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Part 1. Organization, Finance and Management

Chapter 55. Wage and Investment

Section 6. W&I Government Accountability Office (GAO) and Treasury Inspector General for Tax Administration (TIGTA) Post-Audit Process

1.55.6  W&I Government Accountability Office (GAO) and Treasury Inspector General for Tax Administration (TIGTA) Post-Audit Process

1.55.6.1  (01-27-2009)
Overview

  1. The Internal Revenue Service (IRS) is subject to annual audits conducted by the GAO and the TIGTA to ensure its programs and activities are operating according to established policies and procedures. The Office of Internal Controls (OIC) administers the agency's management control programs. Within the Wage and Investment (W&I) division the Office of the Director, Planning, Research and Analysis, maintains program oversight. Management controls are identified as:

    • A-123 Assessments

    • Remediation Plans

    • Material Weaknesses

    • Significant Deficiencies

    • GAO and TIGTA Audit Corrective Action Plans

1.55.6.2  (01-27-2009)
Management Systems

  1. In accordance with the Audit/Federal Managers Financial Integrity Act/Federal Financial Management Improvement Act, the Office of Management Controls tracks the status of all IRS Material Weakness, National Significant Control Deficiency (NSCD) and audit action plans and financial accomplishments. The information contained in these plans is used to assess the effectiveness and progress that IRS is making in correcting weaknesses and implementing recommendations.

  2. The Joint Audit Management Enterprise System (JAMES) is a U.S. Treasury owned web based system used to track information associated with audit reports issued by the Treasury Office of Inspector General (OIG), the Treasury Inspector General for Tax Administration (TIGTA), and the Government Accountability Office (GAO). The JAMES also tracks IRS corrective action plans that address findings from internal management reviews, information on the Federal Managers' Financial Integrity Act (FMFIA), material weaknesses, significant deficiencies, Federal Financial Management Improvement Act (FFMIA) remediation plans, as well as IRS' responses to recommendations made by the National Taxpayer Advocate (NTA) in the Annual Report to Congress.

  3. Program users are issued a logon and password from Treasury to assess the system.

  4. Management controls data can be extracted from the JAMES by responsible organization (business division), responsible employee (business function), or control number.

1.55.6.3  (01-27-2009)
Organization and Responsible Employee Codes

  1. Corrective action plans tracked in the JAMES are identified by organizational symbols. The lead business division's organizational symbols are extended to the third level; organizational symbols for the responsible function within the business unit are extended to the fourth level. See table 1.1.

    Table 1.1. – W&I Organizational Codes

    Responsible Business Unit Organizational Symbols Responsible Business Function Within the Unit Organizational Symbols
    Customer Account Services SE:W:CAS Joint Operations Center SE:W:CAS:JOC
        Accounts Management SE:W:CAS:AM
      Submission Processing SE:W:CAS:SP
        Electronic Products Service & Support SE:W:CAS:EPSS
    Customer Assistance, Relationships and Education: SE:W:CAR Stakeholder Partnerships, Education and Communications SE:W:CAR:SPEC
        Media and Publications SE:W:CAR:MP
    Compliance SE:W:CP Program Management SE:W:CP:PM
    Earned Income Tax Credit SE:W:EITC    
    Electronic Tax Administration Refundable Credit SE:W:ETARC    

1.55.6.4  (01-27-2009)
Roles and Responsibilities

  1. The Office of Internal Controls (OIC) has program oversight for all Internal Revenue Service (IRS) Government Accountability Office (GAO) and Treasury Inspector General for Tax Administration (TIGTA) audit corrective action plans (findings, recommendations and planned corrective actions). Business Unit and field coordinators assist in managing the post-audit inventory.

  2. The OIC Desk Officer is responsible for:

    1. Serving as the liaison between the business division and the Department of Treasury

    2. Coordinating the completion of management controls with each business division

    3. Establishing reports in the JAMES tracking system of IRS' corrective action plans, reports, material weaknesses, control deficiencies, and remediation plans

    4. Reviewing and validating all Program Office (PO) User (business unit coordinators) entries into the JAMES that implement or delay corrective action plans

    5. Preparing reports/charts regarding IRS audit(s); material weaknesses; remediation plan(s); and status and inventory activities

