Audit Report

OIG-20-034

FINANCIAL MANAGEMENT

Audit of Treasury's Compliance With the 

IPERA Requirements for Fiscal Year 2019

May 15, 2020

Office of Inspector General

Department of the Treasury
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Contents

Audit Report

Results in Brief ...................................................................................................2

Background........................................................................................................4

Treasury OIG Audit Results ..................................................................................8

Finding 1 Treasury Was Not in Compliance with IPERA for Fiscal Year 2019 .....10

Treasury Inspector General for Tax Administration Audit Results ............................12

Finding 1 Assessment of Fiscal Year 2019 Compliance with Improper Payment 

Reporting Requirements ................................................................12

Finding 2 Authorities Provided by the Internal Revenue Code Are Not Effectively 

Used to Address Erroneous Refundable Credits ................................14

Finding 3 Increased Correctable Error Authority Could Reduce the Number of 

Potentially Erroneous Refundable Credit Payments............................14

Finding 4 Revising the Nonwork Social Security Number Case Selection Could 

Increase Revenue Protected...........................................................15

Appendices

Appendix 1: Treasury OIG Objective, Scope, and Methodology ..............................17

Appendix 2: TIGTA’s Assessment of IRS Compliance With the Improper Payment 

Reporting Requirements in Fiscal Year 2019 and IRS Management 

Response.......................................................................................20

Appendix 3: Treasury Programs’ Compliance With IPERA Criteria ...........................46

Appendix 4: Treasury Management Response ......................................................51

Appendix 5: Treasury OIG Major Contributors to This Report .................................52

Appendix 6: Report Distribution..........................................................................53
Audit of Treasury's Compliance With the IPERA Requirements for

Fiscal Year 2019 (OIG-20-034) ii

Abbreviations

ACTC Additional Child Tax Credit

AFR Agency Financial Report

AOTC American Opportunity Tax Credit

APTC Advanced Premium Tax Credit

EITC Earned Income Tax Credit

EO Executive Order

HHS Department of Health and Human Services

IPERA Improper Payments Elimination and Recovery Act of 2010

IPERIA Improper Payments Elimination and Recovery Improvement

 Act of 2012

IPIA Improper Payments Information Act of 2002

IRS Internal Revenue Service

OIG Office of Inspector General

OMB Office of Management and Budget

PATH Protecting Americans From Tax Hikes Act of 2015

PTC Premium Tax Credit

RCG Risk and Control Group

RTC Refundable Tax Credit

SSN Social Security Number 

TIGTA Treasury Inspector General for Tax Administration

Treasury Department of the Treasury
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Audit of Treasury's Compliance With the IPERA Requirements for 

Fiscal Year 2019 (OIG-20-034) 1

Audit

Report

May 15, 2020

David F. Eisner

Assistant Secretary for Management

This report presents the results of our audit of the Department of 

the Treasury’s (Treasury) compliance with improper payment 

reporting requirements for fiscal year 2019.

The objective of our audit was to assess and report on Treasury’s 

overall compliance with requirements contained in the Improper 

Payments Elimination and Recovery Act of 2010 (IPERA)1, enacted 

to help federal agencies strengthen the framework for reducing and 

reporting improper payments. As part of our audit, we also 

assessed Treasury’s compliance with additional improper payment 

reporting requirements set forth in Executive Order (EO) 13520, 

Reducing Improper Payments and Eliminating Waste in Federal 

Programs, and the Improper Payments Elimination and Recovery 

Improvement Act of 2012 (IPERIA)2. We conducted our fieldwork 

from February 2020 through May 2020 in Washington, DC. 

Appendix 1 contains a more detailed description of our objective, 

scope, and methodology.

This report also summarizes the results of the Treasury Inspector 

General for Tax Administration’s (TIGTA) assessment of the 

Internal Revenue Service’s (IRS) compliance with improper payment 

reporting requirements in fiscal year 2019. This summarization 

includes IRS’s management response to TIGTA’s audit findings. 

TIGTA issued its report on April 30, 2020, which is included in its 

entirety as appendix 2 of this report.

 

1 Pub. L. No. 111-204, 124 Stat. (July 22, 2010) 2 Pub. L. No. 112-248, 126 Stat. (January 10, 2013)
Audit of Treasury's Compliance With the IPERA Requirements for

Fiscal Year 2019 (OIG-20-034) 2

Results in Brief

Treasury met many IPERA requirements, but was not in compliance 

for fiscal year 2019 because IRS did not report an improper 

payment rate of less than 10 percent for its programs identified as 

susceptible to significant improper payments as follows:

• Earned Income Tax Credit (EITC) – IRS estimates 25.3 percent 

($17.4 billion) of the total EITC payments of $68.7 billion in 

fiscal year 2019 were improper.

• Additional Child Tax Credit (ACTC) – IRS estimates 15.2 

percent ($7.2 billion) of the total ACTC payments of $47.7 

billion in fiscal year 2019 were improper.

• American Opportunity Tax Credit (AOTC) – IRS estimates 26.0 

percent ($2.1 billion) of the total AOTC payments of $7.9 billion 

in fiscal year 2019 were improper.

For fiscal year 2019, IRS correctly rated the ACTC and the AOTC 

as being susceptible to significant improper payments similar to the 

EITC. This is the 9th consecutive year that we have determined that 

Treasury is noncompliant with IPERA for not reporting a gross 

improper payment rate of less than 10 percent for one or more of 

its reported programs. We determined that Treasury was in 

compliance with all other IPERA, EO 13520, and IPERIA improper 

payment reporting requirements.

We also reviewed Treasury’s risk assessment process and 

recapture audit programs to determine the accuracy and 

completeness of Treasury improper payments reporting and found 

no matters of concern. In addition, we determined that Treasury 

complied with the requirement to publish its Agency Financial 

Report (AFR) and any accompanying material required by the Office 

of Management and Budget (OMB) on its website for fiscal year 

2019.

As part of our reporting process, we provided a draft of this report 

to Treasury management for review and comment. In a written 

response, management noted that it has long believed that 

refundable tax credits (RTC) are not payments of the type the 

improper payments legislation was designed to address, as the tax 

system is a collection system rather than a payment system. 
Audit of Treasury's Compliance With the IPERA Requirements for

Fiscal Year 2019 (OIG-20-034) 3

Management also noted that it will continue to collaborate with the 

IRS and OMB to identify a more effective process for reporting on 

the RTC programs in the Department’s AFR as part of a broader 

discussion on tax gap and tax burden.

Management’s response to our report is provided in appendix 4.

We also summarized TIGTA’s audit results in this report. TIGTA 

reported that IRS performed Quantitative Risk Assessments on the 

ACTC and the AOTC, resulting in its reporting of these programs 

as high risk. Similar to the EITC, IRS did not report an improper

payment rate of less than 10 percent for either the ACTC or the 

AOTC. Additionally, IRS correctly rated the Net Premium Tax Credit 

(PTC) as susceptible to significant improper payments, however, 

IRS did not report the Net PTC improper payments estimates in the 

AFR and will begin reporting in fiscal year 2020, as required by 

OMB. IRS estimates that 27.4 percent ($540.9 million) of the total 

Net PTC payments in fiscal year 2019 were improper. TIGTA 

recommended that IRS work with the Department of Health and 

Human Services (HHS) to develop a comprehensive risk 

assessment of improper PTC payments, which includes the risk of 

the Advanced Premium Tax Credit (APTC) improper payments.

In addition, TIGTA identified that IRS does not use tools provided 

by Congress to the extent possible to address erroneous credit 

payments. The ineffective use of various authorities provided in the 

Internal Revenue Code is a contributing factor in the high rate of 

improper payments.

The Protecting Americans From Tax Hikes (PATH) Act of 20153

gave IRS more time to verify the EITC or the ACTC claims before 

refunds are issued. However, TIGTA noted that it did not expand 

IRS’s authority to systemically correct erroneous claims that are 

identified at the time returns are processed. IRS has repeatedly 

requested additional authority that would allow it to correct tax 

returns during processing.

