TIGTA FY 2010 Recovery Act Program Plan Overview
OIG Name: Treasury Inspector General for Tax Administration (TIGTA)
In its oversight role of the IRS Recovery Act programs and activities, TIGTA will monitor and evaluate the IRS, in much the same manner that it
currently oversees tax administration, in general. To accomplish its goals for Recovery Act involvement, TIGTA will aggressively:
• account for IRS monies expended and pursue those who defraud the IRS;
• protect the interests of the American taxpayers;
OIG Broad Recovery Act Goals:
• hold accountable Government officials who are responsible for administering Recovery Act funds;
• serve as a deterrent to those who are inclined to victimize Federal agencies; and
• provide for an overall atmosphere of transparency.
TIGTA will continue our integrity briefing to IRS employees and managers, conduct presentations at taxpayer forums, and discuss tax
OIG Broad Training and Outreach Recovery Act
administration issues with the IRS Commissioner and his senior staff, the National Taxpayer Advocate, the IRS Oversight Board, and applicable
Goals:
Congressional Committees; staff dedicated to Recovery Act oversight equal 9.84 FTEs.
Because of the unprecedented nature of the Recovery Act, all IRS ARRA activities are deemed to be high risk. TIGTA will use the existing
OIG Recovery Act Risk Assessment Process:
strategic planning process to identify the appropriate oversight actions needed for specific IRS tax provisions.
OIG Recovery Act Funds: $7 million
Expiration Date of OIG Recovery Act Funds: 2013
OIG Recovery Act Funds Allocated to Contracts: No
Purpose of Recovery Act Contracts: N/A - none awarded
Types of Recovery Act Contracts Awarded to Date: N/A - none awarded
Link to OIG Recovery Act Work Plan: http://www.treas.gov/tigta/recovery.shtml
Page 1 of Overview 6e9690ee-2fb7-4aa0-8912-269eee9bb9b9.xls
TIGTA FY 2010 Recovery Act Program Plan
Review Included
Recovery Act Entity Expected Quarter Expected
on Prior Expected Quarter
Agency Program Area Funds Associated Type of Review Performing Project Title Background Objective Final Report Number of
Recovery Act Work Begins
w/Program Area Review Issued Reports
Plan (Y/N)
Under prior law,
new operating
losses may be
carried back to
the two taxable
years before the
year that the loss Determine if the
arises and carried IRS properly
forward to each implemented the
of the succeeding new ARRA 5 year
$123 Million Review of
twenty taxable Net Operating
(total received by Processing of Net
Tax Law years after the Loss Carryback
IRS IRS for Performance OIG Staff Operating Loss Yes Q3 FY 09 Q4 FY 10 1
Implementation year that the loss provision, and to
implementation Carrybacks
arises. For 2008, follow-up on
of tax provisions) #200940136
the Recovery Act prior audit
extends the recommendation
maximum s related to
carryback period carrybacks.
from two years to
five years for
small businesses
with gross
receipts of $15
million or less.
Page 2 of Work Plan 6e9690ee-2fb7-4aa0-8912-269eee9bb9b9.xls
TIGTA FY 2010 Recovery Act Program Plan
Review Included
Recovery Act Entity Expected Quarter Expected
on Prior Expected Quarter
Agency Program Area Funds Associated Type of Review Performing Project Title Background Objective Final Report Number of
Recovery Act Work Begins
w/Program Area Review Issued Reports
Plan (Y/N)
For 2009 and
2010, the
Recovery Act
provides a
refundable tax
credit of up to
$400 for working
individuals and
$800 for working
families. This tax
credit would be Assess the IRS's
calculated at a efforts to
$123 Million
Review of the rate of 6.2% of implement the
(total received by
Tax Law Making Work Pay earned income, Making Work Pay
IRS IRS for Performance OIG Staff Yes Q3 FY 09 Q2 FY 10 2
Implementation Credit and would phase Credit and
implementation
#200940139 out for taxpayers evaluate its effect
of tax provisions)
with adjusted on taxpayers and
gross income in employers.
excess of $75,000
($150,000 for
married couples
filing jointly).