  3. The W&I Business Division Coordinator is responsible for:

    1. Serving as the liaison between Wage and Investment (W&I) and the OIC

    2. Overseeing the completion of W&I GAO/TIGTA corrective action plan inventory

    3. Coordinating status updates with each business unit coordinator

    4. Preparing and providing status reports to W&I management

    5. Serving as the business division JAMES coordinator

    6. Maintaining final audit and post-audit records

    7. Reconciling the business division corrective action plan inventory

  4. The W&I Functional Unit Coordinator is responsible for:

    1. Verifying and tracking post-audit GAO/TIGTA activity

    2. Serving as the business unit JAMES coordinator

    3. Ensuring activities required to implement corrective action plans are monitored and completed by field personnel

    4. Preparing and providing status reports through the business unit to division headquarters management and the OIC

    5. Updating the status of corrective action plans

    6. Conducting a review of the action status and inventory

    7. Reconciling the business unit’s corrective action plans inventory

    8. Preparing ad hoc reports

    9. Maintaining audit files

1.55.6.5  (01-27-2009)
Tracking Corrective Action Plans

  1. At the close of an audit, a corrective action report is entered into the JAMES. The JAMES is an interactive, on-line, real-time system developed and owned by the U.S. Department of Treasury. In order for management to comply with the OIC’s reporting requirements, each corrective action within an action plan has an estimated implementation date. JAMES tracks corrective action plans for all Treasury Department agencies by the projected implementation date.

  2. The OIC has agency-wide program responsibility for the JAMES and, in addition to tracking audit corrective action data, it is used to manage other internal controls. Business division coordinators as well as functional coordinators can be granted access to the JAMES at the Bureau Program Office level to query and update corrective action plans, run standard reports, and create ad hoc reports.

  3. A new corrective action report number is assigned. This number tracks post-GAO and TIGTA audit activity. For TIGTA, the report numbering sequence changes from the working audit number (for example, 200540044) to the corrective action plan report number (for example 2005-40-018). The two middle digits usually represent the lead stakeholder of the corrective action plan. For a list of codes, see Table 1.2.

  4. For GAO, the numbering sequence usually changes from the job code under which the work was conducted (for example, 450389) to the corrective action plan report number (for example GAO-05-62). The two middle digits represent the fiscal year in which the report was issued.

    Table 1.2 Business Division Codes

    Two Digit Number IRS Business Unit
    10 Headquarters Operations and Exempt Organizations Programs
    20 Information Systems Programs
    30 Small Business and Corporate Programs
    40 Wage and Investment Income Programs

1.55.6.5.1  (01-27-2009)
Obtaining Access to the Joint Audit Management Enterprise System(JAMES)

  1. Access the Deputy Chief Financial Officer's (DCFO) web page at https://hqapps.treas.gov/dcfo/Lists/FARS%20Documents/New%20View3.htm and access links to complete the following documents:

    • Security Awareness On-Line Training - Save the certificate of completion that generates at the end. To get an official " Training Verification" receipt, complete your email address on the information form. Retain a copy of the email from Treasnet@do.treas.gov, this should generate once you exit the Treasury site. Recertification of the security training is completed annually.

    • Revised FARS Access Request Form - Complete form for manager's signature. Select "Bureau PO User" for full level of access or "Bureau PO Report" for read-only access.

    • FARS Rules of Behavior Document- Read the Rules of Behavior and complete the FARS Rule of Behavior Signature Page at the end of the document.

  2. Email all four documents to the W&I JAMES Coordinator.

  3. In one to two weeks you should receive an informational email from the OIC desk officer with a cc: to the W&I JAMES Coordinator notifying you that access has been granted and supplying you with your user id and password.

    Note:

    New accounts will expire after six months of inactivity.

1.55.6.5.2  (01-27-2009)
Verifying the JAMES Reports

  1. When new actions are entered into the JAMES, the OIC desk officer sends a notification email to the business division. See Exhibit 1.55.6-1. for an example. The verification process involves the division coordinator and the business unit coordinator reviewing the JAMES report (findings, recommendations and corrective action plans) for accuracy and returning a notification of concurrence or non-concurrence. See Exhibit 1.55.6-2 for an example of a concurrence memo. See Exhibit 1.55.6-3 for an example of a non-concurrence memo. If more than one business unit is identified as the owner, a separate notification is forwarded to each business unit.

  2. The OIC desk officer, the W&I division coordinator, and the business unit program coordinator each play significant roles in ensuring corrective action plans are implemented and reported to Congress timely.

  3. The OIC desk officer is responsible for:

    1. Receiving notification of an audit closing from GAO or TIGTA

    2. Entering the report into the JAMES

    3. Identifying the responsible business division and/or functional program coordinators of the corrective action plan(s)

    4. Noting reports issued without recommendations

    5. Requesting missing corrective action plan(s) if necessary

    6. Notifying the responsible business division and/or functional program coordinators the corrective action report is being tracked in the JAMES

  4. The W&I business division coordinator is responsible for:

    1. Receiving notification of new actions being tracked in the JAMES

    2. Preparing memos of concurrence and/or non-concurrence for each responsible function identified in the JAMES report according to IRM 1.10.1, The Internal Revenue Service Correspondence Manual.

