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Report File
Date Issued
Submitting OIG
Treasury Inspector General for Tax Administration
Agencies Reviewed/Investigated
Internal Revenue Service
Report Number
2025-400-002
Report Type
Audit
Agency Wide
Yes
Number of Recommendations
11
Questioned Costs
$0
Funds for Better Use
$23,157,344
Report updated under NDAA 5274
No

Open Recommendations

This report has 7 open recommendations.
Recommendation Number Significant Recommendation Recommended Questioned Costs Recommended Funds for Better Use Additional Details
1 No $0 $23,157,344

The Chief, Taxpayer Services, and Chief, Tax Compliance Officer, should update internal guidance and develop more robust training to ensure that employees perform adequate research of tax accounts to identify outstanding tax debt prior to initiating manual refunds or credit elects.

2 No $0 $0

The Chief, Taxpayer Services, and Chief, Tax Compliance Officer, should request the necessary programming changes to ensure that the duplicate return freeze and the telephone excise tax freeze code function appropriately. In addition, request programming changes to ensure that overpayments from undelivered refunds and interest offset appropriately.

3 No $0 $0

The Chief, Taxpayer Services, and Chief, Tax Compliance Officer, should identify the functional areas allowing refunds or credit elects for taxpayers with existing tax debt, and issue alerts/reminders to them, advising that refunds or credit elects should not be allowed until any associated tax debt is satisfied.

4 No $0 $0

The Chief, Taxpayer Services, and Chief, Tax Compliance Officer, should verify that the programming changes associated with overpayments offsetting to tax debt on Form 720, the offset overflow freeze, and to payments associated with the Notice of Federal Tax Lien or Levy, are operating correctly.

5 No $0 $0

The Chief, Taxpayer Services, and Chief, Tax Compliance Officer, should analyze the 8,452 individual and 31,967 business cases that we identified and determine whether additional programming or procedural errors exist in the process of offsetting refunds and credit elects. Take appropriate corrective action to prevent erroneous refunds and credit elects in the future.

6 No $0 $0

The Chief Information Officer should ensure that the requested programming changes are implemented by January 2026.

11 No $0 $0

The Chief, Taxpayer Services, and Chief, Tax Compliance Officer, should remove the erroneous LLC indicator from the 76 sole proprietorship accounts.

Treasury Inspector General for Tax Administration

United States