Taxpayers can
receive this
benefit through a
reduction in the
amount of
income tax that is
Page 3 of Work Plan 6e9690ee-2fb7-4aa0-8912-269eee9bb9b9.xls
TIGTA FY 2010 Recovery Act Program Plan
Review Included
Recovery Act Entity Expected Quarter Expected
on Prior Expected Quarter
Agency Program Area Funds Associated Type of Review Performing Project Title Background Objective Final Report Number of
Recovery Act Work Begins
w/Program Area Review Issued Reports
Plan (Y/N)
In previous Determine what
legislation, steps the IRS is
Congress taking to ensure
provided taxpayers taking
taxpayers with a the credit qualify,
refundable tax or to identify
credit that was those who did
equivalent to an qualify for the
interest-free loan credit but fail to
equal to 10 stay in their
Review of IRS percent of the homes for three
$123 Million Efforts to Identify purchase of a years after
(total received by Improper Claims home (up to purchase;
Tax Law
IRS IRS for Performance OIG Staff for the First-Time $7,500) by first- determine how Yes Q3 FY 09 Q2 FY 10 2
Implementation time home the IRS is
implementation Homebuyer
of tax provisions) Credit buyers. The handling the
#200940138 provision applies change in the law
to homes to allow
purchased on or taxpayers
after April 9, purchasing
2008 and before homes in 2009
July 1, 2009. and claiming the
Taxpayers $7,500 repayable
receiving this tax loan to amend
credit are their 2008 tax
currently returns to claim
required to repay the refundable
any amount
Each year, TIGTA $8,000 credit,
Determine if the
$123 Million
(total received by Review of the conducts reviews IRS has correctly
Tax Law and assesses IRS's implemented the
IRS IRS for Performance OIG Staff 2009 Filing Yes Q1 FY 09 Q4 FY 09 2
Implementation progress and new First-Time
implementation Season
of tax provisions) effectiveness of Home Buyer
processing tax legislation into
Page 4 of Work Plan 6e9690ee-2fb7-4aa0-8912-269eee9bb9b9.xls
TIGTA FY 2010 Recovery Act Program Plan
Review Included
Recovery Act Entity Expected Quarter Expected
on Prior Expected Quarter
Agency Program Area Funds Associated Type of Review Performing Project Title Background Objective Final Report Number of
Recovery Act Work Begins
w/Program Area Review Issued Reports
Plan (Y/N)
The Recovery Act
provided $80
million to the Determine if
Internal Revenue controls are in
Review of the
Internal Revenue Service to place for
Health Care Tax
Service Health Administrative/Fi implement the administration
IRS $80 Million OIG Staff Credit System Yes Q3 FY 09 Q2 FY 10 1
Care Tax Credit nancial health care tax and expansion of
Upgrade
Administration credit. The funds the Health
#200920130
are available Coverage Tax
through Credit.
September 30,
2010.
The IRS uses
various forms of
information from
multiple third
parties in carrying
Assess the IRS's
$123 Million out its tax
Efforts to Ensure ability to verify
(total received by administration
Tax Law Proper Use of the accuracy and
IRS IRS for Performance OIG Staff duties. The 50+ No Q3 FY09 Q1 FY10 1
Implementation Recovery Funds eligibility for tax
implementation ARRA tax related
#200940137 related benefits
of tax provisions) provisions add to
and credits.
the need for IRS
to effectively use
this information
in carrying out its
mission.
Page 5 of Work Plan 6e9690ee-2fb7-4aa0-8912-269eee9bb9b9.xls
TIGTA FY 2010 Recovery Act Program Plan
Review Included
Recovery Act Entity Expected Quarter Expected
on Prior Expected Quarter
Agency Program Area Funds Associated Type of Review Performing Project Title Background Objective Final Report Number of
Recovery Act Work Begins
w/Program Area Review Issued Reports
Plan (Y/N)
ARRA allows
taxpayers to
claim credits for
various energy
production and
Evaluate controls
low-income
including sharing
housing
of information
investments.
Low Income between the
$123 Million Under ARRA
Housing and Treasury
(total received by taxpayers may
Tax Law Administrative/Fi Energy Grants in Department,
IRS IRS for OIG Staff receive grants No Q4 FY09 Q3 FY11 1
Implementation nancial Lieu of Tax States, and the
implementation from the Federal
Credits IRS to ensure
of tax provisions) or State
#201040130 taxpayers do not
governments in
receive both
lieu of tax credits.
grants and
However,
credits.
taxpayers cannot
claim a credit and
receive a grant
for the same
investment.