Furthermore, TIGTA noted that revising the nonwork Social 

Security Number (SSN) case selection methodology could increase 

revenue protected. TIGTA’s review of Processing Year 2019 tax 

returns identified that IRS could have increased the amount of 

 

3 Pub. L. No. 114-113, 129 Stat. 2242 (2015).
Audit of Treasury's Compliance With the IPERA Requirements for

Fiscal Year 2019 (OIG-20-034) 4

revenue it is protecting by approximately $3.1 million if it included 

the ACTC in its selection criteria and prioritized its case selection. 

TIGTA recommended that IRS should continue to refine its 

selection criteria to ensure that the tax returns with the greatest 

potential are selected and worked, and implement a process to 

systemically identify and evaluate tax returns filed by individuals 

with nonwork dependent SSNs to prevent erroneous refunds of the 

ACTC.

TIGTA’s report and IRS’s management response are provided in 

appendix 2.

Background

Improper Payments Compliance and Reporting 

Requirements

Under the Improper Payments Information Act of 2002 (IPIA),4

Federal agencies were required to review and identify programs and 

activities susceptible to improper payments on an annual basis and 

report estimates of improper payments to Congress along with 

actions to reduce estimated improper payments that exceeded 

$10 million.

In 2009, EO 13520 required Federal agencies to intensify their 

efforts to eliminate payment error, waste, fraud, and abuse in 

major Federal programs while continuing to ensure that these 

programs serve and provide access to their intended beneficiaries. 

It increased Federal agencies’ accountability and required that 

Federal agencies provide their agency Inspector General with 

detailed information on efforts to identify and reduce the number of 

improper payments in Federal programs with the highest dollar 

value of improper payments

Following EO 13520, on July 22, 2010, the President signed 

IPERA into law. IPERA amended IPIA, strengthening agencies’ 

program reviews and reporting requirements. IPERA expanded the 

types of payments to be reviewed and established the requirement 

for agencies to conduct recovery audits if cost-effective. IPERA 

 

4 Pub. L. No. 107-300, 116 Stat. (November 26, 2002)
Audit of Treasury's Compliance With the IPERA Requirements for

Fiscal Year 2019 (OIG-20-034) 5

also required Inspectors General to report on their respective 

agencies’ compliance with IPERA each fiscal year.

IPERIA further expanded agency improper payment requirements to 

foster greater agency accountability. IPERIA requires the Director of

OMB to identify a list of high priority Federal programs for greater 

levels of oversight and review. For those high priority programs, 

IPERIA requires OMB to coordinate with agencies to establish 

annual targets and semiannual or quarterly actions for reducing 

improper payments. Agencies are required to submit an annual 

report to the Inspector General on actions (1) taken or planned to 

recover improper payments and (2) intended to prevent future 

improper payments. The report is also required to be available to 

the public on a central website.

For fiscal year 2019, EITC was Treasury’s only OMB-identified high 

priority program. However, based on IRS’s fiscal year 2019 

improper payment estimates, the ACTC and AOTC were newly 

identified as high priority programs for fiscal year 2020 reporting.

In accordance with IPERIA and EO 13520, Offices of Inspector 

General (OIG) are required to review and report on their respective 

agencies’ OMB-designated high priority programs, if any. 

Specifically, OIGs are to review management’s assessment of the 

level of risk, the quality of the improper payment estimates and 

methodology, and the oversight and financial controls in place to 

identify and prevent improper payments. Recommendations, if any, 

are to be provided for modifying agency plans related to its high 

priority programs to include improvements for determining and 

estimating improper payments.

In Memorandum 15-02 dated October 20, 2014, OMB issued 

revisions to OMB Circular No. A-123, Appendix C, to provide 

agencies guidance on implementing all improper payment 

compliance and reporting requirements. In June 2018, OMB further 

revised the OMB guidance (OMB M-18-20) in an effort to transform 

the improper payment compliance framework to create a more 

unified, comprehensive, and less burdensome set of requirements. 

According to OMB M-18-20, all agencies should institute a 

systematic method of reviewing all programs once every three 

years to determine the programs’ improper payment risk. 

Additionally, agencies are required to take into account the 
Audit of Treasury's Compliance With the IPERA Requirements for

Fiscal Year 2019 (OIG-20-034) 6

following seven risk factors that are likely to contribute to a 

susceptibility of significant improper payments:

• whether the program or activity reviewed is new to the agency;

• the complexity of the program or activity reviewed, particularly 

with respect to determining correct payment amounts;

• the volume of payments made annually;

• whether payment eligibility decisions are made outside of the 

agency;

• recent major changes in program funding, authorities, practices, 

or procedures;

• the level, experience, and quality of training for personnel 

responsible for making program eligibility determination or 

certifying that payments are accurate; and

• significant deficiencies in the audit reports of the agency or 

other relevant management findings that might hinder accurate 

payment certification.

Treasury’s Improper Payment Risk Assessment

Treasury issued Fiscal Year 2019 Treasury Implementation Guide 

for OMB Circular A-123 Appendix C: Requirements for Payment 

Integrity Improvement (Treasury’s IPERA Guidance) to all 

components. Treasury also provided all components two tools—the 

Qualitative Risk Assessment Questionnaire and Quantitative Risk 

Assessment Summary—to assess the level of risk for each 

payment type, such as federal employee payments including 

payroll, aid or relief programs, entitlements or benefits, contract 

payments, claims and/or vouchers, loan guarantees, grants, and 

program recipient. The Qualitative Risk Assessment Questionnaire, 

which consists of twenty-five questions, must be applied to each 

payment type within each Fund Group5 with total non-federal 

disbursements of less than $5 billion. Using component responses, 

the Qualitative Risk Assessment Questionnaire computes a risk 

rating for each payment type which determines the overall risk 

assessment rating of susceptible or not susceptible to improper 

payments. Those Fund Groups with total non-federal 

 

5 A Fund Group is a set of activities recognized as a program within the component.
Audit of Treasury's Compliance With the IPERA Requirements for

Fiscal Year 2019 (OIG-20-034) 7

disbursements greater than $5 billion are required to perform a 

quantitative risk assessment. The quantitative risk assessment 

consists of a review of a sample of disbursements to calculate the 

improper payment amount and rate. The improper payment amount 

and rate are compared to OMB’s threshold to determine 

susceptibility to significant improper payments.

After each component completes and reviews its risk assessment, 

the results are provided to the Risk and Control Group (RCG). 

Components of those Fund Groups identified as susceptible to 

significant improper payments or high-priority programs are 

required to summarize their internal control over the improper 

payment processes using a narrative describing the internal 

controls instituted and/or strengthened to prevent further improper 

payments. For any program identified as susceptible to significant

improper payments, the responsible component is also required to 

provide the following information for inclusion in Treasury’s AFR:

• estimates of improper payments,

• root causes of improper payments,

• corrective action plan to reduce improper payments,

• a summary of internal controls over the improper payment 

process, and

• improper payments reduction outlook.

For fiscal year 2019, Treasury identified EITC, ACTC, AOTC, and 

PTC as susceptible programs. 

Payment Recapture Audits

IPERA requires agencies to conduct recovery audits (also referred 

to as payment recapture audits) to prevent, detect, and recover 

overpayments, if conducting such audits would be cost-effective, 

for each program and activity that expends $1 million or more 

annually. A payment recapture audit is a review and analysis of an 

agency’s or program’s accounting and financial records, and other 

pertinent information supporting its payments that is specifically 

designed to identify overpayments. 

Treasury’s IPERA Guidance requires each component to complete, 

certify, and submit a worksheet providing a consistent reporting
Audit of Treasury's Compliance With the IPERA Requirements for

Fiscal Year 2019 (OIG-20-034) 8

format that includes information on the results of the component’s 

payment recapture audits and treatment of recaptured improper 

payments. The worksheets are submitted to RCG for review and 

the data are consolidated and reported in the AFR.