    3. Notifying the business unit functional coordinator of the response due date

    4. Tracking corrective action plans until completion

  5. The W&I functional coordinator is responsible for:

    1. Confirming finding(s), recommendation(s), and corrective action(s) are stated accurately

    2. Ensuring the due date of the corrective action is the 15th day of the month

    3. Ensuring the correct responsible official is designated

    4. Ensuring potential monetary benefits are correctly stated and a tracking method is in place to account for the realized/unrealized benefits when the recommendation is implemented

    5. Obtaining authorized signatures; the business unit program coordinator should sign the concurrence memo unless there is a substantial disagreement with the findings, recommendations, corrective action(s), or monetary benefits are addressed; when this occurs, the non-concurrence memo should clearly address the discrepancies and monetary benefit types and amounts. The responsible executive within the function should sign the memo.

    6. Ensuring the concurrence or non-concurrence memo is returned to the OIC on or before the due date; usually within 30 - 45 days after the issuance of the final audit report

    Note:

    For a GAO audit, the OIC may request verification of a JAMES report containing only the findings and recommendations. When this occurs, OIC makes an open request for the business unit to submit the missing action plan(s) including corrective action(s); established due date(s); and the responsible official(s). This information should be outlined in the 60 day response.

  6. For a TIGTA audit, the OIC may request verification of a JAMES report entered as closed which contains only findings with no reported recommendations. The business unit coordinator should still be contacted to concur or not concur with the information in the report. The data tracked in the JAMES is reported to Congress through the Department of Treasury; therefore, the accuracy of the information is very important.

  7. Management takes a significant interest in addressing any corrective action plans involving the realization of monetary benefits. Agency policy requires executive concurrence and ensuring full engagement in the approval process. Before the OIC can totally implement an action plan, the business division must address any realized monetary benefits. See Exhibit 1.55.6-4. for an example of a concurrence memorandum addressing monetary benefits.

1.55.6.6  (01-27-2009)
Updating the Status of a Corrective Action Plan(s)

  1. Activities in corrective action plans can be updated to delay the original due date; or from open to implemented, cancelled or superseded. When activities are delayed, it generally means an unscheduled event has occurred, or a resource or essential programming needed to implement the planned activity by the original due date is not available. Due dates of open action plans should be closely monitored to ensure actions are updated timely and actions taken accurately complete the recommended task.

  2. A "place holder" action plan may be established allowing management to address recommendations before the final due date. Actions in a "place holder" action plan are usually presented in complete or partial steps pending outcomes of task forces, studies, or annual reviews. The action plan as well as the place holder plan should clearly identify those actions management intends to take on the agreed-upon recommendation(s).

  3. If a "place holder" action plan is being tracked in the JAMES, management has time to address and implement the plan while considering their options or desired future goals. Management can also reassess the situation and provide a new action plan with a delayed due date that fully addresses the recommendation(s) or provides a "place holder " action plan and delayed due date with steps management will now take to get closer to addressing the recommendation(s).

1.55.6.6.1  (01-27-2009)
Implementing

  1. Most corrective actions are set with an implementation due date of the 15th of the month. Activities implementing the corrective action plan should be completed by the agreed upon due date. The responsible business unit consults with field representatives to ensure activities are completed timely and accurately. See IRM 1.55.6.7. Refer to Table 1.3, The Timely Implementation of Corrective Actions and Table 1.4, Updating the JAMES Timely.

  2. The Form 13872 Planned Corrective Action (PCA) Status Update for TIGTA/GAO/MW/RC/REM Reports is used to document the status change of the corrective action plan.

  3. Executive signature is required on the Form 13872 or the transmittal cover memo. See Exhibit 1.55.6-5. for an example of a Status Update Cover Memo. The contact person(s) listed on the update form should be a subject-matter expert in case the OIC, TIGTA, GAO, or a management official needs clarification regarding activities related to the corrective action plan. The signature of the responsible business unit JAMES coordinator is also required. Documentation that does not reflect the appropriate signatures or contain the required information should be returned for correction.

1.55.6.6.1.1  (01-27-2009)
Monetary Benefits

  1. Potential monetary benefits represent either the possible dollar amounts available (cost savings) or the funds gained (additional revenue) when recommendations from an audit are implemented.

  2. When updating a corrective action in the JAMES with identified outcome measures, a status update of "implemented" may not be accepted without noting the results of agreed to outcome measure(s) (including a zero amount). This figure is input for the actual realized monetary benefits. The category of the realized monetary benefit should be the same as the potential monetary benefit first identified. There are only three monetary outcome measures tracked in the JAMES, they are "Increased Revenue" , "Funds Put to Better Use" , and "Questioned Costs " .

