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OIG Recovery Act 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 to taxpayer forums, and discuss tax
OIG Broad Outreach Recovery Act Goals: adminsitration issues with the IRS Commisioner and his senior staff, the National Taxpayer Advocate, the IRS Oversight Board, and applicable
Congressional Committees,
Because of the unprecented nature of the Recovery Act, all IRS ARRA activities are deemed to be high risk. TIGTA will use the existing strategic
OIG Recovery Act Risk Assessment Process:
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
FY 2009 OIG Non-Recovery Act Funds: $146,083,000
Number of OIG Planned Recovery Act Hires: 9
OIG Recovery Act Funds to be Allocated to
N/A - none awarded
Contracts:
Purpose of Recovery Act Contracts: N/A - none awarded
Types of Recovery Act Contracts Awarded to
N/A - none awarded
Date:
Link to OIG FY 2009 Recovery Act Work Plan: http://www.treas.gov/tigta/recovery.shtml
Page 1 of Overview 2d90987a-04ea-4e41-bca2-6533c5f6100b.xls
OIG FY 2009 Recovery Act Work Plan
Expected Expected
Type of Review Entity Performing
Agency Recovery Act Quarter in Quarter in Expected
(Administrative / Review (OIG Staff,
Agency Program Area Funds Associated Project Title Background Objective Which which Final Number of
Financial, Eligibility, Contractor,
w/Program Area Work will Report will Reports
Performance, Other) Other)
Start be Issued
Determine if the IRS has correctly implemented
$123 Million (total
the new First-Time Home Buyer legislation into tax
Tax Provision received by IRS for Review of the 2009 Filing
IRS Performance OIG Staff return processing systems by assessing the Q3 FY 09 Q4 FY 09 1
Implementation implementation of Season
accuracy of returns processed with the new
tax provisions)
changes
For 2009 and 2010, the Recovery Act provides a Whether changes to withholding will have
refundable tax credit of up to $400 for working unintended negative effect on taxpayers; is the
individuals and $800 for working families. This tax IRS providing adequate outreach to employers
credit would be calculated at a rate of 6.2% of and taxpayers to ensure they know to adjust
$123 Million (total
earned income, and would phase out for withholding if the employees will exceed the
Tax Provision received by IRS for Review of the Making
IRS Performance OIG Staff taxpayers with adjusted gross income in excess of adjusted gross income limits or will otherwise be Q3 FY 09 Q2 FY 10 2
Implementation implementation of Work Pay Credit
$75,000 ($150,000 for married couples filing negatively affected; determine if provisions are
tax provisions)
jointly). Taxpayers can receive this benefit made for waiving estimated tax penalties if wage
through a reduction in the amount of income tax earners do not qualify for the credit but had
that is withheld from their paychecks, or through reduced withholding due to their employer's
claiming the credit on their tax returns. implementation of the new rates
In previous legislation, Congress provided
taxpayers with a refundable tax credit that was
equivalent to an interest-free loan equal to 10
percent of the purchase of a home (up to $7,500)
by first-time home buyers. The provision applies
Determine what steps the IRS is taking to ensure
to homes purchased on or after April 9, 2008 and
taxpayers taking the credit qualify, or to identify
before July 1, 2009. Taxpayers receiving this tax
those who did qualify for the credit but fail to stay
credit are currently required to repay any amount
in their homes for three years after purchase;
received under this provision back to the
determine how the IRS is handling the change in
government over 15 years in equal installments or
$123 Million (total the law to allow taxpayers purchasing homes in
if earlier when the home is sold. The credit
Tax Provision received by IRS for Eligibility and 2009 and claiming the $7,500 repayable loan to
IRS OIG Staff phases out for taxpayers with adjusted gross Q3 FY 09 Q2 FY 10 2
Implementation implementation of Performance amend their 2008 tax returns to claim the
income in excess of $75,000 ($150,000 in the case
tax provisions) refundable $8,000 credit, including whether the
of a joint return). The Recovery Act eliminates the
IRS will be able to process the influx of amended
repayment obligation for taxpayers that purchase
returns timely, what controls will be in place to
homes after January 1, 2009, increases the
identify questionable claims, and what
maximum value of the credit to $8,000, and
documentation the IRS will require to substantiate
removes the prohibition of financing by mortgage
the claims
revenue bonds, and extends the availability of the
credit for homes purchased after December 1,
Review of IRS Efforts to 2009. The Recovery Act retains the credit
Identify Improper Claims recapture if the house is sold within three years of
for the First-Time purchase.
Homebuyer Credit
Page 2 of Work Plan 2d90987a-04ea-4e41-bca2-6533c5f6100b.xls
OIG FY 2009 Recovery Act Work Plan
Under prior law, new operating losses may be
carried back to the two taxable years before the Determine whether the IRS timely processes small
year that the loss arises and carried forward to business net operating loss carryback claims filed
$123 Million (total
each of the succeeding twenty taxable years after by individual and business taxpayers and whether
Tax Provision received by IRS for
IRS Performance OIG Staff the year that the loss arises. For 2008, the controls are in place to ensure that taxpayers Q3 FY 09 Q4 FY 10 1
Implementation implementation of
Recovery Act extends the maximum carryback making this election qualify; determine if effective
tax provisions)
Review of Processing of period from two years to five years for small corrective action was taken to help ensure
Net Operating Loss businesses with gross receipts of $15 million or processing accuracy of the claim
Carrybacks less.
Determine if controls are in place for
administration and expansion of the Health
Coverage Tax Credit under the ARRA. Specifically,
we will evaluate the adequacy and completeness
Internal Revenue The Recovery Act provided $80 million to the of new requirements; the adequacy of the testing
Review of the Health
Service Health Internal Revenue Service to implement the health processes to ensure the system is available by
IRS $80 Million Performance OIG Staff Care Tax Credit System Q3 FY 09 Q2 FY 10 1
Care Tax Credit care tax credit. The funds are available through January 2010; whether HCTC performance is
Upgrade
Administration September 30, 2010. analyzed on a regular basis; whether the financial
database system has the capacity to handle
additional HCTC participants; and whether the IRS
has the appropriate oversight to properly
implement the project.
$123 Million (total Review of the IRS OMB implementing guidance required eight (8)
Determine whether the IRS met the timely
Tax Provision received by IRS for Administrative/ Implementation of OMB different levels of reporting necessary to meet
IRS OIG Staff reporting requirements specified in Section 2.1 of Q3 FY09 Q4 FY09 1
Implementation implementation of Financial Reviews Implementation accountability and transparency objectives of the
the Implementing Guidance.
tax provisions) Guidance Recovery Act and the implementing guidnace.
Type of Reviews
Administrative/Financial Reviews - reviews of management administrative issues, management internal controls, or financial systems/processes
Eligibility Reviews - reviews to determine if eligibility requiremetns were met for a given program
Performance Reviews - reviews to determine the effectiveness of a given program
Other Reviews - reviews that do not fit within the above categories
Page 3 of Work Plan 2d90987a-04ea-4e41-bca2-6533c5f6100b.xls
