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Statutory Audits. January 1999. Mandatory Audit Coverage (all audits start in 1/99 except as noted). Mandatory Audit Coverage (all audits start in 1/99 except as noted). Mandatory Audit Coverage Initial Planning Work. Researched RRA98, IRC, intent of law.

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statutory audits

Statutory Audits

January 1999

mandatory audit coverage initial planning work
Mandatory Audit CoverageInitial Planning Work
  • Researched RRA98, IRC, intent of law.
  • Met with N.O. officials to discuss sources of information, existing systems of records to capture new provisions, planned IRM changes, etc.
  • Met with limited district personnel on plans for implementing RRA98.
  • Prepared draft audit plans.
mandatory audit coverage premise
Mandatory Audit CoveragePremise
  • Scope would start from date of enactment.
  • Objective would be focused only on TIGTA mandates, not our traditional full-scope obj.
  • Initial reviews will evaluate the effectiveness of control systems to determine reliability of populations.
  • Due to limited timeframes for first round, we limited the obj to what we could accomplish. Next round would continue in 4th Q FY99.
format for presentation
Format for Presentation
  • Explanation of RRA98 Provision
  • Status of IRS Implementation
  • Current IRS Management Control System
  • Audit Objective
  • Estimated Population (if known)
  • Projecting Results
  • Status of EDP Request
seizures levies mandatory
Seizures & Levies(Mandatory)

Explanation of the Provision

The TIGTA shall evaluate the IRS’s compliance with required procedures for seizure of property for collection of taxes, including required procedures under IRC § 6330 regarding levies.

IRC§6330 requires pre-notification and the opportunity for a formal hearing and judicial review to taxpayers against whose property the IRS may levy.

seizures levies
Seizures & Levies

Status of the IRS’s Implementation

The IRS has issued guidelines for most RRA98 provisions regarding seizures and levies. The IRS is in the process of developing procedures for personal residence seizures. New procedures are also being developed for the new levy notice. RRA98 mandates that the Service start sending the levy notice on January 18, 1999.

seizures levies1
Seizures & Levies

Current IRS Management Control System

The only known management control system is the Collection quality review system, CQMS. CQMS reviews a sampling of TDA cases to determine the overall quality of closed TDA cases. Management uses the program to determine root causes of quality deficiencies and to develop positive plans for improvement.

seizures levies2
Seizures & Levies

Audit Objective

Determine if levies and seizures conducted by the IRS adhere to legal guidelines set forth in IRC Ch. 64, subch D, incl IRC § 6330, which was added by RRA98. Audit will cover all aspects of levies and seizures of all types of properties from initiation of field collection activity to the final disposition of the asset.

seizures only
Seizures (only)

Population

  • 118 (5 DO + PR had no seizures)

Projecting Results

  • N/A - 100% case review

Status of EDP Request

  • None needed
levies only
Levies (only)

Estimated Population

  • Unknown

Projecting Results

  • Can not identify entire population

Status of EDP Request

  • None needed at this time
liens mandatory
Liens(Mandatory)

Explanation of the Provision

The TIGTA shall evaluate the IRS’s compliance with required procedures under IRC § 6320 upon the filing of a notice of lien.

IRC § 6320 requires that taxpayers, against whom a Notice of Federal Tax Lien has been filed, receive notification and the opportunity to request a formal hearing.

liens
Liens

Status of the IRS’s Implementation

The Service is in the process of designing the new lien notice and developing procedures for issuing the notice before the January 18, 1999 implementation date.

liens1
Liens

Current IRS Management Control System

There is no known management control system in place at this time to ensure that the new notice is issued to taxpayers as mandated by IRC § 6320. The IRS may be able to use either ALS or Master File to ensure that the notices are issued after the lien filing.

liens2
Liens

Audit Objective

Determine if the IRS is complying with IRC § 6320 regarding the issuance of lien notices to taxpayers within five days after filing the lien and to determine if the IRS is properly adhering to procedures regarding taxpayer’s request for a hearing. We will also ensure that all applicable law or administrative procedures have been met for all taxpayers requesting a hearing (IRC § 6330).

liens3
Liens

Estimated Population

  • Unknown

Projecting Results

  • Plan to sample 6 weeks of data

Status of EDP Request

  • Request for Jan/Feb 99 liens has been submitted
enforcement statistics mandatory
Enforcement Statistics(Mandatory)

Explanation of the Provision

TheTIGTA shall evaluate the IRS’s compliance with RRA98 restrictions on the use of enforcement statistics to evaluate IRS employees.

