations remain open until they are designated as Closed-implemented or Closed-not implemented.

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Federal Agency: "Department of the Treasury: Internal Revenue Service"

9 publications with a total of 15 priority recommendations
Director: Beryl H. Davis
Phone: (202) 512-2623

3 open priority recommendations
Recommendation: To comply with improper payments reporting requirements and improve procedures related to processing PTC information on tax returns, the Commissioner of Internal Revenue should direct the appropriate officials to assess the program against applicable IPIA-defined thresholds and conclude on its susceptibility to significant improper payments, and revise the scope of its improper payments susceptibility assessment for the PTC program to include instances in which advance PTC is greater than or equal to the amount of PTC claimed on the tax return. If the program meets the IPIA definition for being susceptible to significant improper payments based on this assessment, estimate and report improper payments associated with the PTC program consistent with IPIA requirements.

Agency: Department of the Treasury: Internal Revenue Service
Status: Open
Priority recommendation

Comments: The Internal Revenue Service (IRS) partially agreed with this recommendation. On July 10, 2018, IRS informed us that it is in the process of conducting quantitative analysis of the premium tax credit (PTC) using National Research Program (NRP) data for tax year 2014 and aggregating and assessing the data to determine the reliability of this data for determining the extent of improper payments related to PTC. IRS believes it will complete its assessment sometime during the 4th quarter of fiscal year 2018. IRS also stated that they plan to do a qualitative risk assessment for the PTC program using Department of Treasury's template. Until IRS conducts an appropriate risk assessment consistent with the Improper Payments Information Act of 2002, as amended, it will continue to be uncertain about whether it should estimate the amount of improper PTC payments. We will continue to monitor the agency's actions to address this recommendation.
Recommendation: To comply with improper payments reporting requirements and improve procedures related to processing PTC information on tax returns, the Commissioner of Internal Revenue should direct the appropriate officials to assess whether IRS should require its examiners to verify health care coverage of individuals to determine eligibility for PTC. To do this, IRS should complete its evaluation of the level of noncompliance related to duplicate health insurance coverage. Based on this evaluation and if cost effective, IRS should design and implement formal policies and procedures to routinely identify individuals inappropriately receiving PTC because of their eligibility for or enrollment in health care programs outside of the marketplaces and notify such individuals of their ineligibility for PTC.

Agency: Department of the Treasury: Internal Revenue Service
Status: Open
Priority recommendation

Comments: The Internal Revenue Service (IRS) agreed with this recommendation. On July 10, 2018, IRS informed us that it plans to perform analysis to determine the magnitude of the noncompliance related to duplicate health insurance coverage. IRS will use the results from this analysis to determine whether it makes sense to update its Internal Revenue Manual (IRM) to require examiners to use the checklist. IRS believes it will complete this analysis sometime in fiscal year 2019. Until such policies and procedures are incorporated in the IRM, IRS is vulnerable to improperly providing premium tax credit (PTC) to ineligible recipients. We will continue to monitor the agency's actions to address this recommendation.
Recommendation: To comply with improper payments reporting requirements and improve procedures related to processing PTC information on tax returns, the Commissioner of Internal Revenue should direct the appropriate officials to design and implement procedures in the IRM to regularly notify nonfilers of the requirement to file tax returns in order to continue to receive advance PTC in the future.

Agency: Department of the Treasury: Internal Revenue Service
Status: Open
Priority recommendation

