The Treasury Inspector General for Tax Administration has released its Semiannual Report to Congress, with a special focus on how the Internal Revenue Service has handled its responsibilities under the Affordable Care Act.
The report, which covers the period from April 1, 2014 to Sept. 30, 2014, highlights TIGTA’s most notable audits, investigations, inspections and evaluations during the period.
“One of the most critical challenges currently confronting the IRS is the implementation of the [ACA], which represents the largest set of tax law changes in more than 20 years,” stated Inspector General J. Russell George. “Accordingly, this report contains a special section describing our audit work this reporting period assessing the IRS’s initial efforts to implement the ACA’s tax provisions.”
For instance, one TIGTA audit examined the adequacy of safeguards to protect the confidentiality of federal tax information that the IRS sends to federal and state insurance exchanges, George wrote.
Another report assesses the IRS’s efforts to ensure the accurate reporting and payment of the ACA’s medical device excise tax, he indicated. “In this audit, we identified discrepancies totaling almost $117.8 million between the amount of the medical device excise tax captured by the IRS and the amount TIGTA calculated to be due,” he said.
The report also presents findings on the security of taxpayer data and the IRS’s customer service efforts. Other areas reviewed include international and domestic collections, and IRS modernization.
George noted the rapid escalation of a telephone scam that involves the impersonation of IRS employees. As of the date of the report, TIGTA has received reports of over 154,000 contacts by individuals posing as IRS employees in an attempt to extort money. Reported taxpayer monetary losses exceeded $9 million.
“Impersonation of the IRS falls within the investigative jurisdiction of TIGTA, and TIGTA is conducting a thorough investigation into this matter,” George stated. “In the meantime, all taxpayers should remain vigilant to avoid becoming a victim of this scam,” he said.
Among the other investigations cited in the report was the instance of an IRS tax examining technician who was sentenced for aggravated identity theft and mail fraud. As part of her official IRS duties, the technician had access to taxpayers’ personal identifiers, including names, Social Security numbers, dates of birth, and addresses, as well as information about tax professionals. She used this access in furtherance of an identity theft scheme that included the filing of fraudulent tax returns and the subsequent theft of refunds.
The technician has been sentenced to 57 months of imprisonment, followed by five years of supervised release, and was ordered to pay $501,000 in restitution to the IRS.
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