Status of the IRS’s Implementation

IRS is revising the IRM and has determined director certifications will be centrally filed. Front-line forms will be filed in the local offices (District or POD).

enforcement statistics
Enforcement Statistics

Current IRS Management Control System

  • Cross-functional independent management review 12/31/98, 6/30/99 and annually thereafter to correspond with the quarter ending 6/30.
  • IRM guidelines to be established by January 1999.
enforcement statistics1
Enforcement Statistics

Audit Objective

Determine the IRS’s compliance with restrictions on the use of enforcement statistics to evaluate IRS employees. We will also determine if the IRS is using “fair and equitable treatment” as an evaluation standard.

enforcement statistics2
Enforcement Statistics

Estimated Population

  • Can not be determined

Projecting Results

  • Can not identify entire population

Status of EDP Request

  • None needed
direct contact with taxpayers versus representatives
Direct Contact with Taxpayers Versus Representatives

(Mandatory)

Explanation of the Provision

TIGTA shall evaluate the IRS’s compliance with restrictions under IRC § 7521(b)(2) on directly contacting taxpayers who have indicated that they prefer their representatives be contacted. We will also include IRC § 7521(c) provisions on notifying a taxpayer directly that their rep is causing unreasonable delay or hindrance.

direct contact with taxpayers versus representatives1
Direct Contact with Taxpayers Versus Representatives

Status of the IRS’s Implementation

  • There is no new law requiring implementation.
  • However, there are no IRS systems to capture this information (suspended interviews that resulted in taxpayer representation). Only case files may document this situation.
direct contact with taxpayers versus representatives2
Direct Contact with Taxpayers Versus Representatives

Current IRS Management Control System

  • There is no management control system identified other than the local and national procedures requiring the employee to suspend the interview.
  • There is no system to capture the information when this issue arises; therefore, there are no reports for management to use to monitor the issue.
direct contact with taxpayers versus representatives3
Direct Contact with Taxpayers Versus Representatives

Audit Objective

Evaluate the IRS’s compliance with restrictions under IRC § 7521(b)(2) and (c) regarding directly contacting taxpayers. We will also determine if any IRS systems capture this information.

direct contact with taxpayers versus representatives4
Direct Contact with Taxpayers Versus Representatives

Estimated Population

  • Unknown

Projecting Results

  • Can not identify entire population

Status of EDP Request

  • None needed
fair debt collection act for information only
Fair Debt Collection Act(For Information Only)

Explanation of the Provision

TIGTA shall report information regarding any administrative or civil actions with respect to violations of the fair debt collection provisions of IRC § 6304, including a summary of judgments or awards granted.

Status of the IRS’s Implementation

Collection issued an August 31, 1998 memorandum that outlined guidelines advising employees of these requirements.

fair debt collection act
Fair Debt Collection Act

Current IRS Management Control System

The Service is currently amending the IRM to incorporate procedures for employees to follow to meet the fair debt collection provisions. However, we have not been able to determine if the IRS is implementing any control system to ensure the provisions are to be met.

fair debt collection act1
Fair Debt Collection Act

Audit Objective

Obtain information regarding any administrative or civil actions resulting from violations of the fair debt collection provision as required by IRC § 6304. This will include a summary of judgments or awards granted to taxpayers. We will also determine if any IRS systems capture this information.

fair debt collection act2
Fair Debt Collection Act

Estimated Population

  • Unknown

Projecting Results

  • Can not identify entire population

Status of EDP Request

  • None identified at this time
taxpayer designations mandatory
Taxpayer Designations(Mandatory)

Explanation of the Provision

TIGTA shall evaluate the IRS’s compliance with restrictions under RRA98 Section 3707 on designation of TPs. Sec. 3707 prohibits IRS from designating TPs as illegal tax protesters and requires IRS to remove these protestor designations from the IMF and to disregard such designations on other systems. Also, nonfiler designations must be removed once the TP has filed and paid tax returns for 2 consecutive years.

taxpayer designations
Taxpayer Designations

Status of the IRS’s Implementation

  • Employees in the field have been educated on the new law. Related IRM sections are being revised to reflect the elimination of the ITP designation.
  • A RIS to eliminate the ITP designation from the Master File as required by RRA98 has been approved and is in process. This RIS is to be completed by January 15, 1999.
taxpayer designations1
Taxpayer Designations

Current IRS Management Control System

The IRS is establishing new procedures to eliminate the ITP designation (and possibly implement another program) and to monitor the new UTAAP nonfiler designation.

taxpayer designations2
Taxpayer Designations

Audit Objective

Determine if the ITP designation has been eliminated from the IMF/BMF and is being disregarded in the field offices, and the nonfiler designation is being monitored. We will also ensure that any new taxpayer designations meet the intent of the law.

