IRS Knocked for Not Proving 'Savings'

The Internal Revenue Service received a double barrel of criticism from Treasury Department watchdogs for not validating the amount of savings it claimed it would generate from various taxpayer service projects, and for laxness in security.

The Treasury Inspector General for Tax Administration issued two reports on the IRS shortcomings. In one report, TIGTA said the IRS had estimated it would achieve more than $160 million in savings on taxpayer service in fiscal 2006 and 2007 from various re-engineering and improvement projects, as well as from efficiency initiatives. That was supposed to make up for cuts in funding for taxpayer service.

But TIGTA complained that neither the estimates nor the achievements could be validated or supported. The report warns that when budget savings are estimated without an adequate analysis of the effect on the level of taxpayer service, the budget may not provide enough resources to offer sufficient service.

In the other report, TIGTA chided the IRS for lax security procedures, echoing another recent report that faulted IRS employees for changing their passwords at the behest of unauthorized callers (see IRS Security Still Lax). The new report criticized employees for not safeguarding their laptop computers, not encrypting the data on their computers, and ignoring IRS policies on the use of e-mail. "Even employees with key security responsibilities continue to ignore standard security configurations, often for their own convenience," said the report.

However, TIGTA did note that the IRS has made great strides in improving security in recent years, including the establishment of a Security Services and Privacy Executive Steering Committee.