1.55.6.6.2  (01-27-2009)
Canceling

  1. When the implementation of an agreed-upon corrective action plan first identified in the final audit report is not possible, a request to cancel or close an action(s) can be made to the auditing agency. The request to cancel a corrective action plan should be approved before the due date identified in the JAMES. The reasoning should be clear, and the justification substantiated. See Exhibit 1.55.6-6. for an example of A Request to Cancel a Corrective Action.

  2. To request cancellation of a TIGTA action, prepare a memo for the signature of the business unit director, address the memo to the Inspector General. Copy the OIC. A notification of TIGTA's decision to concur or not concur will be returned. See Exhibit 1.55.6-7. for an example of a Concurrence to Cancel An Action From The Auditing Agency.

  3. To request cancellation of a GAO corrective action, address the memo to the Director, Office of Internal Controls and that office will route the request to the GAO.

1.55.6.6.3  (01-27-2009)
Superseding

  1. When an audit produces action(s) previously recommended in another audit, and that action is still open, the status of the previous action will be updated from "open" to "superseded." The recommended action will then be tracked through the new report. The repeat audit indicator field in the JAMES should also be updated.

1.55.6.6.4  (01-27-2009)
Delaying

  1. When an activity, program or product required to implement a corrective action plan is unattainable by the original due date, implementation of the corrective action is usually postponed. A status update and justification is required; the status remains open and a historical record of each delay is tracked.

    Note:

    Delaying the implementation of an action past the original due date is considered a missed response date by the Department of Treasury. The agency's missed responses and extended due dates of planned corrective actions are periodically reported to Congress. This same information is shared with W&I executives on a monthly basis.

1.55.6.7  (01-27-2009)
Timeliness

  1. The activities implementing corrective action plans must be completed by the agreed-upon date to be considered reported timely. The JAMES, used to track post-audit activity, must also be updated in a timely manner. The OIC requires all status changes (implementations, cancellations, delays and supersedes) to be input into the JAMES on or before the due date. Tables 1.3 and 1.4 show criteria for updating and implementing all corrective action.

    Table 1.3. – The Timely Implementation of Corrective Actions

    If ... And ... Then ...
    Actions implementing a corrective action plan have a due date in the JAMES of December 15, and are completed by December 15; The cover memo or Form 13872 Planned Corrective Action (PCA) Status Update for GAO/TIGTA Reports is signed on, or before December 15. The action is considered implemented timely.
    Actions implementing a corrective action plan have a due date in the JAMES of December 15, and are not completed by December 15;   The action is considered implemented late.

    Note:

    Functional coordinators are encouraged to submit the appropriate paperwork to the division coordinator which documents the status change of a corrective action plan(s) at least three days prior to the due date. This is to allow adequate time to process the paperwork.

    Table 1.4. – Updating the JAMES Timely

    If ... And ... Then ...
    Corrective action plan due date is December 15; The status change is input into the JAMES on or before December 15th; The action is considered updated timely and the OIC should reflect the implementation date as December 15.
    The corrective action plan due date is December 15; The status change is input into the JAMES after December 15th, but before the OIC’s cutoff date (e.g., December 18); OIC rejects the update; rolls back the status change date to December 15, and considers the PCA updated timely in the JAMES.
    The corrective action plan due date is December 15; The status change is input into the JAMES after December 15th and after the OIC’s cutoff date (e.g., December 26); The status is updated correctly, but the action is considered late.

1.55.6.7.1  (01-27-2009)
Final Validation

  1. The OIC desk officer performs a final review and validates the action in the JAMES. The signed Form 13872 is sent electronically and/or faxed to the OIC desk officer and the business division coordinator and used to validate the JAMES. If additional information is needed, the OIC desk officer should communicate through the business division coordinator.

1.55.6.8  (01-27-2009)
Reports

  1. A variety of reports are used to manage the GAO/TIGTA corrective action inventory and communicate related information about management controls data. Monthly and quarterly reports are prepared to capture the number of actions opened, closed, delayed, and the percentage of timely responses. Some of the data reported is extracted from the JAMES. See Table 1.5 for a list of frequently used reports.

1.55.6.8.1  (01-27-2009)
JAMES Reports

  1. Standard reports are developed and enhanced by programmers at the Department of Treasury. The Reports Menu in the JAMES list over 29 standard reports. Refer to the JAMES User Manual for a complete list of reports.

  2. The JAMES also allows the creation of user defined reports. Data is often extracted from the JAMES and formatted using Microsoft Office applications. Information from almost every data element can be extracted and or used in a formula to report requested information. User defined reports can be shared among JAMES program users. Refer to the JAMES User Manual for assistance in creating user defined reports.