Page 6 of Work Plan 6e9690ee-2fb7-4aa0-8912-269eee9bb9b9.xls
TIGTA FY 2010 Recovery Act Program Plan
Review Included
Recovery Act Entity Expected Quarter Expected
on Prior Expected Quarter
Agency Program Area Funds Associated Type of Review Performing Project Title Background Objective Final Report Number of
Recovery Act Work Begins
w/Program Area Review Issued Reports
Plan (Y/N)
ARRA requires IRS
to conduct a
survey of Health
Coverage Tax
Credit eligible
individuals and
report selected
demographic
information such
as income and Assess the
education levels, methodology
Survey and satisfaction with
$123 Million used to conduct
Report on the enrollment
(total received by the IRS's Health
Tax Law Enhanced Health process, and
IRS IRS for Performance OIG Staff Coverage Tax No Q3 FY10 Q2 FY11 1
Implementation Coverage Tax satisfaction with
implementation Credit study to
Credit Program the health
of tax provisions) ensure results are
#201040112 coverage options. accurately
The IRS is also reported.
required to
annually report
other information
including the
number of
eligible
individuals and
the number
receiving the
ARRA and the
credit increased
Evaluate the
the Federal
$123 Million Health Coverage efficiency and
Government's
(total received by Tax Credit effectiveness of
Tax Law portion of health
IRS IRS for Performance OIG Staff Payment the Health Care No Q4 FY09 Q3 FY10 1
Implementation coverage tax
implementation Processing Tax Credit
credit payments
of tax provisions) #201040106 payment
from 65 percent
processing.
to 80 percent and
also extended it
Page 7 of Work Plan 6e9690ee-2fb7-4aa0-8912-269eee9bb9b9.xls
TIGTA FY 2010 Recovery Act Program Plan
Review Included
Recovery Act Entity Expected Quarter Expected
on Prior Expected Quarter
Agency Program Area Funds Associated Type of Review Performing Project Title Background Objective Final Report Number of
Recovery Act Work Begins
w/Program Area Review Issued Reports
Plan (Y/N)
The IRS uses
various forms of
information from
multiple third
parties in carrying
out its tax Assess the IRS's
$123 Million Use of External administration efforts to use
(total received by Data to Validate duties. The third party
Tax Law
IRS IRS for Performance OIG Staff Earned Income increased Earned information to No Q3 FY10 Q2 FY11 1
Implementation
implementation Tax Credits Income Tax Credit validate Earned
of tax provisions) #201040111 under ARRA adds Income Tax Credit
to the need for Claims.
IRS to effectively
use this
information in
carrying out its
mission.
ARRA revised
existing
residential energy Assess the
credits by effectiveness of
$123 Million
extending the IRS's
(total received by Residential
Tax Law through 2010 the processes to
IRS IRS for Performance OIG Staff Energy Credits No Q4 FY10 Q2 FY11 1
Implementation time period for identify
implementation #201040109
improvements to erroneous
of tax provisions)
energy-efficient Residential
existing homes Energy Credits.
and increasing
the credit to 30
ARRA allows
taxpayers a new Assess the
Deductions state and local effectiveness of
$123 Million tax deduction on
Associated with the IRS's process
(total received by the purchase of
Tax Law the Purchase of to identify
IRS IRS for Performance OIG Staff qualifying No Q3 FY10 Q1 FY11 1
Implementation Qualified Motor erroneous
implementation vehicles. The
Vehicles Qualified Motor
of tax provisions) deduction is
#201040108 Vehicle
limited to the deductions.