Treasury’s Improper Payment Reporting

On November 15, 2019, Treasury published its fiscal year 2019 

AFR and subsequently posted it to its website. Included in that 

report was the required improper payments information with the 

following accompanying information:

• risk assessment and results;

• improper payment estimates for the EITC, ACTC, and AOTC 

programs;

• statistical sampling methodology used to arrive at the estimated 

improper payments for fiscal year 2019;

• summary discussing the root causes for the EITC, ACTC and 

AOTC overclaims;

• IRS’s strategy of identifying and reducing Refundable Tax 

Credits (RTC) overclaims in fiscal year 2019;

• description of the corrective action plans for the EITC program 

and projected result for fiscal year 2020;

• description of barriers, which limit IRS’s corrective actions in 

reducing improper payments in the RTC programs; 

• discussion of annual payment recapture audit efforts; and

• results of Treasury’s Do Not Pay Initiative6 operation.

Treasury OIG Audit Results

According to OMB Circular A-123, an agency is required to meet 

six specific requirements to be compliant with IPERA. The six 

requirements are (1) publishing an AFR; (2) conducting a risk 

 

6 IPERIA requires agencies to ensure that a thorough review of available databases occurs prior to the 

release of Federal funds to help verify eligibility and prevent certain improper payments. The Do Not 

Pay Initiative provides resources for agencies to review payment or award eligibility for purposes of 

identifying and preventing improper payments.
Audit of Treasury's Compliance With the IPERA Requirements for

Fiscal Year 2019 (OIG-20-034) 9

assessment; (3) publishing an improper payment estimate; (4) 

publishing corrective action plans; (5) publishing and meeting 

reduction targets; and (6) reporting a gross improper payment rate 

of less than 10 percent. We found that Treasury did not comply 

with IPERA for fiscal year 2019 because the IRS did not report an

overall improper payment rate of less than 10 percent for the EITC, 

ACTC, and AOTC programs. We discuss this further in our 

Finding 1 below. Treasury did comply with the other IPERA 

requirements as outlined in Table 1. In addition, appendix 3 

provides a summary of Treasury programs’ compliance with IPERA 

reporting criteria. 

Table 1. Treasury’s Compliance with IPERA Requirements

Improper Payment Criteria Compliance

Publish an AFR Yes

Conduct risk assessment Yes

Publish an improper payment estimate Yes

Publish corrective action plans Yes

Publish and meet reduction targets Yes

Report a gross improper payment rate 

of less than 10 percent

No

Source: OIG’s and TIGTA’s review of the Department of the Treasury Agency Financial 

Report for Fiscal Year 2019.

We also reviewed Treasury’s risk assessment process and 

recapture audit programs to determine the accuracy and 

completeness of Treasury improper payments reporting. We noted 

that Treasury (1) included the required improper payment 

disclosures in the AFR; (2) performed risk assessments using 

required criteria defined by OMB Circular A-123; and (3) conformed 

to OMB guidance for payment recapture audits. In addition, we 

determined that Treasury complied with the requirement to post 

required improper payment information to the 

paymentaccuracy.gov website.
Audit of Treasury's Compliance With the IPERA Requirements for

Fiscal Year 2019 (OIG-20-034) 10

Finding 1 Treasury Was Not in Compliance with IPERA for Fiscal 

Year 2019 

We determined that Treasury was not in compliance with IPERA for 

fiscal year 2019 due to the IRS not reporting an overall improper 

rate of less than 10 percent for the EITC, ACTC, and AOTC. 

Specifically, IRS reported an improper payment rate of 25.3 

percent (or $17.4 billion), 15.2 percent (or $7.2 billion), and 26.0 

percent (or $2.1 billion) for EITC, ACTC, and AOTC, respectively. 

IPERA requires a gross improper payment rate of less than 10 

percent for each program and activity for which an improper 

payment estimate was obtained and published in the AFR. This is 

the 9th consecutive year we have determined that Treasury is 

noncompliant with IPERA for not reporting a gross improper 

payment rate of less than 10 percent for one or more of its 

reported programs.

TIGTA identified that IRS does not use tools provided by Congress 

to the extent possible to address erroneous EITC, ACTC, and 

AOTC payments. The tools provided in the Internal Revenue Code 

include the authority to assess the erroneous refund penalty and 

require taxpayers to recertify that they meet refundable credit 

eligibility requirements, and the ability to apply 2-year or ten-year 

bans on taxpayers who disregard credit eligibility rules. TIGTA also 

noted that limited resources result in the majority of refundable 

credit claims with income discrepancies not being addressed.

On June 15, 2015, Treasury notified Congress of several proposed 

statutory changes to reduce the improper payment rate of the EITC 

program. As part of its notification, Treasury informed Congress 

that the Administration’s fiscal year 2016 budget included 

proposals that were intended to help improve EITC compliance by:

• Accelerating due dates for filing information returns, including 

Form W-2, Wage and Tax Statement (W-2), to facilitate early 

detection of income misreporting and fraud, including identity 

theft. This would allow IRS to identify erroneous EITC claims 

and stop the refunds before they are paid;

• Regulating tax return preparers, which would help reduce 

erroneous EITC claims by weeding out unscrupulous and 

incompetent preparers;
Audit of Treasury's Compliance With the IPERA Requirements for

Fiscal Year 2019 (OIG-20-034) 11

• Providing more flexible correctable error authority, which would 

help IRS to deny certain erroneous claims, including erroneous 

EITC claims, before refunds are paid;

• Increasing civil and criminal penalties for tax-related identity 

theft, which would prevent some erroneous EITC claims; and

• Simplifying the rules for claiming the EITC for taxpayers who 

reside with a child that they do not claim as a dependent, which 

would reduce taxpayer burden and improve EITC compliance.

Congress passed the Consolidated Appropriations Act of 2016, 

which became law on December 18, 20157. The law provides IRS 

with additional tools to reduce EITC improper payments. The 

provisions include:

• Effective for tax returns filed after December 18, 2015, 

individuals (primary, secondary, and dependent) must have a 

valid SSN issued on or before the due date of the tax return to 

be eligible to claim the EITC.

• Beginning in January 2017, employers and third-parties were 

required to file W-2s, and report on employee income by 

January 31 each year. These forms were previously due no later 

than March 31 (February 28 for paper filed forms) each year. 

The Act also prohibits IRS from issuing tax refunds before

February 15 when the tax return includes the EITC.

However, the Act did not expand IRS’s authority to systematically 

correct the erroneous claims that are identified when tax returns 

are processed. According to TIGTA, without this authority, IRS 

must still audit each tax return to prevent or recover the 

unsupported refundable credits. 

IRS has submitted a legislative proposal requesting correctable

error authority as part of its fiscal year 2021 budget submission.

According to TIGTA, IRS continues to request additional authority 

that would allow it to correct tax returns claiming a refundable 

credit with an income discrepancy. TIGTA made no 

recommendation related to this finding.

As part of our reporting process, we provided a draft of this report 

to Treasury management for review and comment. In a written 

 

7 Pub. L. No. 114-113, 129 Stat. 2242 (December 18, 2015).
Audit of Treasury's Compliance With the IPERA Requirements for

Fiscal Year 2019 (OIG-20-034) 12

response, management noted that it has long believed that RTCs

are not payments of the type the improper payments legislation 

was designed to address, as the tax system is a collection system 

rather than a payment system. Management noted that while a 

payment system is generally designed to implement internal 

controls that provide for appropriate verification and validation prior 

to payments being made, the statutory structure and design for 

administering RTCs prevent the IRS from verifying or validating 

such amounts prior to making the refund payment. Management 

also noted that RTC overclaims are not the result of internal control 

weaknesses that it can remediate internally but are, in fact, the 

result of factors beyond its control under current law and existing 

authority. Additionally, management noted that it will continue to 

collaborate with the IRS and OMB to identify a more effective 

process for reporting on the RTC programs in the Department’s 

AFR as part of a broader discussion on tax gap and tax burden.