Comments: The Internal Revenue Service (IRS) partially agreed with this recommendation. On March 23, 2018, IRS stated that it developed a process for sending notices to individuals who received advance premium tax credit (PTC) paid on their behalf in the previous calendar year and who failed to file a tax return or requested an extension to file. At that time, IRS stated that it will determine whether this information should be included in an existing Internal Revenue Manual (IRM). On July 10, 2018, IRS informed us that after further consideration, it does not plan to update the IRM to include procedures for notifying nonfilers of the requirement to file tax returns in order to receive advance PTC in the future. IRS stated it has noticed a steady decline in nonfilers in tax year 2016 and expects to see a continuation of declines in nonfilers in tax year 2017. Because of this expected decline, IRS is uncertain if it will send notices to individuals for the current tax year. IRS considers these notices discretionary, post-filing season activity that is focused primarily on educating taxpayers of their requirement to file the appropriate tax return data and to alert them of the potential loss of future advance PTC subsidies. We continue to believe that IRS needs to design and implement procedures to regularly notify non-filers of the need to file to continue receiving advance PTC. The lack of these procedures increases the risk of individuals losing their subsidized health care coverage from the marketplaces in the future. This can occur because the individuals may not be aware of the requirement to file their tax returns and reconcile the advance PTC since there is a year's interval between when individuals first apply for advance PTC and when they are supposed to reconcile it on their tax returns. In addition, unless individuals make an assessment or claim through tax return filing, the federal government may not be aware of or fully collecting on excess advance PTC that it may be owed or paying any additional PTC that is due to individuals. We will continue to monitor the agency's actions to address this recommendation.
Director: Jessica Lucas-Judy
Phone: (202) 512-9110

1 open priority recommendation
Recommendation: The Commissioner of Internal Revenue should direct the referral programs to establish a mechanism to coordinate on a plan and timeline for developing a consolidated, online referral submission in order to better position IRS to leverage specialized expertise while exploring options to further consolidate the initial screening operations.

Agency: Department of the Treasury: Internal Revenue Service
Status: Open
Priority recommendation

Comments: As of February 2018, IRS had taken some action to establish a mechanism to coordinate on a plan and timeline for developing a consolidated, online referral submission, as GAO recommended in its February 2016 report. IRS established a cross-functional team in February 2016 to comprehensively review IRS's referral programs. Among other things, the team has explored options to consolidate the initial screening operations and determine the scope and complexity for moving the referral process to an online format. According to IRS, an electronic submission process is expected to provide better access to the program and reduce the burden associated with making a written report or referral. In November 2016, the cross-functional team requested information technology resources for fiscal year 2019 to develop an online system which could potentially replace four separate referral forms, filter out incomplete referrals, and electronically route referrals for further IRS action. IRS assessed options for consolidating all forms for the various referral programs and determined that consolidating them to a single form was not feasible because of the technical nature and complexity of the various referral types. As of February 2018, the cross-functional team had worked with IRS On Line Services to develop an online application prototype and was considering the cost-effectiveness of a commercial off-the-shelf product. According to IRS, the online application will make it easier for the public to report possible tax violations. Also, the online system will improve efficiency in coordination and provide reports that will be incorporated into the quarterly coordination meetings to achieve a broader collaborative mechanism across the multiple referral programs. IRS said it will consider further consolidating the referral programs once the online application is in place. GAO will continue to assess these efforts as they are further developed.
Director: Kingsbury, Nancy R
Phone: (202) 512-2700

2 open priority recommendations
Recommendation: In addition to implementing our previous recommendations, to effectively implement key elements of the IRS information security program, the Commissioner of Internal Revenue should ensure that control testing methodology and results fully meet the intent of the control objectives being tested.

Agency: Department of the Treasury: Internal Revenue Service
Status: Open
Priority recommendation

Comments: During the audit of IRS's FY 2017 financial statements, IRS indicated that it had reviewed its security controls assessment standard operating procedure and trained contractors. While positive steps, these corrective actions did not fully address our recommendation. As part of our FY 2018 audit, we will continue to monitor the agency's progress in ensuring that its control testing methodology and results fully meet the intent of the control objectives being tested.
Recommendation: In addition to implementing our previous recommendations, to effectively implement key elements of the IRS information security program, the Commissioner of Internal Revenue should update the remedial action verification process to ensure actions are fully implemented.

