GAO:
Mismanagement Continues to Plague IRS
Chairman Thompson Frustrated by Lack of Progress
Washington, DC --
Senate Governmental Affairs Committee Chairman Fred Thompson (R-TN)
today expressed his disappointment over the continued mismanagement at
the Internal Revenue Service (IRS) following the release of a General
Accounting Office (GAO) report on the agency. According to GAO, the
IRS still can’t adequately track tax payments, doesn’t know how
much money comes in for Social Security, and is providing access to
cash, checks, and sensitive taxpayer information to known criminals.
Governmental
Affairs Committee Chairman Fred Thompson, who held hearings on
management at the IRS in 1997 and 1998, said of the report, "Poll
after poll shows that Americans are losing faith in their government.
And once again we see that the IRS can’t keep its own books while
demanding that taxpayers keep theirs."
The GAO report –
an audit required under the Chief Financial Officers Act – details
the extent of the problems at IRS:
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IRS is slow to
correct erroneous assessments against taxpayers. In one case, it
took 18 months for IRS to correct an input error that resulted in
an erroneous assessment of over $160,000 against a taxpayer who
was actually due a refund.
-
Because of
computer security weaknesses, individuals are capable of obtaining
personal taxpayer information and using it to commit financial
crimes in the taxpayer’s name (identity fraud), such as
fraudulently establishing credit and running up debts.
-
IRS is giving
access to cash, checks, and personal taxpayer information to known
criminals. GAO found that 4,835 employees were hired to process
taxes before fingerprint checks were completed. It was
later discovered that employees had unsuitable backgrounds, such
as previous theft, assault, or weapons charges.
-
IRS is unable
to determine the specific amount of revenue it actually collects
for Social Security, Medicare, Highway, or other relevant trust
funds.
-
IRS has no idea
how much it owns in property and equipment. According to its
records, IRS didn’t know it had possession of such things as
videoconferencing equipment and 3 recently acquired mail-sorting
machines that cost over $800,000 each.
Senator Thompson
said, "This audit shows that IRS doesn’t know how much money is
coming in or where that money is going. It shows that IRS sends money
back to people who owe taxes and make erroneous assessments against
those who don’t. Perhaps worst of all, IRS is giving custody of
checks and cash and access to personal taxpayer information to
criminals. In one case, GAO reports that service center guards and
staff did not i.d. a courier before giving him a $28 million deposit,
even though he was not the regular courier."
In 1998, IRS reform
legislation was passed and enacted that promised to protect taxpayers
by increasing oversight of IRS, holding employees accountable for
their actions and creating a new arsenal of taxpayer protections.
Senator Thompson
remarked, "I applaud Chairman (Charles) Rosotti’s efforts and I
think he’s the right man for the job. But, this audit shows just how
difficult it is to implement good management practices in federal
agencies. These problems are long lasting and he still has to make
considerable progress to meet the standards the public expects."
# # #
A copy of the GAO audit is
available at the Governmental Affairs Committee, 340 Dirksen.