The Treasury Inspector General for Tax Administration has released a report to Congress, outlining a trio of priority objectives for the upcoming year. The report highlights the office’s audit and investigative work conducted between April 1 and Sept. 30 of this year. During those six months, TIGTA reports that it has completed 118 audits, and in the process, identifying more than $258 million in total cost savings and $1.4 billion in increased or protected revenue.

In a letter accompanying the report, inspector general J. Russell George outlined his three priorities for 2007, which include:

  • Overseeing IRS efforts to modernize technology;
  • Enhancing TIGTA’s ability to protect tax administration from corruption; and,
  • Monitoring IRS initiatives to improve tax compliance, which now includes the use of private debt collection agencies.

“As the IRS modernizes its systems through the Business Systems Modernization program, it is essential that contractor performance and accountability be effectively managed,” George wrote.Now in its eighth year, the modernization program has cost more than $2 billion, and George noted that the recent contractor failure to implement a redesigned Electronic Fraud Detection System demonstrated the significant consequences -- the inefficient use of more than $20 million in contractor payments, and the agency’s inability to identify potentially millions of dollars in fraudulent refunds during the 2006 filing season -- of inadequate supervision of IRS contractors.
George said that his agency has investigated more than 1,500 cases over those six months that involve protecting tax administration from corruption -- including reports of possible identity theft in the private and public sectors, and alerting to the public to possible Internet “phishing” schemes.

Finally, George said that his office continues to work with the IRS to find an appropriate balance between enhancing taxpayer assistance and providing tools for effective enforcement to close the tax gap.

The full report is available at www.ustreas.gov/tigta/semiannual/semiannual_dec2006.pdf.

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