Agency: Department of the Treasury: Internal Revenue Service
Status: Open
Priority recommendation

Comments: During the audit of IRS's FY 2017 financial statements, IRS indicated that it had updated its standard operating procedures for validating remedial actions and has a team in place to ensure that remedial actions are fully implemented. However, these corrective actions did not fully address our recommendation. As part of our FY 2018 audit, we will continue to monitor the agency's progress in strengthening its remedial action verification process.
Director: Mctigue Jr, James R
Phone: (202) 512-7968

2 open priority recommendations
Recommendation: The Commissioner of Internal Revenue should track the results of large partnerships audits: (a) define a large partnership based on asset size and number of partners; (b) revise the activity codes to align with the large partnership definition; and (c) separately account for field audits and campus audits.

Agency: Department of the Treasury: Internal Revenue Service
Status: Open
Priority recommendation

Comments: IRS has taken actions to implement GAO's September 2014 recommendation, but the definition IRS provided is not likely to help it analyze results from audits of the very large partnerships that GAO's report covered. In September 2017, IRS defined large partnerships as those with assets of $10 million or more, without regard to the number of partners. With changes to the Tax Equity and Fiscal Responsibility Act of 1982 partnership audit procedures and enactment of the Bipartisan Budget Act of 2015 (BBA) (sections 1101 and 1102 of Public Law 114-74), IRS officials said that the number of partners is no longer a critical factor when defining a large partnership. IRS is correct that the number of partners is no longer relevant to this statutory definition of large partnership. The recently eliminated Electing Large Partnerships audit procedures had defined large partnerships as those with 100 or more direct partners in a taxable year. Even so, IRS's new definition of large partnerships is limited compared to large corporations. IRS has defined eight asset categories for tracking large corporation audit results while it has one for large partnerships, which vary widely based on asset amounts and complex structures. As GAO reported, during tax years 2002 through 2011, the number of large partnerships with 100 or more direct and indirect partners as well as $100 million or more in assets more than tripled to 10,099, some of which had assets exceeding $5 billion. In tax year 2011, more than two-thirds of these large partnerships had at least 100 or more pass-through entities as direct and indirect partners. Until IRS develops a more expansive definition of large partnerships, IRS may have challenges analyzing the results from its audits of large partnerships. IRS is taking steps to revise activity codes, as GAO recommended. IRS is creating a reporting and monitoring structure for its new definition to track the results from auditing large partnerships. IRS does not yet know whether the audit results will be sufficient to analyze ways to better plan and use IRS audit resources as well as analyze noncompliance risk for its new definition. IRS's analysis may not be able to achieve these ends with only one asset category to cover the wide range of asset amounts above $10 million. IRS will also be able to account for field and campus audits.
Recommendation: The Commissioner of Internal Revenue should analyze the audit results by these activity codes and types of audits to identify opportunities to better plan and use IRS resources in auditing large partnerships.

Agency: Department of the Treasury: Internal Revenue Service
Status: Open
Priority recommendation

Comments: IRS agreed with our recommendation. IRS is creating a reporting and monitoring structure of partnership audits based on its new definition to track the results from auditing large partnerships. However, IRS's new definition of a large partnership is not detailed, which may not allow IRS to identify what types of large partnerships present a high noncompliance risk. IRS only plans to have one category ($10 million or more in assets) for large partnerships. A more detailed definition, in line with the various size categories for large corporations, would allow IRS to complete more detailed analysis of large partnership noncompliance.
Director: Mctigue Jr, James R
Phone: (202) 512-7968

3 open priority recommendations
Recommendation: To clarify the desired results of the correspondence audit program and its linkages to IRS-wide activities, the Commissioner of the Internal Revenue Service should establish formal program objectives.

Agency: Department of the Treasury: Internal Revenue Service
Status: Open
Priority recommendation

Comments: IRS correspondence audit program officials planned a working group to develop formal program objectives. In November 2016, IRS officials provided documents intended to define the program objectives, but the objectives were unclear. IRS officials said that they expected to describe the objectives in program guidance changes anticipated by July 2018; as of December 2017, officials said they had not yet begun steps to clearly document those objectives.
Recommendation: To clarify the desired results of the correspondence audit program and its linkages to IRS-wide activities, the Commissioner of the Internal Revenue Service should ensure that the program measures reflect those objectives.