1.55.6.8.2  (01-27-2009)
Frequently Used Reports

  1. Table 1.5 List of Frequently Used Reports

    REPORT TITLE REPORT FUNCTION DATA SOURCE
    A3 - Open Recommendations without PCAs Used to identify reports entered without the planned corrective actions; pending submission of the final response to OIC. Standard Report-JAMES
    A4 - Overdue PCAs Used to identify currently due actions not implemented or the due date is not extended. Ran after the 15th of the month. Standard Report-JAMES
    A5 - Statistical Inventory Used to compare percentage of corrective actions W&I owns. Ran at the agency and division level. Standard Report-JAMES
    A6 - Audit Summary Used to obtain a full report of findings, recommendations, and planned corrective actions for a specific audit. Standard Report-JAMES
    S2 - Scorecard Detail Report Used to report bureau scores of "Met", "Missed" and "Extended" PCAs during a specific timeframe. Standard Report-JAMES
    Actions Currently Due Used to reconcile the Monthly Tracking Report. Ran monthly and sent to the business unit coordinators. User Defined Report - JAMES
    Actions Entered as of Used to reconcile Monthly Tracking Report and Scorecard. Ran in the middle and end of the month. User Defined Report - JAMES
    Actions Closed as of Used to reconcile the Monthly Tracking Report and Scorecard. Ran at the end of the month. User Defined Report - JAMES
    Monthly Tracking Used monthly to capture corrective action counts, activities and specific action numbers. The report is organized by auditing agency and function. Data fields are linked to automatically update the Scorecard. manual tracking
    Reason for Delays Use track the number and reason for delaying corrective actions. manual tracking
    FY Scorecard Used to capture fiscal year corrective action statistics (beginning and ending balances, cumulative counts, and timeliness ratings) by auditing agency. manual tracking
    Operational Review Used to report year-to-date corrective action activity to Strategy and Finance and W&I Directors. manual tracking

1.55.6.9  (01-27-2009)
Records Management

  1. In accordance with the Federal Records Act of 1950 and pursuant Title 44, USC 3102, an official record of a GAO or TIGTA audit should be maintained by the division headquarters office.

  2. The IRS established a records management program to ensure the economical and efficient management of its records. The program provides for the application, on a continuing basis, of sound management practices and techniques in the creation, maintenance, retrieval, preservation and disposition of records. See IRM 1.15.1, The Records Management Program, for additional information. All Federal employees are required by law to preserve records containing adequate and proper documentation of the organization, functions, policies, decisions, procedures and essential transactions of the agency. See also IRM 1.10.3.2.3, E-mails as Possible Federal Records, for additional information.

  3. GAO audit records should be retired to the Washington National Records Center (WNRC) two years after closing, and destroyed when 20 years old.

  4. TIGTA Records should be prepared for retirement to the WNRC two years after closing; transferred in five-year segments (i.e., 1993 – 1998); and destroyed after ten years. Refer to the W&I Record Maintenance Guide for GAO and TIGTA Records for information on how to prepare, file, and maintain audit file folders (this is an internal document).

Exhibit 1.55.6-1  (01-27-2009)
Example of JAMES Report Verification E-mail

RESPONSE DUE DATE: FEBRUARY 17, 2006

The Office of Internal Controls (OIC) is now tracking the following new Treasury Inspector General for Tax Administration (TIGTA) audit reports in Treasury’s Joint Audit Management Enterprise System (JAMES):

  • 2006-40-XXX (TIGTA DRAFT #200540XXX), "INDIVIDUAL INCOME TAX RETURNS WERE TIMELY PROCESSED IN 2005; HOWEVER, IMPLEMENTATION OF TAX LAW CHANGES COULD BE IMPROVED," ISSUED DECEMBER 29, 2005

RESPONSIBLE EMPLOYEE: SE:W:CAR:MP (1-1-1, 2-1-1, 5-1-1)

RESPONSIBLE EMPLOYEE: SE:W:CAR:SP (3-1-1, 4-1-1)

RESPONSIBLE EMPLOYEE: SE:W:CP (3-1-2)

The two GAO audit reports (1 report reopened) listed below each had a recommendation reopened and new corrective action added (see attached A6 reports):

  • AIMD-99-XX (REOPENED CLOSED REPORT), "INTERNAL REVENUE SERVICE: PHYSICAL SECURITY OVER TAXPAYER RECEIPTS AND DATA NEEDS IMPROVEMENT, " ISSUED NOVEMBER 30, 1998

