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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
              Purpose of Recovery Act Contracts: N/A - none awarded
    Types of Recovery Act Contracts Awarded to
                                                 N/A - none awarded

     Link to OIG FY 2009 Recovery Act Work Plan:

Page 1 of Overview                                                                                                                                                        b4431ef9-4841-4813-a160-6aa1c6f59533.xls
                                                                                                        OIG FY 2009 Recovery Act Work Plan

                                                                                                                                                                                                                                           Expected    Expected
                                Agency Recovery          Type of Review        Entity Performing
                                                                                                                                                                                                                                           Quarter in Quarter in Expected
                                   Act Funds            (Administrative /        Review (OIG
    Agency      Program Area                                                                              Project Title                         Background                                              Objective                           Which     which Final Number of
                                  Associated           Financial, Eligibility, Staff, Contractor,
                                                                                                                                                                                                                                           Work will Report will   Reports
                                w/Program Area         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 Provision   received by IRS for                                                   Review of the 2009
      IRS                                                  Performance             OIG Staff                                                                                       tax return processing systems by assessing the          Q3 FY 09      Q4 FY 09             1
               Implementation   implementation of                                                        Filing Season
                                                                                                                                                                                   accuracy of returns processed with the new
                                   tax provisions)

                                                                                                                             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       IRS providing adequate outreach to employers
                                                                                                                             tax 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
                                 $123 Million (total                                                                                                                               the law to allow taxpayers purchasing homes in
                                                                                                                              or 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
                                   tax provisions)                                                                                                                                 refundable $8,000 credit, including whether the
                                                                                                                              case of a joint return). The Recovery Act
                                                                                                                                                                                   IRS will be able to process the influx of amended
                                                                                                                              eliminates the repayment obligation for taxpayers
                                                                                                                                                                                   returns timely, what controls will be in place to
                                                                                                                              that purchase homes after January 1, 2009,
                                                                                                                                                                                   identify questionable claims, and what
                                                                                                                              increases the maximum value of the credit to
                                                                                                                                                                                   documentation the IRS will require to
                                                                                                                              $8,000, and removes the prohibition of financing
                                                                                                                                                                                   substantiate the claims
                                                                                                                              by mortgage revenue bonds, and extends the
                                                                                                                              availability of the credit for homes purchased
                                                                                                    Review of IRS Efforts to after December 1, 2009. The Recovery Act retains
                                                                                                        Identify Improper     the credit recapture if the house is sold within
                                                                                                    Claims for the First-Time three years of purchase.
                                                                                                        Homebuyer Credit

Page 2 of Work Plan                                                                                                                                                                                                                               b4431ef9-4841-4813-a160-6aa1c6f59533.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
                                                                                                                        year that the loss arises and carried forward to    small business net operating loss carryback claims
                                   $123 Million (total
                                                                                                                        each of the succeeding twenty taxable years after   filed by individual and business taxpayers and
                Tax Provision     received by IRS for
      IRS                                                  Performance           OIG Staff                              the year that the loss arises. For 2008, the        whether controls are in place to ensure that         Q3 FY 09      Q4 FY 10             1
               Implementation     implementation of
                                                                                                                        Recovery Act extends the maximum carryback          taxpayers making this election qualify; determine
                                     tax provisions)
                                                                                                Review of Processing of period from two years to five years for small       if effective corrective action was taken to help
                                                                                                  Net Operating Loss    businesses with gross receipts of $15 million or    ensure 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
                 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                                                                                                                                                                                                                     b4431ef9-4841-4813-a160-6aa1c6f59533.xls

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