Management’s response to our report is provided in appendix 4.

Treasury Inspector General for Tax Administration Audit Results

The following are excerpts from TIGTA’s fiscal year 2019 IPERA 

audit report. TIGTA made three recommendations in their report.

Finding 1 Assessment of Fiscal Year 2019 Compliance with Improper 

Payment Reporting Requirements

TIGTA continues to report that IRS has not reduced the overall 

EITC improper payment rate to less than 10 percent, however, it 

has been approved for an exception to the annual reduction target 

reporting requirement. As an alternative, OMB advised that a 

reduction target may remain constant given the complexities of the 

program, as long as the complexities are clearly explained in a 

footnote.

TIGTA also reported that IRS performed Quantitative Risk 

Assessments on the ACTC and AOTC resulting in its reporting of 

these refundable credits as susceptible to significant improper 

payments. Ranking the ACTC and AOTC as susceptible requires 

IRS to describe its actions or plans to prevent and reduce improper 
Audit of Treasury's Compliance With the IPERA Requirements for

Fiscal Year 2019 (OIG-20-034) 13

payments associated with these credits. However, the reporting 

requirements for the ACTC and the AOTC differ from the EITC 

because this program is identified by OMB as high priority. Similar 

to the EITC, IRS did not report an improper payment rate of less 

than 10 percent for either the ACTC or the AOTC.

TIGTA additionally reported that the risk of Net PTC improper 

payments is not included in the AFR. IRS estimates 27.4 percent 

(or $540.9 million) of the total Net PTC payments in Fiscal Year 

2019 were improper but management cautioned that the Net PTC 

error rates may change as additional compliance data becomes 

available. However, TIGTA continues to identify significant risks 

associated with improper PTC payments. According to IRS

management, it will not report improper payment rates for Net PTC 

because it is the Treasury Department’s position that reporting 

improper payment estimates for the PTC requires coordination with 

HHS, which shares responsibility for administering this credit.8

TIGTA reported9 that OMB established an interagency working 

group in fiscal year 2015 that included representatives from IRS, 

Treasury, Centers for Medicare and Medicaid Services, and HHS, 

as a collaborative effort to define the improper rate for the PTC 

that includes both the APTC and Net PTC. However, a definition of 

a PTC improper payment has not been agreed upon. According to 

IRS management, discussions have started again between IRS and 

the Centers for Medicare and Medicaid Services to resolve how to 

define a PTC improper payment. IRS management indicated that 

the goal is to have something in place by summer 2020.

Recommendations

In its report, TIGTA recommended that IRS work with HHS to 

develop a comprehensive risk assessment of improper PTC 

payments, including the risk of APTC improper payments.

 

8 The Department of Health and Human Services Centers for Medicare and Medicaid Services is 

responsible for determining the amount of the APTC the taxpayer is eligible to receive. 9 TIGTA, Ref. No. 2017-40-030, Revised Refundable Credit Risk Assessments Still Do Not Provide an 

Accurate Measure of the Risk of Improper Payments (Apr. 2017).
Audit of Treasury's Compliance With the IPERA Requirements for

Fiscal Year 2019 (OIG-20-034) 14

Finding 2 Authorities Provided by the Internal Revenue Code Are 

Not Effectively Used to Address Erroneous Refundable 

Credits

TIGTA reported10 on the results of its audit to evaluate IRS’s use of 

available tools to deter taxpayers from repeatedly claiming 

erroneous or fraudulent refundable tax credits in February 2020. 

TIGTA identified that IRS does not use the tools provided by 

Congress to the extent possible to address erroneous credit 

payments. The ineffective use of various authorities provided in the 

Internal Revenue Code is a contributing factor in the high rate of 

improper payments. TIGTA made eight recommendations in its 

February 2020 report. IRS only agreed or partially agreed with five

of the eight recommendations. TIGTA made no new 

recommendations to this finding. 

Finding 3 Increased Correctable Error Authority Could Reduce the 

Number of Potentially Erroneous Refundable Credit 

Payments

TIGTA reported that in order to give IRS the ability to identify 

improper refundable credit claims based on incorrect income 

reporting, Congress included provisions in the PATH Act of 2015. 

However, the PATH Act does not provide IRS with expanded 

correctable error authority to address these discrepancies. Without 

this authority, IRS must still audit each tax return to prevent or 

recover the unsupported refundable credits. As a result of limited 

resources, the majority of refundable credit claims with income 

discrepancies are not addressed. This in turn contributes to IRS’s 

inability to make any significant reduction in refundable credit 

improper payments via the use of earlier reporting of income 

information. IRS continues to request additional authority that 

would allow it to correct tax returns claiming a refundable credit 

with an income discrepancy. TIGTA made no recommendation 

related to this finding.

 

10 TIGTA, Ref. No. 2020-40-008, Authorities Provided by the Internal Revenue Code Are Not Effectively 

Used to Address Erroneous Refundable Credit and Withholding Credit Claims (Feb. 2020). 
Audit of Treasury's Compliance With the IPERA Requirements for

Fiscal Year 2019 (OIG-20-034) 15

Finding 4 Revising the Nonwork Social Security Number Case 

Selection Could Increase Revenue Protected

TIGTA reported that IRS still had not established processes to 

prevent individuals who have a nonwork SSN11 from receiving the 

EITC. The Tax Cuts and Jobs Act12, enacted in December 2017, 

changed the requirements for the ACTC, similar to EITC claims, to 

require an SSN that is valid for work for each qualifying dependent 

to claim the credit. As such, similar to EITC claims, ACTC claims in 

which dependent(s) were issued a nonwork SSN do not qualify for 

the ACTC. TIGTA recommended that IRS, based on the results of 

the nonwork SSN pilot conducted in Processing Years 2018 and 

2019, implement a process to systemically identify and evaluate 

tax returns filed by individuals who have nonwork SSNs to prevent 

erroneous refunds of the EITCs and the ACTCs.

TIGTA’s review of Processing Year 2019 tax returns identified that 

IRS could have selected from 20,335 tax returns with potentially 

erroneous refundable credits and increased the amount of revenue 

it is protecting by approximately $3.1 million if it included the 

ACTC in its selection criteria and prioritized its case selection. IRS 

management agreed that they should include the ACTC in their 

selection criteria and will review potentially erroneous ACTC claims 

as part of the cases selected during Processing Year 2020. In 

addition, IRS will implement new selection criteria specifically for 

the ACTC for Processing Year 2021. However, IRS did not agree 

with selecting cases with the largest EITC amounts stating the 

need to ensure coverage across all case types and cites a lack of 

resources as a reason why it cannot perform more examinations. 

Thus, prioritizing cases with the greatest potential for revenue 

protection allows IRS to use its limited resources in the most 

efficient manner.

 

11 A nonwork SSN is issued to obtain Federal benefits, e.g., Medicaid or food stamps, and is not valid 

for work. The Social Security Administration has issued almost eight million “NOT VALID FOR 

EMPLOYMENT” SSNs since 1972 to individuals who do not have authorization to work in the United 

States. 12 Pub. L. 115-97, 131 Stat. 2054.
Audit of Treasury's Compliance With the IPERA Requirements for

Fiscal Year 2019 (OIG-20-034) 16

Recommendations

In its report, TIGTA recommended that IRS continue to refine the 

selection criteria to ensure that returns with the greatest potential 

for revenue protection are selected and worked. TIGTA also 

recommended a process be implemented to systematically identify 

and evaluate tax returns filed by individuals who have a nonwork 

dependent SSN to prevent erroneous refunds of the ACTC.

* * * * * *

We appreciate the courtesies and cooperation provided to our staff 

during the audit. If you wish to discuss the report, you may 

contact me at (202) 927-0009, or Catherine Yi, Audit Manager, at 

(202) 927 5591. Major contributors to this report are listed in 

appendix 5. A distribution list for this report is provided as 

appendix 6.

