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Open Recommendations

IRS Reform: Following Leading Practices and Improving Cost Estimation Policies Could Benefit Agency Efforts

GAO-24-106091
Feb 14, 2024
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5 Open Recommendations
Agency Affected Recommendation Status
Internal Revenue Service As IRS implements its agency reform efforts, the Commissioner of Internal Revenue should ensure that IRS can demonstrate that it is following relevant leading agency reform practices. (Recommendation 1)
Open
When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
Internal Revenue Service The Commissioner of Internal Revenue should establish a cost estimating policy for estimating costs of non-IT initiatives that addresses the 12 steps and associated best practices found in our Cost Guide. (Recommendation 2)
Open
When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
Internal Revenue Service The Commissioner of Internal Revenue should include IRS's policy for estimating costs of non-IT initiatives in the IRM and issue interim guidance while the IRM section is being developed. (Recommendation 3)
Open
When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
Internal Revenue Service The Commissioner of Internal Revenue should incorporate all 12 steps and associated best practices found in our Cost Guide into IRS's IT cost estimation procedures. (Recommendation 4)
Open
When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
Internal Revenue Service The Commissioner of Internal Revenue should include IRS's IT cost estimation procedures in the IRM and issue interim guidance while the IRM section is being developed. (Recommendation 5)
Open
When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

Tax Compliance: Opportunities Exist to Improve IRS High-Income/High-Wealth Audits

GAO-24-106112
Feb 12, 2024
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8 Open Recommendations
Agency Affected Recommendation Status
Internal Revenue Service The Commissioner of Internal Revenue should assess whether IRS's research data on HI/HW returns have sufficient coverage and quality to understand the complexity and compliance related to HI/HW tax returns. (Recommendation 1)
Open
When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
Internal Revenue Service Based on an assessment of the coverage and quality of HI/HW tax return research data, the Commissioner of Internal Revenue should take steps to improve those data, if needed, to better understand the complexity and compliance related to HI/HW tax returns. (Recommendation 2)
Open
When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
Internal Revenue Service The Commissioner of Internal Revenue should develop evaluation plans that include relevant evaluation questions and appropriate evaluation designs to evaluate the effectiveness of IRS's models for selecting HI/HW returns for audit. (Recommendation 3)
Open
When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
Internal Revenue Service The Commissioner of Internal Revenue should use IRS's evaluation plans to evaluate the effectiveness of its models for selecting HI/HW returns for audit. (Recommendation 4)
Open
When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
Internal Revenue Service The Commissioner of Internal Revenue should develop a mechanism for consistently collecting and using feedback from audit staff. (Recommendation 5)
Open
When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
Internal Revenue Service The Commissioner of Internal Revenue should assess IRS's current and future hiring and training needs for HI/HW auditing, including the number of staff and their skills. (Recommendation 6)
Open
When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

Private Debt Collection Program: IRS Could Improve Results and Better Promote Equitable Outcomes for Taxpayers

GAO-24-106140
Feb 06, 2024
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4 Open Recommendations
Agency Affected Recommendation Status
Internal Revenue Service The Commissioner of Internal Revenue should establish clear fund balance goals or staffing targets for IRS's Special Compliance Fund. (Recommendation 1)
Open
When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
Internal Revenue Service The Commissioner of Internal Revenue should establish standards for evaluating equity for taxpayers who are either assigned to or excluded from the PDC program, including IRS's process of routing taxpayers to the inactive inventory (shelf). (Recommendation 2)
Open
When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
Internal Revenue Service The Commissioner of Internal Revenue should assess IRS's performance against its standards for equity and take actions to address any identified issues. (Recommendation 3)
Open
When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
Internal Revenue Service The Commissioner of Internal Revenue should provide taxpayers in the inactive inventory (shelf) and excluded from the PDC program tailored taxpayer-centric information about their debts and options for resolving them. (Recommendation 4)
Open
When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

Tax Enforcement: IRS Audit Processes Can Be Strengthened to Address a Growing Number of Large, Complex Partnerships

GAO-23-106020
Jul 27, 2023
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4 Open Recommendations
Agency Affected Recommendation Status
Internal Revenue Service The Commissioner of Internal Revenue should use representative sampling of partnership returns, including those on which IRS's current partnership models do not identify risk factors, to help identify additional noncompliance that may not be detected and to improve the agency's understanding of the models' effectiveness. (Recommendation 1)
Open
IRS agreed with the recommendation. In January 2024, officials described a plan to test statistical models used to identify potential noncompliance risks among the largest partnerships by September 30, 2024. As part of this plan, officials said subject matter experts will review a sample of large partnership returns selected from all categories of identified risk. This is intended to improve the statistical models' ability to identify potential noncompliance. We will continue to monitor IRS's efforts to address our recommendation.
Internal Revenue Service The Commissioner of Internal Revenue should test and validate the key assumptions used in IRS's partnership models through analysis of data on audit outcomes or other research and develop a formal process for using audit results and other data as they become available to improve model performance. (Recommendation 2)
Open
IRS agreed with the recommendation. In January 2024, IRS officials described plans to gather and utilize feedback throughout the examination process to improve modeling efforts. We will continue to monitor IRS's efforts to address our recommendation.
Internal Revenue Service The Commissioner of Internal Revenue should develop guidance defining large, complex partnerships and the characteristics of those entities. (Recommendation 3)
Open
IRS agreed with the recommendation. In January 2024, officials reported they are working with IRS research officials to understand the partnership population and identify more specific segments of partnerships. We will continue to monitor IRS's efforts to address our recommendation.
Internal Revenue Service The Commissioner of Internal Revenue should identify and implement measures for tracking progress toward agency objectives that reflect the definitions and guidance for large, complex partnerships, which should include creating additional activity codes for IRS to track audit resources used and results. (Recommendation 4)
Open
IRS officials reported in January 2024 that they partially agree with this recommendation. Officials agree that it is important to track progress. However, they do not agree that creating additional activity codes are necessary. They believe that the agency's existing codes are sufficient to track staffing and audit results of partnership compliance efforts. However, our review of audit data calls into question how effective using these codes has been. We found that IRS in recent decades audited few large partnerships. Further, the recent directive by the Secretary of the Treasury and IRS Commissioner to use Inflation Reduction Act funding to focus audit efforts on the largest and most complex partnerships makes it important that officials be able to identify such partnerships. We will continue to monitor IRS's efforts to address our recommendation.