    ADDED CORRECTIVE ACTION 2-7-2 WITH RESPONSIBLE EMPLOYEE: SE:W:CAR:FA

  • GAO-02-XXX, "MGMT RPT: IMPROVEMENTS NEEDED IN IRS' ACCOUNTING PROCEDURES AND INTERNAL CONTROLS," ISSUED JULY 18, 2002

    ADDED CORRECTIVE ACTION 1-1-2 WITH RESPONSIBLE EMPLOYEE: SE:W:CAR:FA

    New Corrective Action(s) – Six (6) new corrective actions were entered into the JAMES during January 2006 (see attached A6 report). If the information is incomplete and/or inaccurate, please notify OIC immediately

    RESPONSIBLE EMPLOYEE: SE:W (1-2-1, 1-3-1, 1-4-1, 1-5-1, 1-6-1 and 1-7-1)

  • GAO-05-XXX, "TAX ADMINISTRATION: IRS NEEDS BETTER STRATEGIC PLANNING AND EVALUATION OF TAXPAYER ASSISTANCE TRAINING," ISSUED JULY 11, 2005 (NOTE: RESPONSIBLE OFFICIAL FOR THIS AUDIT IS OS:HC)

New Audit Report - New audit reports listed above were entered into the JAMES during January 2006. A JAMES A6 audit report abstract is provided as an attachment for these new audit reports. To ensure accuracy of the information reported to Treasury, please review the audit report findings, recommendations, corrective action descriptions and monetary benefits, if applicable. The A6 report can also be reviewed in JAMES by clicking on the "Reports" button and then click "Run - A6 Audit Summary." Please follow the steps below and respond by the response due date at the top of this email:

Notify me immediately (phone/e-mail) if the information contained in the JAMES is incomplete and/or inaccurate

If the information contained in the JAMES is correct, the lead coordinator in the functional area responsible to address the corrective action(s) should send me an e-mail concurrence by the response due date

A concurrence memorandum, signed by a responsible official at the executive level, is only required if there is a substantial disagreement or if monetary benefits have been identified

Future Updates - IRS requires the responsible employee to notify OIC regarding the status of their corrective actions. For a corrective action to be considered entered in the JAMES timely:

All corrective actions due, whether implemented or delayed, must be reported in the JAMES within five working days of the due date

Any implemented corrective action must be completed on or before the current scheduled due date and if applicable, address any potential monetary benefits;

Any implemented or delayed status must be entered into the JAMES by the Bureau Program Office (BPO) user/coordinator;

Proper documentation must be emailed or faxed to OIC for validation - to ensure timely validation of corrective actions updated in the JAMES, the BPO user should notify their desk officer, Bonnie Kelly, by email that they have updated the JAMES and fax all documentation to (202) 435-0000.

OIC will backdate the update five working days to reflect the implementation date. For example: to be considered timely, a corrective action due October 1, 2004, must be completed on or before October 1, 2004, and entered into JAMES by October 7, 2004. OIC has the capability to backdate your entry date to October 1 if you meet the reporting requirements. Rescheduled actions must also be updated in JAMES by the function within five working days of the due date with the required documentation to meet timely reporting requirements.

Transfers and Changes - If responsibility is being transferred to another official, you must provide OIC with a memorandum identifying the report and reason for transfer. The transfer must have a signed concurrence from the accepting official. All information previously received, including this email should be provided to the accepting official. In order to REJECT a recommendation, CANCEL a corrective action, or CHANGE a corrective action, you will need concurrence from the Treasury Inspector General for Tax Administration (TIGTA).

If you have any questions or need further assistance, please contact me on (202) 435-0000.

Thank you.

(name)

Office of Internal Controls OS:CFO:CPIC:IC

CNN Building, Suite 700

Office: 202-435-0000

Fax: 202-435-0000

Exhibit 1.55.6-2  (01-27-2009)
Concurrence Memorandum

Note:

The letter should be left justified and printed on W&I letterhead in accordance with IRM 1.10.1, Office of the Commissioner of Internal Revenue - The IRS Correspondence Manual

RESPONSE DUE DATE: OCTOBER 21, 2005

MEMORANDUM FOR CHIEF OFFICE OF INTERNAL CONTROLS

FROM: DIRECTOR, CUSTOMER ASSISTANCE, RELATIONSHIPS AND EDUCATION (CARE) FOR W & I

SUBJECT: Verification of Joint Audit Management Enterprise System (JAMES) Audit Summary Report

The Customer Assistance, Relationships and Education (CARE) function has been assigned the responsibility of responding to corrective actions associated with the Treasury Inspector General For Tax Administration (TIGTA) audit 2005-40-XXX (200440XXX), "CONTROLS OVER THE PROCESSING OF THE MORTGAGE INTEREST CREDIT NEED TO BE IMPROVED" , ISSUED SEPTEMBER 1, 2005

Please carefully review the findings, recommendations, corrective actions and monetary benefits (if applicable) as reflected in the attached Joint Audit Management Enterprise System (JAMES) Audit Summary Report.