Agency: Department of the Treasury: Internal Revenue Service
Status: Open
Priority recommendation

Comments: IRS officials said that, among other actions, they plan to review and update program documentation and guidance as warranted to ensure a clear link between correspondence audit program objectives and related measures. IRS officials provided documentation in November 2016, but program measures could not be clearly linked to objectives because the objectives were not clear. As of December 2017, officials had no planned date by which to clearly document the program objectives and their links with program measures.
Recommendation: To clarify the desired results of the correspondence audit program and its linkages to IRS-wide activities, the Commissioner of the Internal Revenue Service should clearly link those measures with strategic IRS-wide goals on ensuring compliance in a cost-effective way while minimizing taxpayer burden.

Agency: Department of the Treasury: Internal Revenue Service
Status: Open
Priority recommendation

Comments: IRS officials said that, among other actions, they plan to review and update program documentation and guidance as warranted to ensure a clear link between correspondence audit program objectives and related measures. IRS officials provided documentation in November 2016, but program measures could not be clearly linked to objectives because the objectives were not clear. As of December 2017, officials had no planned date by which to clearly document the program objectives and their links with program measures.
Director: Mctigue Jr, James R
Phone: (202) 512-7968

1 open priority recommendation
Recommendation: The Acting Commissioner of the Internal Revenue Service should direct appropriate officials to develop a long-term strategy to improve web services provided to taxpayers, in accordance with Howto.gov and other federal guidance outlined in our report. To accomplish this, the IRS should develop business cases for all new online services, describing the potential benefits and costs of the project, and use them to prioritize future projects.

Agency: Department of the Treasury: Internal Revenue Service
Status: Open
Priority recommendation

Comments: IRS has made progress in improving its online services strategy, as we recommended, but as of May 2018, IRS has not yet completed its efforts. IRS's strategy has evolved from a singular focus on on-line services to a more comprehensive strategy of taxpayer interaction through all service channels. In November 2017, IRS officials shared a draft outline of their Strategic Plan for 2018-2022 with GAO. The draft outline describes IRS's goals and objectives including expanding digital options for taxpayers and professionals to interact efficiently with IRS. However, this documentation is at a high level and subject to change. Until IRS releases the final Strategic Plan for 2018-2022, GAO will continue to assess the steps IRS is taking to develop a long-term strategy to improve web services for taxpayers. In addition, in November 2017, IRS implemented a new process to identify and prioritize IRS-wide investments and unfunded requirements which are outside the annual budget process. As a part of this new process, IRS's business units are to submit business cases that describe the need for the new investment, costs, benefits, return on investment, risks, and alignment with the Strategic Plan. IRS officials said they will use this prioritization process to score or rank investments using a standard -set of criteria. Having a prioritized list of unfunded requirements would allow IRS executives to allocate resources to the highest priorities when additional funding becomes available.
Director: White, James R
Phone: (202) 512-9110

1 open priority recommendation
Recommendation: The Acting Commissioner of Internal Revenue should take the following action outline a strategy that defines appropriate levels of telephone and correspondence service and wait time and lists specific steps to manage service based on an assessment of time frames, demand, capabilities, and resources.

Agency: Department of the Treasury: Internal Revenue Service
Status: Open
Priority recommendation

