TIGTA Reviews IRS's Handling Of Economic Stimulus Payments

by Mike Godfrey, Tax-News.com, Washington

13 August 2008

The Treasury Inspector General for Tax Administration (TIGTA) on Monday publicly released its evaluation of the Internal Revenue Service's (IRS's) planning efforts for the issuance of economic stimulus payments.

The review is the first in a series of TIGTA audits designed to provide Congress with an ongoing status of the IRS's implementation of the more than USD100bn in stimulus payments to more than 130 million households. TIGTA evaluated the IRS's efforts to plan for the implementation of the stimulus payments and its actions through April 1, 2008.

Although the IRS’s planning for the stimulus payments was found to be generally sufficient, TIGTA noted that there were areas where improvements were needed.

"Some IRS functions had not developed sufficient Action Plans, and there was no consolidated review process in place to ensure that the information and guidance being shared internally and externally were consistent and accurate. These issues could have increased the risk of errors when stimulus-only returns were filed and processed and payments were issued," TIGTA said. However, the investigation found that IRS management addressed these concerns as TIGTA brought them to their attention.

Although the IRS had established an Executive Steering Committee to coordinate the planning for the stimulus payments, each IRS function was responsible for creating and disseminating information relative to its area of responsibility. TIGTA concluded that many of its concerns could have been prevented if information had been reviewed by a central point to ensure its consistency and completeness.

TIGTA also identified concerns with the IRS’ plans to address stimulus payments on fraudulent Tax Year 2007 returns on which a determination of fraud was made after the refunds were issued, and to identify potentially fraudulent stimulus-only returns. TIGTA is evaluating the Criminal Investigation Division’s efforts to address these concerns.

"Because Congress expected the stimulus payments to be in the hands of individuals as soon as possible, the IRS planned to execute the effort in tandem with the 2008 Filing Season," commented J. Russell George, Treasury Inspector General for Tax Administration.

"When TIGTA raised concerns about inconsistent and incomplete information released by the IRS, the agency initiated mitigating actions in a timely manner," he added.

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