/s/

James Hodge

Director, Financial Audits

Appendices
Audit of Treasury's Compliance With the IPERA Requirements for 

Fiscal Year 2019 (OIG-20-034) 17

Appendix 1: Treasury OIG Objective, Scope, and Methodology

The overall objective of our audit was to determine whether the 

Department of the Treasury (Treasury) complied with the improper 

payment reporting requirements for fiscal year 2019. We assessed 

Treasury’s compliance with the reporting requirements set forth in 

the Improper Payments Elimination and Recovery Act of 2010 

(IPERA); Executive Order 13520, Reducing Improper Payments and 

Eliminating Waste in Federal Programs; and the Improper Payment 

Elimination and Recovery Improvement Act of 2012 (IPERIA). Our 

audit scope covered the time period October 1, 2018 through 

September 30, 2019, and did not include the review of programs 

and activities administered by the Internal Revenue Service (IRS). 

The Treasury Inspector General for Tax Administration (TIGTA) is 

responsible for the audit of IRS’s compliance with improper 

payment reporting requirements.

To accomplish our objective, we performed the following activities 

during audit fieldwork conducted from February 2020 through May 

2020:

• We reviewed applicable laws, regulations, and guidance issued 

by the Office of Management and Budget (OMB), and Fiscal 

Year 2019 Treasury Implementation Guide for OMB Circular A123 Appendix C: Requirements for Payment Integrity 

Improvement (Treasury’s IPERA Guidance).

• We conducted interviews of Treasury’s and component entities’ 

personnel involved in the improper payments reporting.

• We reviewed the fiscal year 2019 Annual Financial Report (AFR) 

and any accompanying information to assess whether Treasury:

o published an AFR for the most recent fiscal year and 

posted that report and any accompanying materials 

required by OMB on Treasury’s website;

o conducted a program specific risk assessment for each 

program or activity that conforms with IPERIA, if 

required;

o published improper payment estimates for all programs 

and activities identified as susceptible to significant 

improper payments under its risk assessment, if required;
Appendix 1: Treasury OIG Objective, Scope, and Methodology

Audit of Treasury's Compliance With the IPERA Requirements for

Fiscal Year 2019 (OIG-20-034) 18

o published programmatic corrective action plans in the 

AFR, if required;

o published, and is meeting, annual reduction targets for 

each program assessed to be at risk and estimated for 

improper payments, if required and applicable; and 

o reported a gross improper payment rate of less than 10 

percent for each program and activity for which an 

improper payment estimate was obtained and published 

in the AFR.

• To assess Treasury’s risk assessment process, we randomly 

selected a statistical sample of 20 of 53 non-IRS programs 

identified by Treasury for risk assessment. For the sample 

design, a simple random number method was used to generate 

a representative sample. We did not project the sample results 

to the population. We used a 90 percent confidence level, a 1 

percent expected error rate and a +/-5.0 percent sample 

precision to calculate the sample size. To determine the 

completeness and accuracy of the information reported and 

compliance with the applicable guidance for the sample, we 

reviewed the program risk assessments and supporting 

documentation. We also provided the 20 components selected 

with an Office of Inspector General questionnaire and used their 

responses to evaluate their risk assessment methodologies. No 

exceptions were identified in the items tested.

• To assess Treasury’s payment recapture audit program, we 

tested all 20 reporting entities’ recapture audit. To determine 

the completeness and accuracy of the information reported, and 

compliance with the applicable guidance, we reviewed the 

components’ submissions of the payment recapture audit 

results along with supporting documentation and determined if 

the component (1) employed an internal control program to 

prevent, detect and recover overpayments; (2) considered all 

programs that expend $1 million or more annually; (3) prepared 

and submitted justifications for those programs that did not 

complete a payment recapture audit; (4) completed and 

submitted Payment Recapture Audit Results worksheets to 

Treasury’s Risk and Control Group; and (5) disposed of 

recovered funds in accordance with OMB guidance. In order to 

make this determination, we also obtained evidence through the 

components’ responses to our questionnaires and our interviews 

with component personnel.
Appendix 1: Treasury OIG Objective, Scope, and Methodology

Audit of Treasury's Compliance With the IPERA Requirements for

Fiscal Year 2019 (OIG-20-034) 19

We assessed the reliability of the improper payment data by (1) 

performing electronic testing, (2) reviewing existing information 

about the data and the system that produced them, and (3) 

interviewing Treasury’s and component entities’ personnel

knowledgeable about the data. We determined that the data were 

sufficiently reliable for the purposes of this report.

Management is responsible for the design, implementation, and 

operating effectiveness of the agency’s internal controls. We 

assessed the Treasury’s internal controls and compliance with 

policies and procedures necessary to satisfy the audit objective. In 

particular, we determined that Treasury’s and component entities’ 

review and monitoring activities were significant to Treasury’s 

improper payment reporting.

We assessed whether internal controls are properly designed and 

implemented through walkthroughs. In addition, we tested the 

operating effectiveness of the internal controls by reviewing and 

inspecting relevant documents and data and re-performing 

procedures. However, because our review was limited to these 

internal control components and underlying principles, it may not 

have disclosed all internal control deficiencies that may have 

existed at the time of this audit.

We conducted this performance audit in accordance with generally 

accepted government auditing standards. Those standards require 

that we plan and perform the audit to obtain sufficient, appropriate 

evidence to provide a reasonable basis for our findings and 

conclusions based on our audit objectives. We believe that the 

evidence obtained provides a reasonable basis for our findings and 

conclusions based on our audit objectives.
Audit of Treasury's Compliance With the IPERA Requirements for 

Fiscal Year 2019 (OIG-20-034) 20

Appendix 2: TIGTA’s Assessment of IRS Compliance With the

Improper Payment Reporting Requirements in Fiscal Year 2019 

and IRS Management Response

Improper Payment Reporting Has Improved; However, 

There Have Been No Significant Reductions to the 

Billions of Dollars of Improper Payments

April 30, 2020

Reference Number: 2020-40-025

TIGTACommunications@tigta.treas.gov | www.treasury.gov/tigta | 202-622-6500

This report has cleared the Treasury Inspector General for Tax Administration disclosure review process and information determined to 

be restricted from public release has been redacted from this document.

To report fraud, waste, or abuse, please call us at 1-800-366-4484

TREASURY INSPECTOR GENERAL FOR TAX ADMINISTRATION
Appendix 2: TIGTA’s Assessment of IRS Compliance With the Improper 

Payment Reporting Requirements in Fiscal Year 2019 and IRS 

Management Response

Audit of Treasury's Compliance With the IPERA Requirements for

Fiscal Year 2019 (OIG-20-034) 21

HIGHLIGHTS: Improper Payment Reporting Has Improved;

However, There Have Been No Significant Reductions to the

Billions of Dollars of Improper Payments 

Final Audit Report issued on April 30, 2020

Reference Number 2020-40-025

Why TIGTA Did This Audit

This audit was initiated because 

TIGTA is required to assess the 

IRS’s compliance with the 

reporting requirements contained 

in the Improper Payments 

Elimination and Recovery Act of 

2010; Executive Order 13520, 

Reducing Improper Payments; 

and the Improper Payments 

Elimination and Recovery 

Improvement Act of 2012. The 

objective of this review was to 

determine whether the IRS 

complied with the annual 

improper payment reporting 

requirements for Fiscal Year 2019. 

Impact on Taxpayers

The Improper Payments 

Elimination and Recovery Act of 

2010 and subsequent legislation 

strengthened agency reporting 

requirements and redefined 

“significant improper payments” 

in Federal programs. The Office of 

Management and Budget has 

declared the Earned Income Tax 

Credit (EITC) Program a 

high-priority program that is 

subject to reporting in the 

Department of the Treasury 

Agency Financial Report. 

The IRS estimates 25.3 percent 

($17.4 billion) of the total EITC 

payments of $68.7 billion made in 

Fiscal Year 2019 were improper.