sales and excise
taxes paid on up
Page 8 of Work Plan 6e9690ee-2fb7-4aa0-8912-269eee9bb9b9.xls
TIGTA FY 2010 Recovery Act Program Plan
Review Included
Recovery Act Entity Expected Quarter Expected
on Prior Expected Quarter
Agency Program Area Funds Associated Type of Review Performing Project Title Background Objective Final Report Number of
Recovery Act Work Begins
w/Program Area Review Issued Reports
Plan (Y/N)
Certain plug-in Determine
electric vehicles whether the IRS's
acquired after controls identify
$123 Million February 17, erroneous claims
Controls Over 2009 and before for the Plug-In
(total received by
Tax Law Plug-In Electric 2012 qualify for a Electric Vehicle
IRS IRS for Performance OIG Staff No Q2 FY10 Q1 FY11 1
Implementation Vehicle Credit new tax credit Credit and
implementation
#201040131 equal to 10 prevent
of tax provisions)
percent of the fraudulent claims
vehicle cost. The of the Credit; also
credit is limited assess whether
to $2500 and forms,
In previous
legislation,
Congress
provided
taxpayers with a
refundable tax
credit that was
equivalent to an Determine the
interest-free loan effectiveness of
equal to 10 the IRS's efforts
Process to percent of the to distinguish
$123 Million
Administer the purchase of a between filers
(total received by
Tax Law First Time home (up to claiming the
IRS IRS for Performance OIG Staff No Q4 FY09 Q2 FY10 1
Implementation Homebuyer $7,500) by first- credit for a
implementation
Credit time home purchase in 2008
of tax provisions)
#201040101 buyers. The versus those
provision applies claiming the
to homes credit for a
purchased on or purchase in 2009.
after April 9,
2008 and before
July 1, 2009.
Taxpayers
receiving this tax
credit are
currently
Page 9 of Work Plan 6e9690ee-2fb7-4aa0-8912-269eee9bb9b9.xls
TIGTA FY 2010 Recovery Act Program Plan
Review Included
Recovery Act Entity Expected Quarter Expected
on Prior Expected Quarter
Agency Program Area Funds Associated Type of Review Performing Project Title Background Objective Final Report Number of
Recovery Act Work Begins
w/Program Area Review Issued Reports
Plan (Y/N)
In previous
legislation,
Congress
provided
taxpayers with a
refundable tax
credit that was
equivalent to an
interest-free loan
equal to 10
Assess the IRS's
Process to Ensure percent of the
$123 Million efforts to ensure
Repayment of the purchase of a
(total received by accurate and
Tax Law First Time home (up to
IRS IRS for Performance OIG Staff timely repayment No Q3 FY10 Q1 FY11 1
Implementation Homebuyer $7,500) by first-
implementation of the First Time
Credit time home
of tax provisions) Homebuyers
#201040107 buyers. The
Credit.
provision applies
to homes
purchased on or
after April 9,
2008 and before
July 1, 2009.
Taxpayers
receiving this tax
credit are
currently
Each year, TIGTA
conducts reviews
Provide selected
$123 Million and assesses IRS's
information
(total received by 2010 Interim progress and
Tax Law relating to the
IRS IRS for Performance OIG Staff Filing Season effectiveness of No Q4 FY09 Q2 FY10 1
Implementation progress of the
implementation #201040105 processing tax
2010 Filing
of tax provisions) returns during
Season.
the individual
filing season.
Page 10 of Work Plan 6e9690ee-2fb7-4aa0-8912-269eee9bb9b9.xls
TIGTA FY 2010 Recovery Act Program Plan
Review Included
Recovery Act Entity Expected Quarter Expected
on Prior Expected Quarter
Agency Program Area Funds Associated Type of Review Performing Project Title Background Objective Final Report Number of
Recovery Act Work Begins
w/Program Area Review Issued Reports
Plan (Y/N)
Each year, TIGTA Evaluate whether
conducts reviews the IRS timely
$123 Million and assesses IRS's and accurately
2010 Filing
(total received by progress and processes
Tax Law Season
IRS IRS for Performance OIG Staff effectiveness of individual paper No Q4 FY09 Q4 FY10 1
Implementation Implementation
implementation processing tax and electronically
#201040102
of tax provisions) returns during filed tax returns
the individual during the 2010
filing season. Filing Season.
Determine the
Both ARRA and
IRS's level of
the implementing
readiness to
guidance from
$123 Million IRS' Readiness to implement the
the Office of
(total received by Procure Goods requirements for
Tax Law Management and
IRS IRS for Performance OIG Staff and Services planning, No Q3 FY09 Q2 FY10 1
Implementation Budget require
implementation under ARRA awarding, and
transparency in
of tax provisions) #200910124 reporting of
all contract
ARRA funded
actions funded by
procurement
ARRA.
actions.