Comments: IRS has made progress in developing a customer service strategy with defined appropriate levels of service and steps needed to provide such service, as we recommended; however, as of June 2018, IRS has not completed its efforts. In January 2017, IRS officials provided results of a benchmarking study that compared IRS's telephone service, measures, and goals to comparable agencies and companies. The team that conducted the study recommended options for additional measures to indicate the level of access taxpayers have to service, including across service channels. IRS concluded the ideal level of service is 83 percent, which optimizes wait time, disconnects, and assistor availability. However, IRS did not adopt the recommended service standard, nor did it estimate the resources required to achieve that standard. While these benchmarking results are an important step toward developing a service strategy, without actually setting goals that are consistent with the study results and specifying the resources required to achieve them, IRS will be less effective in working with Congress and other stakeholders to provide the desired levels of service. Furthermore, the study does not address how IRS plans to improve its handling of correspondence. In May 2018, IRS released its strategic plan for 2018-2022. However, this documentation does not define appropriate levels of correspondence service and wait time or list specific steps to manage service based on an assessment of time frames, demand, capabilities, and resources. In addition, IRS officials told us in June 2018 that they are drafting a customer service strategy that they expect to complete by September 2018. Until IRS releases the customer service strategy, it is unclear the extent to which and when IRS will address our recommendation. We maintain that Treasury should develop a comprehensive strategy in consultation with IRS which would enable IRS to make a more informed request to Congress about resource requirements needed to deliver specific levels of service. Finalizing a long-term comprehensive strategy will help ensure IRS is maximizing the benefit to taxpayers and possibly reduce costs in other areas, such as for IRS's telephone operations.
Director: Mctigue Jr, James R
Phone: (202) 512-7968

1 open priority recommendation
Recommendation: To better ensure that IRS's limited enforcement resources are allocated in a manner that maximizes the revenue yield of the income tax, subject to other important objectives of tax administration, such as minimizing compliance costs and ensuring equitable treatment across different groups of taxpayers, the Commissioner of Internal Revenue should review disparities in the ratios of direct revenue yield to costs across different enforcement programs and across different groups of cases within programs and determine whether this evidence provides a basis for adjusting IRS's allocation of enforcement resources each year. As part of this review, IRS should develop estimates of the marginal direct revenue and marginal direct cost within each enforcement program and each taxpayer group.

Agency: Department of the Treasury: Internal Revenue Service
Status: Open
Priority recommendation

Comments: IRS agrees in principle to using ratios of direct revenue yield-to-cost to adjust its enforcement resource allocation, as GAO recommended in December 2012; however, IRS officials plan to wait until it has developed such ratios at the marginal level (e.g., for the last cases worked within specific categories of exams) before they make such adjustments. GAO maintains that IRS has a basis to adjust its allocation of enforcement resources each year and could improve resource allocation immediately (while it is still working to develop the marginal ratios) by using average yield-to-cost ratios for each category. IRS has developed a methodology for estimating marginal ratios for their correspondence examination program. IRS officials are working to apply this methodology within that program. While they did not have a detailed timeline for full implementation, as of October 2017, they plan on implementing the use of marginal ratios for resource allocation by 2019. If IRS does not take into account some measure of revenue yield per dollar of cost when making allocation decisions, it will miss an opportunity to collect significant amounts of additional revenue.
Director: White, James R
Phone: (202) 512-9110

1 open priority recommendation
Recommendation: The Commissioner of Internal Revenue should complete an Internet strategy that (1) provides a justification for the implementation of online self-service tools and includes an assessment of providing online self-service tools that allow taxpayers to access and update elements of their account online; (2) acknowledges the cost and benefits to taxpayers of new online services; (3) sets the time frame for when the online service would be created and available for taxpayer use; and (4) includes a plan to update the strategy periodically.

Agency: Department of the Treasury: Internal Revenue Service
Status: Open
Priority recommendation

Comments: IRS has made progress in improving its online services strategy, as we recommended; however, as of May 2018 IRS has not yet completed its efforts. In November 2017, IRS officials shared a draft outline of their Strategic Plan for 2018-2022 with GAO. The draft describes IRS's goals and objectives including expanding digital options for taxpayers and professionals to interact efficiently with IRS. However, this documentation is at a high level and subject to change. Once IRS releases its final Strategic Plan for 2018-2022, GAO will assess the steps IRS is taking to develop a comprehensive plan for online services. A long-term comprehensive strategy for its online services will help ensure IRS is maximizing the benefit to taxpayers from this investment and reduce costs in other areas, such as for IRS's telephone operations.