What TIGTA Found

The IRS provided all required EITC improper payment information for 

inclusion in the Department of the Treasury Agency Financial Report Fiscal 

Year 2019. The IRS has not reduced the overall EITC improper payment rate 

to less than 10 percent; however, it has been approved for this exception to 

the annual reduction target reporting requirement. As an alternative, the 

Office of Management and Budget advised that a reduction target may 

remain constant given the complexities of the program, as long as the 

complexities are clearly explained in a footnote. 

For Fiscal Year 2019, in response to TIGTA recommendations, the IRS 

correctly rated the Additional Child Tax Credit (ACTC), the American 

Opportunity Tax Credit (AOTC), and the Net Premium Tax Credit (PTC) as 

being susceptible to significant improper payments, i.e., high risk, similar to 

the EITC. However, the IRS did not report the Net PTC improper payment 

estimates in the Agency Financial Report and will begin reporting in Fiscal 

Year 2020, as required by the Office of Management and Budget. The IRS 

estimates that 27.4 percent ($540.9 million) of the total Net PTC payments in 

Fiscal Year 2019 were improper. 

In addition, the IRS does not use the tools provided by Congress to the 

extent possible to address erroneous credit payments. For example, 

erroneous refund penalties are not being assessed, the majority of taxpayers 

who are recertified to receive a refundable credit do not meet eligibility 

requirements, and bans are not being used effectively. Furthermore, limited 

resources result in the majority of refundable credit claims with income 

discrepancies not being addressed. 

Finally, revising the nonwork Social Security Number case selection 

methodology could increase revenue protected. Our review of Processing 

Year 2019 tax returns identified that the IRS could have increased the 

amount of revenue it is protecting by approximately $3.1 million if it 

included the ACTC in its selection criteria and prioritized its case selection.

What TIGTA Recommended

TIGTA recommended that the IRS work with the Department of 

Health and Human Services to develop a comprehensive risk 

assessment of improper PTC payments, which includes the risk of the 

Advanced PTC improper payments. In addition, the IRS should 

continue to refine its selection criteria to ensure that the tax returns 

with the greatest potential are selected and worked, and implement 

a process to systemically identify and evaluate tax returns filed by 

individuals with nonwork dependent Social Security Numbers to 

prevent erroneous refunds of the ACTC. 

IRS management agreed with all three recommendations and plans 

to take appropriate corrective actions.
Appendix 2: TIGTA’s Assessment of IRS Compliance With the Improper 

Payment Reporting Requirements in Fiscal Year 2019 and IRS 

Management Response

Audit of Treasury's Compliance With the IPERA Requirements for

Fiscal Year 2019 (OIG-20-034) 22

U.S. DEPARTMENT OF THE TREASURY 

WASHINGTON, D.C. 20220

TREASURY INSPECTOR GENERAL

FOR TAX ADMINISTRATION 

April 30, 2020

MEMORANDUM FOR: COMMISSIONER OF INTERNAL REVENUE

FROM: Michael E. McKenney

Deputy Inspector General for Audit

SUBJECT: Final Audit Report – Improper Payment Reporting Has Improved; However, 

There Have Been No Significant Reductions to the Billions of Dollars of 

Improper Payments (Audit # 202040010)

This report presents the results of our review to determine whether the Internal Revenue Service complied with 

the annual improper payment reporting requirements for Fiscal Year 2019. This review is part of our Fiscal Year 

2020 Annual Audit Plan and addresses the major management and performance challenge of Reducing Fraudulent 

Claims and Improper Payments.

Management’s complete response to the draft report is included as Appendix IV.

Copies of this report are also being sent to the Internal Revenue Service managers affected by the report 

recommendations. If you have any questions, please contact me or Russell P. Martin, Assistant Inspector 

General for Audit (Returns Processing and Account Services).
Appendix 2: TIGTA’s Assessment of IRS Compliance With the Improper 

Payment Reporting Requirements in Fiscal Year 2019 and IRS 

Management Response

Audit of Treasury's Compliance With the IPERA Requirements for

Fiscal Year 2019 (OIG-20-034) 23

Improper Payment Reporting Has Improved; 

However, There Have Been No Significant Reductions to the 

Billions of Dollars of Improper Payments 

Table of Contents

Background.....................................................................................................................................Page 1

Results of Review.......................................................................................................................Page 3

Assessment of Fiscal Year 2019 Compliance With Improper 

Payment Reporting Requirements ................................................................................Page 3

Recommendation 1:...................................................................Page 7

Authorities Provided by the Internal Revenue Code Are Not 

Effectively Used to Address Erroneous Refundable Credits ................................Page 7

Increased Correctable Error Authority Could Reduce the 

Number of Potentially Erroneous Refundable Credit Payments........................Page 8

Revising the Nonwork Social Security Number Case 

Selection Could Increase Revenue Protected............................................................Page 9

Recommendations 2 and 3: .....................................................Page 11

Appendices

Appendix I – Detailed Objective, Scope, and Methodology................................Page 13

Appendix II – Outcome Measure....................................................................................Page 15

Appendix III – Internal Revenue Service Programs Identified 

for Improper Payment Risk Assessments ..................................................................Page 16

Appendix IV – Management’s Response to the Draft Report .............................Page 17

Appendix V – Abbreviations ............................................................................................Page.22
Appendix 2: TIGTA’s Assessment of IRS Compliance With the Improper 

Payment Reporting Requirements in Fiscal Year 2019 and IRS 

Management Response

Audit of Treasury's Compliance With the IPERA Requirements for

Fiscal Year 2019 (OIG-20-034) 24

Improper Payment Reporting Has Improved; 

However, There Have Been No Significant Reductions to the 

Billions of Dollars of Improper Payments 

Background

The Office of Management and Budget (OMB) defines an improper payment as any payment 

that should not have been made, was made in an incorrect amount, or was made to an 

ineligible recipient. Agency Inspectors General have responsibility for evaluating agency 

information related to improper payments. The Improper Payments Information Act (IPIA) of 

200213 requires Federal agencies, including the Internal Revenue Service (IRS), to estimate the 

amount of improper payments and report to Congress annually on the causes of and the 

steps taken to reduce improper payments. The IPIA also requires agencies to address whether 

they have the information systems and other infrastructure needed to reduce improper 

payments. The annual report must also describe steps the agency has taken to ensure that 

agency managers are held accountable for reducing improper payments. The following 

Executive Order and legislation clarified and expanded IPIA requirements:

• Executive Order 13520, Reducing Improper Payments – signed by the President on November 20, 2009, 

it increased Federal agencies’ accountability for reducing improper payments while continuing to ensure 

that Federal programs serve and provide access to intended beneficiaries. It requires Federal agencies to 

provide agency Inspectors General with detailed information on efforts to identify and reduce the number 

of improper payments in Federal programs with the highest dollar value of improper payments.

• Improper Payments Elimination and Recovery Act (IPERA) of 201014 – enacted on July 22, 2010, it 

amended the IPIA by strengthening agency reporting requirements and redefining “significant improper 

payments” in Federal programs. For Fiscal Year15 2014 and beyond, significant improper payments are 

defined as gross annual improper payments, i.e., the total amount of overpayments and underpayments. 

The gross annual improper payments is the total amount of overpayments plus underpayments made in 

the program during the fiscal year reported that a) exceeded both 1.5 percent of program outlays and $10 

million of all program or activity payments or b) exceeded $100 million at any percent of program outlays.

• Improper Payments Elimination and Recovery Improvement Act (IPERIA) of 201216– enacted on 

January 10, 2013, it further expanded agency improper payment requirements to foster greater agency 

accountability. Like Executive Order 13520, the IPERIA requires the OMB Director to identify a list of highpriority Federal programs. For those high-priority programs, the IPERIA requires agencies to develop 

additional or supplemental measures to track progress in reducing improper payments and submit an 

annual report to the Inspector General of the agency on the steps the agency has taken and plans to take 

to recover past and prevent future improper payments. The report is also required to be posted on a 

website accessible to the public.