If you concur with the reported information sign below and forward the signed concurrence to the Office of Internal Controls.

If additional information is needed, please contact Carlo Peterson, (function) JAMES Coordinator, at 404-338-0000.

Concur: ________________________________________ Date

(name), JAMES Coordinator for (function) :

Attachment

Exhibit 1.55.6-3  (01-27-2009)
Non-Concurrence Memorandum

Note:

The letter should be left justified and printed on W&I letterhead in accordance with IRM 1.10.1, Office of the Commissioner of Internal Revenue - The IRS Correspondence Manual

RESPONSE DUE DATE: JULY 22, 2005

MEMORANDUM FOR CHIEF OFFICE OF INTERNAL CONTROLS

FROM: DIRECTOR, CUSTOMER ACCOUNT SERVICES (CAS) FOR W&I

SUBJECT: Verification of Joint Audit Management Enterprise System (JAMES) Audit Summary Report

The Customer Assistance Relationships and Education (CARE) function has been assigned the responsibility of responding to specific corrective actions found in the attached JAMES Verification Report, GAO-05-247R, "MANAGEMENT REPORT: IMPROVEMENTS NEEDED IN IRS’ INTERNAL CONTROLS " , ISSUED APRIL 27, 2005.

After careful review, we identified significant discrepancies with information pertaining to the findings, recommendations, corrective actions and or monetary benefits (if applicable).

We specifically do not concur with (fill-in)

If additional information is needed, please contact Carlo Peterson, JAMES Corrective Action Liaison, at 404-338-0000.

Attachment

Exhibit 1.55.6-4  (01-27-2009)
Concurrence Memorandum Addressing Monetary Benefits

Note:

The letter should be left justified and printed on W&I letterhead in accordance with IRM 1.10.1, Office of the Commissioner of Internal Revenue - The IRS Correspondence Manual

February 20, 2006

MEMORANDUM FOR CHIEF OFFICE OF INTERNAL CONTROLS

FROM: Harry D. Caldwell

Director, Customer Assistance Relationships and Education (CARE)

SUBJECT: Verification of Joint Audit Management Enterprise System (JAMES) Audit Summary Report

The Customer Assistance Relationships and Education (CARE) function has been assigned the responsibility of responding to specific corrective actions found in the attached JAMES Verification Report, 2004-30-XXX (200230XXX), "TRENDS IN CUSTOMER SERVICE TAXPAYER ASSISTANCE CENTERS SHOW PROCEDURAL & TRAINING CAUSES FOR INACCURATE ANSWERS TO TAX LAW QUESTIONS" , ISSUED NOVEMBER 22, 2003.

After careful review we, agree with the information pertaining to the findings, recommendations, corrective actions as identified in the attached report.

Potential Benefit Amounts: The following estimate(s) of potential benefit amounts in this audit are reasonable. Better Used Funds: $3,100,000 Questioned Costs: $0,000,000 Revenue Funds: $000,000,000

Concur: ____________________________ ______________________

Director, Customer Assistance Relationships and Education(CARE) Date:

If additional information is needed, please contact Carlo Peterson, JAMES Corrective Action Liaison, at 404-338-0000.

Attachment

Exhibit 1.55.6-5  (01-27-2009)
Status Update Cover Memorandum

Note:

The letter should be left justified and printed on W&I letterhead in accordance with IRM 1.10.1, Office of the Commissioner of Internal Revenue - The IRS Correspondence Manual

MEMORANDUM FOR CHIEF OFFICE OF INTERNAL CONTROLS

FROM: Sara D. Carver

Director Customer Account Services Wage and Investment Division

SUBJECT: Update to the Joint Audit Management Enterprise System (JAMES)

Attached and summarized below are JAMES updates for corrective action plans that fall within Wage and Investment Division’s Customer Account Services.