Report
Both ARRA and
observations
the implementing
identified during
ARRA guidance from
$123 Million the Acquisitions
Observations on a the Office of
(total received by Risks Identified
Tax Law Decade of Management and
IRS IRS for Performance OIG Staff during a Decade No Q4 FY10 Q1 FY11 1
Implementation Procurement Budget require
implementation of IRS
Audit Coverage at transparency in
of tax provisions) Procurement
IRS #201010116 all contract
Audit Coverage
actions funded by
audit that relate
ARRA.
to ARRA.
Page 11 of Work Plan 6e9690ee-2fb7-4aa0-8912-269eee9bb9b9.xls
TIGTA FY 2010 Recovery Act Program Plan
Review Included
Recovery Act Entity Expected Quarter Expected
on Prior Expected Quarter
Agency Program Area Funds Associated Type of Review Performing Project Title Background Objective Final Report Number of
Recovery Act Work Begins
w/Program Area Review Issued Reports
Plan (Y/N)
Report
Both ARRA and observations
Observations the implementing identified during
about Contractor guidance from the Review of the
$123 Million
Officer's the Office of Effectiveness of
(total received by
Tax Law Technical Management and the IRS
IRS IRS for Performance OIG Staff No Q1 FY10 Q1 FY10 1
Implementation Representative Budget require Contracting
implementation
Effectiveness and transparency in Officer's
of tax provisions)
ARRA all contract Technical
#201010115 actions funded by Representatives
ARRA. audit that relate
to ARRA.
Both ARRA and Determine
the implementing whether the IRS's
Post-Award
guidance from ARRA funded
$123 Million Compliance of FY
the Office of procurement
(total received by 2009
Tax Law Management and actions were
IRS IRS for Performance OIG Staff Procurement No Q4 FY10 Q3 FY11 1
Implementation Budget require compliant with
implementation Actions with
transparency in the Recovery Act
of tax provisions) ARRA
all contract and all
#201010114
actions funded by implementing
ARRA. guidance.
Page 12 of Work Plan 6e9690ee-2fb7-4aa0-8912-269eee9bb9b9.xls
TIGTA FY 2010 Recovery Act Program Plan
Review Included
Recovery Act Entity Expected Quarter Expected
on Prior Expected Quarter
Agency Program Area Funds Associated Type of Review Performing Project Title Background Objective Final Report Number of
Recovery Act Work Begins
w/Program Area Review Issued Reports
Plan (Y/N)
TIGTA recently
reported that the
Tax Exempt
Bonds Office had
not developed or
implemented the
processes
necessary to
identify and
address Report
noncompliance observations
Observations with State
$123 Million identified during
about State volume cap limits
(total received by Review of Private
Tax Law Volume Cap for tax exempt
IRS IRS for Performance OIG Staff Activity Tax- No Q4 FY09 Q1 FY10 1
Implementation Compliance and private activity
implementation Exempt Volume
ARRA bonds. Without
of tax provisions) Cap Compliance
#200910135 these processes, that relate to
the Federal ARRA.
Government is at
risk of losing
future tax
revenue because
States could issue
tax-exempt
private activity
bonds in excess
of federally
mandated yearly
Page 13 of Work Plan 6e9690ee-2fb7-4aa0-8912-269eee9bb9b9.xls
TIGTA FY 2010 Recovery Act Program Plan
Review Included
Recovery Act Entity Expected Quarter Expected
on Prior Expected Quarter
Agency Program Area Funds Associated Type of Review Performing Project Title Background Objective Final Report Number of
Recovery Act Work Begins
w/Program Area Review Issued Reports
Plan (Y/N)
ARRA introduced
several new tax
exempt or tax Determine
credit bond whether the Tax
provisions which Exempt Bonds
require formal Office's published
Tax Exempt
$123 Million operating guidance is
Bonds Office's
(total received by guidance from complete,
Tax Law Readiness for
IRS IRS for Performance OIG Staff IRS. The majority accurate, and No Q4 FY09 Q2 FY10 1
Implementation ARRA Bonds
implementation of these new consistent to
(Guidance)
of tax provisions) bond provisions allow issuance of
#200910131
have volume cap tax-exempt and
limitations, tax credit bonds
allocation in accordance
requirements, with ARRA.
and carryforward
provisions.