On June 26, 2018, the OMB issued revisions to Circular A-123 Appendix C, Requirements for Payment Integrity 

Improvement. Circular A-123 Appendix C provides agencies and Inspectors 

 

13 Pub. L. No. 107-300, 116 Stat. 2350.

14 Pub. L. No. 111-204, 124 Stat. 2224.

15 Any yearly accounting period, regardless of its relationship to a calendar year. The Federal Government’s fiscal year begins on 

October 1 and ends on September 30. 

16 Pub. L. No. 112-248, 126 Stat. 2390.
Appendix 2: TIGTA’s Assessment of IRS Compliance With the Improper 

Payment Reporting Requirements in Fiscal Year 2019 and IRS 

Management Response

Audit of Treasury's Compliance With the IPERA Requirements for

Fiscal Year 2019 (OIG-20-034) 25

Improper Payment Reporting Has Improved; 

However, There Have Been No Significant Reductions to the 

Billions of Dollars of Improper Payments 

General with guidance on the implementation of the IPIA as amended by the IPERA, the IPERIA, and Executive Order 

13520. According to the OMB, the goal of the revised Appendix C is to transform the improper payment 

compliance framework to create a more unified, comprehensive, and less burdensome set of requirements. For 

example, agencies are compliant with most improper payments reporting requirements through the Agency 

Financial Report.17 The IPERA adds an important component of accountability to the entire spectrum of improper 

payment efforts. Every year, each agency Inspector General reviews its agency’s improper payment reporting in the 

agency’s Agency Financial Report and any accompanying material, such as that provided on paymentaccuracy.gov, 

to determine if the agency complies with IPERA and OMB guidance.

Process to identify IRS programs for improper payment risk assessment

The Department of the Treasury (Treasury Department) identifies the programs that the IRS must assess for the risk 

of improper payments. For Fiscal Year 2019, the Treasury Department selected 21 IRS program fund groups. These 

funds were selected for assessment based on each fund groups’ materiality to IRS financial statements. On 

March 20, 2014, the OMB issued additional supplemental improper payment guidance to the Treasury Department 

clarifying the requirement for annual risk assessments for most refundable tax credits. In addition, the OMB’s 

revised guidance allows agencies to conduct improper payment risk assessments at least once every three years for 

programs that are deemed to be a low risk for susceptibility to significant improper payments. The IRS received 

approval from the Treasury Department to conduct these risk assessments on a three-year rotational schedule 

starting in Fiscal Year 2018. Appendix III provides a list of the 12 IRS programs for which the IRS completed an 

improper payment risk assessment for Fiscal Year 2019. 

The IRS used Quantitative Risk Assessment Summaries and Qualitative Risk Assessment Questionnaires for Fiscal 

Year 2019 and related guidance the Treasury Department provided to assess the level of risk for each identified 

program. A Quantitative Risk Assessment Summary is a review of a sample of disbursements to formulate the 

overall estimated improper payment rate. A Qualitative Risk Assessment Questionnaire is a questionnaire used to 

assess a program’s internal controls, which could lead to susceptible improper payments. The Treasury Department 

updated the Qualitative Risk Assessment ratings to susceptible or not susceptible. 

The IRS is required to forward the results and documentation supporting the risk assessments performed to the 

Treasury Department. For any program identified as susceptible to significant improper payments (hereafter 

referred to as high risk), the IRS must also provide the following information for inclusion in the Treasury 

Department’s annual Agency Financial Report in the following fiscal year:

• The rate and amount of improper payments.

• The root causes of the improper payments.

• Actions taken to address the root causes.

• Annual improper payment reduction targets.

• Discussion of any limitations to the IRS’s ability to reduce improper payments

 

17 The Agency Financial Report presents the Treasury Department’s financial and performance 

information for the fiscal year with comparative prior year data, where appropriate. 
Appendix 2: TIGTA’s Assessment of IRS Compliance With the Improper 

Payment Reporting Requirements in Fiscal Year 2019 and IRS 

Management Response

Audit of Treasury's Compliance With the IPERA Requirements for

Fiscal Year 2019 (OIG-20-034) 26

Improper Payment Reporting Has Improved; 

However, There Have Been No Significant Reductions to the 

Billions of Dollars of Improper Payments 

Results of Review

For Fiscal Year 2019, in response to Treasury Inspector General for Tax Administration (TIGTA) recommendations,18

the IRS correctly rated the Additional Child Tax Credit (ACTC) and the American Opportunity Tax Credit (AOTC) as 

also being susceptible to significant improper payments (hereafter referred to as high risk) similar to the Earned 

Income Tax Credit (EITC). The specific dollar amount and percentage rate of improper payments the IRS calculated 

for these programs is as follows:

• EITC - The IRS estimates 25.3 percent ($17.4 billion) of the total EITC payments of $68.7 billion made in 

Fiscal Year 2019 were improper.

• ACTC - The IRS estimates 15.2 percent ($7.2 billion)19 of the total ACTC payments of $47.7 billion in Fiscal 

Year 2019 were improper.

• AOTC – The IRS estimates 26.0 percent ($2.1 billion)20 of the total AOTC payments of $7.9 billion in Fiscal 

Year 2019 were improper.

However, the IRS still did not include the Net Premium Tax Credit (PTC) improper payment rate and amount in the 

Agency Financial Report. The lacking of reporting is despite IRS estimates that 27.4 percent ($540.9 million) of the 

total Net PTC payments in Fiscal Year 2019 were improper. Per OMB guidance, the IRS is required to begin 

reporting the Net PTC improper payment estimates in Fiscal Year 2020.

Finally, the IRS has made little progress to reduce the improper payments associated with the refundable credit 

programs it administers. However, there are actions that the IRS can take that include more effectively using 

authorities provided by the Internal Revenue Code. In addition to using existing authorities more effectively, 

Congress could also assist the IRS by expanding the IRS’s authority (referred to as correctable error authority or 

math error authority) to correct tax returns with identified erroneous refundable credit claims during processing. 

Assessment of Fiscal Year 2019 Compliance With Improper Payment Reporting 

Requirements

The OMB has identified the EITC as a high-priority program. As such, the IRS is required to report annually on its 

efforts to reduce EITC improper payments. Our review confirmed that the IRS provided all required EITC improper 

payment information to the Treasury Department for inclusion in the Department of the Treasury Agency Financial 

Report Fiscal Year 2019. The IRS has not reduced the overall EITC improper payment rate to less than 10 percent. 

However, the IRS has been approved for an exception to the annual reduction target reporting requirement. As an 

alternative, the OMB advised that a reduction target may remain constant given the complexities of the program, as 

long as the complexities are clearly explained in a footnote. 

 

18 TIGTA, Ref. No. 2016-40-036, Without Expanded Error Correction Authority, Billions of Dollars of Identified Potentially Erroneous 

Earned Income Credit Claims Will Continue to Go Unaddressed Each Year (Apr. 2016) and TIGTA, Ref. No. 2014-40-093, Existing 

Compliance Processes Will Not Reduce the Billions of Dollars in Improper Earned Income Tax Credit and Additional Child Tax Credit 

Payments (Sept. 2014). 19 Percentage does not calculate due to rounding.

20 Percentage does not calculate due to rounding.
Appendix 2: TIGTA’s Assessment of IRS Compliance With the Improper 

Payment Reporting Requirements in Fiscal Year 2019 and IRS 

Management Response

Audit of Treasury's Compliance With the IPERA Requirements for

Fiscal Year 2019 (OIG-20-034) 27

Improper Payment Reporting Has Improved; 

However, There Have Been No Significant Reductions to the 

Billions of Dollars of Improper Payments 

Figure 1 provides a summary of our evaluation of the IRS’s compliance with the various

improper payment reporting requirements.

