Open Recommendations

The Commissioner, LB&I Division, should assess the compliance risk of **********2**********, and the viability of using Form 1099 data to identify Form 8938 nonfilers to improve the compliance efforts of Campaign 896.

The IRS Chief Human Capital Officer should establish debt for the 399 employees that did not comply with the terms
of their service agreement.

The IRS Chief Human Capital Officer should develop procedures to ensure that SLRP personnel promptly identify employees that do not comply with the terms of their service agreement and establish debts as necessary.

The IRS Chief Human Capital Officer should develop procedures to obtain an updated loan balance if there is a delay in payment beyond 45 days from the date of application.

The IRS Chief Human Capital Officer should develop procedures to obtain separation reports on a recurring basis to identify employees that have separated and ensure that debt is established timely.

The Chief Human Capital Officer should review the nine employees that had a period of non-pay status and extend their service agreements as needed.

The Chief IRS Human Capital Officer should coordinate with Treasury to determine the expectations for the quarterly monitoring of telework use.

The Chief IRS Human Capital Officer should finalize the processes and procedures for the quarterly monitoring of telework use.

The Chief, Taxpayer Services, should regularly provide training to tax examiners covering credit eligibility requirements and appropriate account actions to take for ITIN holders based on the applicable tax year.

The Chief, Taxpayer Services, should review the 1,769 tax returns where the IRS allowed credits for ITIN holders
who were potentially ineligible and make associated corrections, as necessary.

The Chief, Taxpayer Services, should update PATH Act implementation guidance in Notice 2016-48 to define the issuance date of an ITIN as either the original issuance date or the renewed issuance date, if applicable, for those ITINs that have expired.

The Chief, Taxpayer Services, should update the ITIN Policy Section guidelines to require on-site reviews of high-risk CAAs to be completed periodically to ensure adequate oversight.

The Chief, Taxpayer Services, should establish a process for the ITIN Unit to regularly share its observations of potentially questionable CAA activities or patterns with the ITIN Policy Section.

The Chief, Taxpayer Services, should establish a process for the ITIN Policy Section to review and consider the ITIN Unit’s potentially questionable CAA referrals when selecting CAAs for compliance reviews and processing applications.

In January 2025, we alerted the Chief, Direct File, to our concern that taxpayers were allowed to submit incorrect tax returns through Direct File. We recommended that Direct File immediately implement programming to ensure that it did not submit tax returns with errors that it could alert the taxpayer to fix, based upon information readily available.

The Commissioner, LB&I Division, should ensure that future initiatives involving complex tax returns do not duplicate steps in the compliance risk analysis process and consider the statute of limitations to allow examiners sufficient time to review and take appropriate compliance actions.

The Commissioner, LB&I Division, should develop procedures to ensure that all large partnership returns filed throughout the year are considered for risk assessment by the LPC Program.

The Chief, Taxpayer Services, should ensure that the programming change to accurately update the secondary taxpayer’s account with the date of death annotated on a tax return is implemented in January 2026 and is functioning as intended.

The Chief, Taxpayer Services, should ensure that the requested programming to change how the date of death and corrections are posted to the taxpayer’s account is implemented in January 2027 and is functioning as intended.

The Chief, Taxpayer Services, should verify that the approximately 55,000 taxpayer accounts from the unprocessed January 2023 SSA file are locked.

The Commissioner, Taxpayer Services Division, should ensure that appropriate steps are taken to recover the erroneous RRC payments, including issuing Letter 510C.

The Human Capital Officer should coordinate with IT to determine the time frame when managers must request laptops for new employees. Once determined, formalize the requirement in the standard new employee orientation guidance and update the Manager’s Onboarding Checklist.

The Human Capital Officer should update the Manager’s Onboarding Checklist with a step to issue the performance plan within 30 calendar days of the employee’s start date.

The Human Capital Officer should work with the ITM administrator to ensure that processes are put in place to alert managers when important due dates pass; for example, if the performance plan is past due.

The Human Capital Officer should establish a formal written policy that requires managers to conduct quarterly touchpoint discussions with new employees in their first year and require that managers attend the updated training on conducting quarterly touchpoint activities.