Open Recommendations

The Human Capital Officer should work with the ITM administrator to add quarterly touchpoint activities to the manager’s ITM module as part of the new employee onboarding, send managers notifications of upcoming due dates for quarterly touchpoint activity discussions and alert managers if the discussions are past due.

The Commissioner, Internal Revenue Service, should evaluate available options to prioritize the scanning of historical documents to realize cost savings and comply with Office of Management and Budget and National Archives and Records Administration mandates to convert all paper documents to digital format by December 2030.

The Commissioner, Small Business/Self-Employed Division, should review all taxpayer accounts that had a hostage indicator, but were not identified on partner agency lists, to determine whether appropriate corrective actions and relief are necessary after the removal of the hostage indicator, e.g., ensure that refunds are issued, interest paid on held returns, etc.

The Commissioner, Small Business/Self-Employed Division, should establish a process to regularly review and closely monitor taxpayer accounts with a hostage indicator. The indicator should be placed or removed from accounts to ensure that IRS records reconcile with State Department and FBI listings of individuals held in captivity and seeking tax relief. The indicator should also be removed from tax accounts that are not identified on the partner agency’s listings.

The Commissioner, Small Business/Self-Employed Division, should develop internal procedures to reengage released taxpayers and ensure that, at a minimum, account transactions, penalties, refunds, and records are accurate and up to date.

The Commissioner, Small Business/Self-Employed Division, should restrict who can add or remove hostage indicators.

The Commissioner, Small Business/Self-Employed Division, should ensure that the programming for the hostage indicator is functioning as intended, and that unintended actions are not occurring on taxpayer accounts. In the interim, consider coordinating with the Identity Theft Victim Assistance Program when the IRS is notified of a new impacted taxpayer to provide appropriate protection, such as an IP PIN.

The Commissioner, Small Business/Self-Employed Division, should take the necessary steps to provide FTP penalty relief to the 2,138 eligible taxpayers we identified, including but not limited to abating FTP penalties.

The Chief Procurement Officer should revise the contract file checklists to include the following: a) a certification statement that the contracting officer added all applicable documents to the contract file; and b) managerial approval confirming the completeness of the contract file.

The Chief Procurement Officer should work with the Chief Financial Officer to develop a form that includes all the elements of the required quality assurance inspection report, provide training to the CORs on its use, and implement a requirement for consistent use.

The Director, Collection Policy, SB/SE Division, should update IRM 5.1.22, Field Collection Procedures-Disclosure, to accurately reflect the IRS disclosure guidance regarding I.R.C. § 6103(e)(8).

The Director, Examination, SB/SE Division, should remind Field Examination employees that a Form 8821 does not permit
the designee to act on behalf of the taxpayer.

The Director, Examination, SB/SE Division, should remind field examiners and group managers of the need to verify and document taxpayer representation before initiating contact and reinforce procedures for handling revocations or withdrawals of representation.

Complete POA&Ms and/or RBDs to document and track the **2** overdue configuration compliance vulnerabilities.

The Chief Information Officer should reconcile the platform asset inventory to the new inventory management system to ensure its completeness and accuracy.

The Chief Information Officer should ensure that all existing legacy case management systems, and any new projects incorporated into the ECM platform, comply with the April 2025 legacy definition.

The Director, Collection Policy, SB/SE Division, should revise the IRM to require revenue officers to verify that the CDP hearing
notice has been issued prior to taking levy action.

The Director, Collection Policy, SB/SE Division, should refund the proceeds from the prohibited levies to the 42 taxpayers that
we identified during this review.

The Director, Field Collection, SB/SE Division should ensure employees, and their managers review prohibited levy actions identified in this report, and in employee performance reviews, and take appropriate actions for misconduct if violations are found to be
intentional.

The Director, Field Collection, SB/SE Division, should notify the taxpayers identified in this report that their representatives were not sent a copy of CDP levy notices or other correspondence.

The Chief Information Officer should timely remediate GSS BDA vulnerabilities in accordance with IRS policies.

The Chief Information Officer should ensure that all configurations for GSS BDA assets adhere to federal and IRS policies.

The Chief Information Officer should ensure the asset discovery tool is properly configured to the source data to accurately account for all GSS BDA assets.

The Chief, Taxpayer Services, should educate IRS representatives about the fraud scheme and require them to properly authenticate callers before providing tax account information, including tax deposit and tax transcript information.

The Chief, Taxpayer Services, should perform a study to determine whether a new kiosk program that uses updated technology, or deploys laptops to TACs, would provide effective and efficient self-service options to taxpayers.