Report Number Corrective Action Status
2000-30-XXX 1-1-1 Completed
2001-30-XXX 4-2-2 Completed
2001-40-XXX 1-1-1 Completed
2002-30-XXX 1-2-2 Completed
2003-40-XXX 2-1-1 Completed
2003-30-XXX 1-3-1, 1-5-1 Delayed to 3-15-07
2003-30-XXX 1-6-1, 1-8-1 Completed
2003-40-XXX 1-1-1 Completed
GAO-03-XXX 1-14-1 Delayed to 1-15-07
GGD-99-XX 1-5-1 Superseded
GAO-03-XXXR 3-3-1 Completed

If you have questions or need additional information, please contact William Betterman, at 404-338-0000

Attachments (12)

Exhibit 1.55.6-6  (01-27-2009)
Request to Cancel a Corrective Action

Note:

The letter should be left justified and printed on W&I letterhead in accordance with IRM 1.10.1, Office of the Commissioner of Internal Revenue - The IRS Correspondence Manual

MEMORANDUM FOR TREASURY INSPECTOR GENERAL FOR TAX ADMINISTRATION

FROM: David E. Wright

Commissioner, Wage and Investment Division

SUBJECT: Request to Close Corrective Action 1-1-3 from Internal Audit Report #71399, "Quality of Information Document Processing"

I am writing to request your concurrence to close corrective action 1-1-3 from the subject Internal Audit report dated March 3, 1997. Your recommendation and our justification for closing these actions follow.

Recommendation #1: Service reports, such as Martinsburg Computing Center (MCC) Report 405-02-12, should be reviewed to determine whether large variances between process years exist in the volume and dollars of information documents. These analyses should be completed prior to the release of information to the states and other third parties and should include multiple year comparisons.

Corrective Action #1-1-3: IRS management is considering creating an automated process that highlights dollar and volume anomalies by comparing the current tax year report data with the prior year report data. Until we automate this task, management will continue to perform cursory reviews, or reviews on specific income types. Customer Service and Submission Processing will coordinate writing a manual and developing automated review process.

Background: The Auditors found that service control systems allowed problems with Service Center Recognition/Image Processing System (SCRIPS) data to go undetected. Because of the SCRIPS scanning problems, we posted incorrect information to the Information Returns Master File (IRMF). After we identified the processing errors, we took corrective actions to minimize the effects of the erroneous data on compliance programs and external users of the data. We later analyzed the July 1996 IRS report (Martinsburg Computing Center Report 405-02-12), which showed that SCRIPS scanning errors continue.

The finding was the result of SCRIPS Optical Character Recognition (OCR) "misreading" dollar amount fields, human errors, and filer errors. The SCRIPS was "looking" for dollar amounts so small (font size) that it would see a comma as the number 9 and periods as the number 0. The SCRIPS would also translate dollars signs, negative signs, and other non-numeric characters into numbers resulting in, large errors, sometimes in the trillions of dollars. The SCRIPS transcribers also made keypunch errors or approved erroneous dollar amounts by answering "OK" to visual verifications of dollar amounts. Filers errors and our use of "summary forms" that totaled all the dollar amounts reported in a submission, also contributed to SCRIPS errors. SCRIPS transcribers processed summary forms as just another Form 1099.

To address Recommendation 1, we submitted a Request for Information Services (RIS) to create a report that highlights dollar and volume anomalies by comparing the current tax year report data with the prior year report data. We have attempted to have Information Systems (IS) implement the RIS numerous times since the completion of the audit, the last time in May 2002, but IS has repeatedly rejected the RIS.

Justification to Close This Action:

The IRS has taken actions to refine the OCR processes, modify transcription instructions, and alert filers of summary documents. These actions have reduced erroneous SCRIPS so much that the report, which we planned to create through the RIS, would be of no material value. The corrective actions we are taking and have taken to reduce erroneous SCRIPS errors, and the cursory reviews IS conducted, are the same corrective actions required if the proposed comparison report showed dollar or volume anomalies.

For a detailed description of IRS’ actions to reduce erroneous SCRIPS erroneous, see the attached.

I hope this information justifies our conclusion that implementing this corrective action is not appropriate. If you agree that we should close this corrective action, please sign below. If you have any questions, please call Jack Sprout, Senior Analyst at 404-338-8999.

Attachment

Concurrence:__________________________________________________

Grace P. Jones, Inspector General Date

Exhibit 1.55.6-7  (01-27-2009)
Concurrence to Cancel a Corrective Action

Treasury Inspector General for Tax Administration

DEPARTMENT OF THE TREASURY

WASHINGTON, D.C. 20220

MEMORANDUM FOR COMMISSIONER, WAGE AND INVESTMENT DIVISION

FROM: Jane C. Doe

Inspector General

SUBJECT: Request to Cancel Corrective Action 1-1-3 from Audit Report #73455, Quality of Information Document Processing

You have requested the Treasury Inspector General for Tax Administration’s concurrence in canceling corrective action 1-1-3 relating to the subject report. As requested, I have indicated my concurrence by my signature on the attachment.

If you have any questions, please contact me, or your staff may contact Margaret E. Begg, Director, Office of Management and Policy at (202) 622-9999.

Attachment

cc: Office of Management Control

Attn: Bonnie Johnson


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