Determine
The Build whether the Tax
America Bonds Exempt Bonds
introduced by Office has
Tax Exempt ARRA allow for a developed
$123 Million Bonds Office's Federal subsidy controls that will
(total received by Readiness for for interest timely and
Tax Law Administrative/Fi
IRS IRS for OIG Staff ARRA Bonds (Pre- payments. These accurately issue No Q4 FY09 Q4 FY10 1
Implementation nancial
implementation Payment interest Build America
of tax provisions) Compliance) payments may be Bonds interest
#200910136 disbursed to payments while
either the bond preventing
issuer or other erroneous
third parties. payments from
being disbursed.
Page 14 of Work Plan 6e9690ee-2fb7-4aa0-8912-269eee9bb9b9.xls
TIGTA FY 2010 Recovery Act Program Plan
Review Included
Recovery Act Entity Expected Quarter Expected
on Prior Expected Quarter
Agency Program Area Funds Associated Type of Review Performing Project Title Background Objective Final Report Number of
Recovery Act Work Begins
w/Program Area Review Issued Reports
Plan (Y/N)
ARRA also Assess the Tax
Tax Exempt
incorporated tax Exempt Bonds
Bonds Office's
credit bonds Office's progress
$123 Million Readiness for
which may in developing a
(total received by ARRA Bonds (Post-
Tax Law eventually workload
IRS IRS for Performance OIG Staff Issuance No Q3 FY10 Q1 FY11 1
Implementation replace selection process
implementation Compliance
traditional tax to identify ARRA
of tax provisions) Workload
exempt bonds. bonds with a
Selection)
Prior to ARRA, tax potential for
#201010111
credit bonds were noncompliance.
For 2009 and
2010, the bill
would provide
State and local
governments
with the option of
issuing a tax Determine
Program Controls credit bond
whether the IRS
to Effectively instead of a tax- has adequately
Process Build exempt
$123 Million planned for the
America Bonds, governmental
(total received by processing of the
Tax Law Recovery Zone obligation bond.
IRS IRS for Performance OIG Staff three ARRA No Q3 FY10 Q2 FY11 1
Implementation Bonds, and Because the
implementation bonds for the
Qualified Energy market for tax
of tax provisions) bond holders to
Conservation credits is ensure they
Bonds currently small provide accurate
#201030133 given current reporting.
economic
conditions, the
bill would allow
the State or local
government to
elect to receive a
direct payment
Page 15 of Work Plan 6e9690ee-2fb7-4aa0-8912-269eee9bb9b9.xls
TIGTA FY 2010 Recovery Act Program Plan
Review Included
Recovery Act Entity Expected Quarter Expected
on Prior Expected Quarter
Agency Program Area Funds Associated Type of Review Performing Project Title Background Objective Final Report Number of
Recovery Act Work Begins
w/Program Area Review Issued Reports
Plan (Y/N)
The Recovery Act
provided $80
Determine if the
million to the
IRS is properly
Internal Revenue
Health Coverage accounting for
Internal Revenue Service to
Tax Credit System ARRA funds as
Service Health Administrative/Fi implement the
IRS $80 Million OIG Staff Upgrades for part of system No Q3 FY10 Q2 FY11 1
Care Tax Credit nancial health care tax
Fiscal Year 2010 upgrades to the
Administration credit. The funds
#201020101 Health Coverage
are available
Tax Credit
through
system.
September 30,
2010.
The Office of Determine if the
Management and IRS has properly
Budget (OMB) complied with
issued Guidance mandatory
Internal Revenue
Administrative/Fi ARRA OMB for the American requirements
IRS ARRA $80 Million OIG Staff No Q4 FY09 Q3 FY10 3
nancial Guidelines Recovery and identified by
Administration
Reinvestment Act OMB for ARRA
of 2009. The public reporting
purpose of this requirements,
guidance is to specifically
Page 16 of Work Plan 6e9690ee-2fb7-4aa0-8912-269eee9bb9b9.xls