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Recommendations Database

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 October 25, 2020, there are 4812 open recommendations, of which 473 are priority recommendations. Recommendations remain open until they are designated as Closed-implemented or Closed-not implemented.

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Subject Term: Charities

1 publication with a total of 5 open recommendations
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Tax-Law Enforcement: IRS Could Better Leverage Existing Data to Identify Abusive Schemes Involving Tax-Exempt Entities
GAO-19-491, Sep 5, 2019
Director: James R. McTigue, Jr.
Phone: (202) 512-9110

5 open recommendations
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Recommendation: The Commissioner of Internal Revenue should undertake a risk assessment of tax-exempt entity Form 8886-T filings. Based on the findings of the risk assessment, IRS should then determine whether steps are needed to increase compliance, such as, for example, through increased outreach to tax-exempt entities or assessment of nonfiling penalties. (Recommendation 1)

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

Comments: IRS agreed with the recommendation. In a July 2020 letter to GAO, IRS said the Tax Exempt/Government Entities division is documenting the process for reviewing Form 8886-T filings and analyzing whether all tax-exempt entities that should file Form 8886-T are filing it as required. As of August 2020, IRS officials expected to complete their analysis in November 2020. GAO continues to monitor IRS's progress.
Recommendation: The Commissioner of Internal Revenue should link audit data on abusive tax schemes involving tax-exempt entities across operating divisions and use the linked data to assess emerging issues and develop policy responses. (Recommendation 2)

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

Comments: In July 2020, IRS officials said they were working to determine if database coding on abusive schemes involving tax-exempt entities can be added across the agency's audit divisions. As of August 2020, IRS officials said this work will be done by June 2021. GAO continues to monitor IRS's progress.
Recommendation: The Commissioner of Internal Revenue should test the ability of the Return Inventory Classification System to facilitate analysis and monitoring of audit data across the operating divisions and to support the IRS's enforcement objectives. (Recommendation 3)

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

Comments: In a July 2020 letter 2020, IRS officials said they agreed with this recommendation and have begun to analyze its feasibility. IRS's plans include determining if the Return Inventory Classification System (RICS) could support analysis and monitoring of audit data across IRS's operating divisions. To that end, IRS plans to host cross-divisions meetings to determine what data can be shared and how the data can be monitored with RICS. As of August 2020, IRS expected to complete its analysis by March 2022. GAO continues to monitor IRS's progress.
Recommendation: The Commissioner of Internal Revenue should use existing data analytic tools to further mine Form 8886 and Form 8918 data, which could be used to find audit leads on tax-exempt entity involvement in potentially abusive tax schemes. (Recommendation 4)

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

Comments: In a July 2020 letter, IRS said it will explore the use of existing data analytic tools to mine data and to identify undiscovered exempt-entity involvement in abusive tax schemes. As part of that effort, IRS plans to continue to evolve its text processing. IRS also plans to determine if optical character recognition can be used to identify keywords in disclosure reports that could help determine whether a tax-exempt entity was a party to a reportable transaction that warrants further investigation and whether that would be productive. As of August 2020, IRS expected to complete its analysis by March 2022. GAO continues to monitor IRS's progress.
Recommendation: The Commissioner of Internal Revenue should develop guidance to help managers ensure referrals about abusive schemes involving tax-exempt entities are made across operating divisions. This could be accomplished by, for example, adopting specific guidance for audit managers to look for referral accuracy in their reviews of case closings. (Recommendation 5)

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

Comments: In a July 2020 letter, IRS said it agreed with the recommendation and will develop guidance to assist mangers across the agency's divisions to ensure referrals involving tax-exempt entities are directed to the Tax Exempt/Government Entities (TE/GE) division. The letter also said IRS plans to provide training across examination units to instruct staff to make referrals appropriately and correctly. IRS expects to complete the TE/GE guidance and training material by June 2021. As of August 2020, TE/GE officials said the other examination divisions are expected to incorporate the forthcoming procedural guidance in their work processes by 2022. GAO continues to monitor IRS's progress.