In its latest semiannual report to Congress, the Treasury Inspector General for Tax Administration pledged to devote funding received from the Inflation Reduction Act (PL 117-169) to continue to oversee how the IRS spends the $80 billion granted by the same bill.
The report, which covers the tax watchdog’s activities from the period April 1-September 30, 2023, began with a message from Acting Inspector General Heather Hill. “With IRA funding lasting for eight more years, TIGTA’s work and reporting will be ongoing,” wrote Hill. “We will use the $403 million in supplemental IRA funding that we received to continue our enhanced oversight of the IRS’s taxpayer services, enforcement, operations support, business systems modernization, and reporting requirements.”
She added TIGTA will “remain vigilant” as it monitors the agency’s upcoming projects.
Of the 47 reports issued during the period, several pertained to the 2023 filing season, the first tax season where the IRS put its early investments using Inflation Reduction Act funding into action. Its performance was measured against recent years during the COVID-19 pandemic, which caused operational disruptions at the agency and, consequently, backlogs of unprocessed tax returns and taxpayer communications.
“IRS management stated that for the first time since the pandemic began, individual tax return processing and related activities are returning to normal timeliness goals,” read the report in recapping TIGTA’s interim assessment of 2023 tax filing season results. “The IRS cleared the carryover inventory of unprocessed individual tax returns received during CY 2022 by February 4, 2023. However, the IRS continues to have backlogs in other inventory categories.”
A follow-up report found that although average customer call wait times were reduced to three minutes, staffed Taxpayer Assistance Centers were not fully staffed. Further, efforts to implement paper-return scanning were off to a slow start by the end of April but ramped up over summer. Other reports focused on training of new revenue agents hired to increase enforcement activities against individuals and businesses making over $400,000 per year and efficacies of qualified plug-in electric drive motor vehicle credit claim audits.
TIGTA took credit for the “recovery, protection, and identification of monetary benefits” of a total $6.8 billion during the reporting period.
“Our investigative highlights include several cases that involve persons sentenced for schemes to defraud the IRS, commit identity theft, and impersonate an IRS representative,” according to Hill. “In one such scheme, in the District of Arizona, a woman was arrested for conspiracy to defraud, theft of public money, and conspiracy to commit money laundering, transferring more than $2.5 million in fraudulent 2019 tax refunds to obtain Bitcoin.”
Over 1,050 investigations were opened and closed, including 582 criminal referrals and 188 indictments. There were no instances of IRS interference, whistleblower retaliation, nor any investigations involving IRS senior government employees.
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