(note: only accounts on active MF will be reviewed, not retention register accounts)

taxpayer designations3
Taxpayer Designations

Estimated Population

  • Unknown

Projecting Results

  • N/A - 100% match to be performed

Status of EDP Request

  • “Before date of law” data received
  • “After date of law” request to be submitted
foia mandatory
FOIA(Mandatory)

Explanation of the Provision

TIGTA shall report information regarding improper denial of requests for information from the IRS identified under paragraph (3)(A), which states TIGTA shall conduct periodic audits of a statistically valid sample of the total number of determinations made by the IRS to deny written requests based on FOIA or the Privacy Act.

slide37
FOIA

Status of the IRS’s Implementation

No new law requiring implementation was created by the Act.

slide38
FOIA

Current IRS Management Control System

Disclosure is responsible for the Service’s disclosure program, including the FOIA, which provides for public access to records maintained by Federal agencies. This office ensures Treasury’s compliance with the law, has oversight and reporting responsibilities, provides guidance on procedural and policy matters, and provides FOIA-related training.

slide39
FOIA

Audit Objective

Determine if the IRS is properly applying the exemptions cited under IRC § 6103 or section 552(b)(7) of title 5, United States Code to deny written requests for information; and to identify the process for controlling the requests for information under FOIA or the Privacy Act.

slide40
FOIA

Estimated Population

  • 3,700 (FY 98)

Projecting Results

  • Projectable over a partial period

Status of EDP Request

  • FY 98 data received (7/18-9/30/98)
  • FY 99 data to be received 1/29/99
disclosure and joint filers mandatory
Disclosure and Joint Filers(Mandatory)

Explanation of the Provision

The TIGTA shall review and certify whether or not the Secretary is complying with the requirements of IRC § 6103(e)(8) to disclose information to an individual filing a joint return on collection activity involving the other individual filing the return.

disclosure and joint filers
Disclosure and Joint Filers

Status of the IRS’s Implementation

This IRC section has been in effect since 1996.

As of December 1998, the IRS has not decided who should be responsible for this issue.

disclosure and joint filers1
Disclosure and Joint Filers

Current IRS Management Control System

  • We know of no management control system at this time.
  • In fact, we have found that this information is being disclosed verbally.
disclosure and joint filers2
Disclosure and Joint Filers

Audit Objective

Determine if the IRS is complying with the requirements of IRC § 6103(e)(8) and RRA98 section 6109(c) to disclose information on collection activity involving an individual filing a joint return upon the written request of the other individual filing a joint return or a duly authorized representative. We will also determine if any IRS systems capture this information.

disclosure and joint filers3
Disclosure and Joint Filers

Estimated Population

  • Unknown

Projecting Results

  • Can not identify entire population

Status of EDP Request

  • None needed
statutes for information only
Statutes(For Information Only)

Explanation of the Provision

TIGTA shall report information regarding extensions of the statute of limitations for assessment and collection of tax under IRC § 6501 and the provision of notice to taxpayers regarding requests for such extensions.

statutes
Statutes

Status of the IRS’s Implementation

The National Office Examination Division is convening a team in November 1998 to review this area, especially concerning restricted consents and changes to the applicable notices. The revised IRM dealing with statutes should be issued by June 1999.

This law goes into effect January 1, 2000.

statutes1
Statutes

Current IRS Management Control System

Guidelines and procedures are being implemented.

statutes2
Statutes

Audit Objective

Determine if the IRS is complying with IRC § 6501 to inform taxpayers of their right to refuse to extend the assessment statute of limitations, or to limit such extension to a particular issue or time period.

statutes3
Statutes

Date of First Planned Audit

October 1999

terminations and mitigation mandatory
Terminations and Mitigation(Mandatory)

Explanation of the Provision

TIGTA shall report any termination or mitigation under section 1203 of RRA98.

Status of the IRS’s Implementation

TIGTA Investigations and Labor Relations are working together to develop a system to report this information.

terminations and mitigation
Terminations and Mitigation

Current IRS Management Control System

Not determined

terminations and mitigation1
Terminations and Mitigation

Audit Objective

  • Evaluate the IRS’s process used to report these terminations and mitigations. We will also evaluate the systems used to report these violations.
terminations and mitigation2
Terminations and Mitigation

Estimated Population

  • Unknown

Projecting Results

  • N/A

Status of EDP Request

  • None identified at this time
complaints and allegations of employee misconduct
Complaints and Allegations of Employee Misconduct

(Mandatory)

Explanation of the Provision

TIGTA is to report the number of taxpayer complaints and employee misconduct/abuse allegations received by the IRS or the IG, with a summary of the status and disposition of the serious employee misconduct cases.

complaints and allegations of employee misconduct1
Complaints and Allegations of Employee Misconduct

Status of the IRS’s Implementation

TIGTA Investigations and Labor Relations are working together to develop a system to report this information.

slide57

Complaints and Allegations of Employee Misconduct

Audit Objective

Evaluate the IRS’s process used to report these complaints and allegations. We will also evaluate the systems used to report these violations.

complaints and allegations of employee misconduct2
Complaints and Allegations of Employee Misconduct

Estimated Population

  • Unknown

Projecting Results

  • N/A

Status of EDP Request

  • None identified