Figure 1: IRS Compliance With Improper Payment 

Requirements for the EITC Program for Fiscal Year 2019

Improper Payment Requirement Source of Requirement Provided by 

the IRS 

Conduct a program-specific risk assessment for each program 

or activity identified by the Treasury Department. IPERA Yes

Publish an improper payment estimate for the EITC. IPERA Yes

Report an improper payment rate of less than 10 percent for 

the EITC. IPERA No

Provide the methodology for identifying and measuring EITC 

improper payments. Executive Order Yes

Publish improper payment reduction targets.21 IPERA Yes

Publish a programmatic corrective action plan. IPERA Yes

Report on actions the IRS intends to take to prevent future EITC 

improper payments. IPERIA Yes

Report on efforts taken or planned to recapture EITC improper 

payments. IPERIA Yes

Provide plans and supporting analysis for ensuring that the 

initiatives undertaken do not unduly burden program access 

and participation by eligible beneficiaries.

Executive Order Yes

Provide required EITC information for posting to the 

paymentaccuracy.gov website. Executive Order/IPERIA Yes

Source: TIGTA’s review of the IRS’s Compliance with EITC improper payment reporting requirements for

Fiscal Year 2019.

Use of quantitative assessment confirmed the risk of improper payment associated with the ACTC and the AOTC is 

high and will require reporting in subsequent fiscal years

We previously recommended that the IRS ensure that risk assessments accurately report the ACTC and the AOTC as high 

risk, and revise the methodology used to conduct the Annual Improper Payment Risk Assessment for refundable tax 

credits to include a quantitative assessment. In response, in Fiscal Year 2019, the IRS performed Quantitative Risk 

Assessments on the ACTC and the AOTC, resulting in its reporting of these refundable credits as high risk. Ranking the 

ACTC and the AOTC as high risk requires the IRS to describe its actions or plans to prevent and reduce improper 

payments associated with these credits. However, the reporting 

 

21 The IRS is required to submit quarterly scorecards to show progress made in lieu of reduction targets. In addition, if the reduction 

target is a constant, a footnote should clearly explain the complexities surrounding the program.
Appendix 2: TIGTA’s Assessment of IRS Compliance With the Improper 

Payment Reporting Requirements in Fiscal Year 2019 and IRS 

Management Response

Audit of Treasury's Compliance With the IPERA Requirements for

Fiscal Year 2019 (OIG-20-034) 28

Improper Payment Reporting Has Improved; 

However, There Have Been No Significant Reductions to the 

Billions of Dollars of Improper Payments 

requirements for the ACTC and the AOTC differ from the EITC because this program is identified by the OMB as 

high-priority. Figure 2 provides a summary of our evaluation of the IRS’s compliance with improper payment 

reporting requirements for the ACTC and the AOTC. Similar to the EITC, the IRS did not report an improper 

payment rate of less than 10 percent for either the ACTC or the AOTC.

Figure 2: IRS Compliance With Improper Payment Requirements 

for the ACTC and AOTC Programs for Fiscal Year 2019

Improper Payment Requirement Source of Requirement Provided by 

the IRS 

Conduct a program-specific risk assessment for each 

program or activity identified by the Treasury 

Department.

IPERA Yes

Publish an improper payment estimate. IPERA Yes

Report an improper payment rate of less than 

10 percent. IPERA No

Publish improper payment reduction targets.22 IPERA Yes

Publish a programmatic corrective action plan. IPERA Yes

Source: TIGTA’s review of the IRS’s compliance with ACTC and AOTC improper payment reporting 

requirements for Fiscal Year 2019.

The risk of Net PTC improper payments is not included in the Agency Financial Report

The IRS estimates 27.4 percent ($540.9 million) of the total Net PTC payments in Fiscal Year 2019 were improper. 

This amount confirms that the improper payments, as defined by OMB guidance, meet IPERA guidelines for rating 

as a high risk. The IRS is required to begin reporting these estimates in Fiscal Year 2020 per OMB guidance. 

Programs are to be rated as high risk when they are susceptible to significant improper payments under the IPIA. 

Per the OMB, significant improper payments are defined as gross annual improper payments in the program 

exceeding a) both 1.5 percent of program outlays and $10 million of all program or activity payments made during 

the fiscal year reported or b) $100 million regardless of the improper payment percentage of total program outlays.

IRS management cautioned that the Net PTC error rates may change as additional compliance data become 

available. In addition, IRS management indicated that the Fiscal Year 2019 Net PTC improper payment estimates do 

not meet OMB statistical requirements due to the lack of compliance data available. Although additional 

compliance data may change the Net PTC error rates and the IRS’s improper payment estimates, we continue to 

identify significant risks associated with improper PTC payments. For example, our analysis of Processing Year 2019 

tax returns as of May 2, 2019, found that the IRS processed 4.8 million tax returns that self-reported nearly 

$37.7 billion in the PTCs that were either received in advance or claimed at the time of filing.23 A total of $4.5 

billion in Advanced PTCs (APTC) claimed by these filers was in excess of 

 

22 If reduction targets are a constant, the IRS is required to clearly explain, in a footnote, the complexities surrounding the program.

23 TIGTA, Ref. No. 2020-44-007, Results of the 2019 Filing Season (Jan. 2020). 
Appendix 2: TIGTA’s Assessment of IRS Compliance With the Improper 

Payment Reporting Requirements in Fiscal Year 2019 and IRS 

Management Response

Audit of Treasury's Compliance With the IPERA Requirements for

Fiscal Year 2019 (OIG-20-034) 29

Improper Payment Reporting Has Improved; 

However, There Have Been No Significant Reductions to the 

Billions of Dollars of Improper Payments 

the amount of the PTCs to which they were entitled, an increase from $3.7 billion in Processing Year 2018. A total 

of $1.3 billion of the amount of excess APTCs was not required to be repaid, which increased from $1 billion in 

Processing Year 2018.24 Figure 3 provides a comparison of PTC statistics for Processing Years 2017 through 2019, 

which continues to show the risk associated with improper PTC payments is high. 

Figure 3: PTC Statistics for Processing Years 2017 Through 2019

Processing 

Year 2017 as of 

May 4, 2017 

Processing 

Year 2018 as of 

May 3, 2018 

Processing 

Year 2019 as of May 2, 

2019 

Total Tax Returns With the PTC 5.1 million 4.9 million 4.8 million

Total PTC Amount (includes the

APTC and the PTC) $23.9 billion $27.0 billion $37.7 billion

 Total APTC Amount $22.5 billion $25.6 billion $36.4 billion

 Total PTC Claimed at Filing in 

Excess of the APTC $1.4 billion $1.4 billion $1.3 billion

Tax Returns With Excess APTC Payments –

(taxpayer receives more APTC than the PTC entitled to and has to repay) 

Total Tax Returns 2.8 million 2.7 million 2.6 million

Total PTC Amount $7.5 billion $9.8 billion $13.5 billion

Total APTC Amount $13.4 billion $13.5 billion $18 billion

Total APTC Reported in Excess of 

the PTC $5.8 billion $3.7 billion $4.5 billion

Tax Returns With Excess APTC Payments –

(taxpayer receives more APTC than the PTC entitled to and has to repay)

Total APTC Above the Repayment Limit 

(not repaid) $3.5 billion $1.0 billion $1.3 billion

Total APTC Below the Repayment Limit 

(repaid) $2.3 billion $2.7 billion $3.2 billion

Source: TIGTA’s analysis of Individual Master File posted tax return information as of May 4, 2017, May 3, 2018, and May 2, 2019. Totals may 

not add due to rounding. 

According to the IRS, it will not report improper payment rates for Net PTC because it is the Treasury Department’s 

position that reporting improper payment estimates for the PTC requires coordination with the Department of Health and 

Human Services, which shares responsibility for administering this credit.25 In April 2017,26 we reported that the OMB

established an interagency working group in Fiscal Year 2015 that included representatives from the IRS, the Treasury 

Department, the Centers for Medicare and Medicaid Services, and the Department of

 

24 The Affordable Care Act limits the amount of tax that individuals with income between 100 percent and 400 percent of the Federal 

Poverty Line will have to repay.

25 The Department of Health and Human Services Centers for Medicare and Medicaid Services is responsible for determining the amount 

of the APTC the taxpayer is eligible to receive.

26 TIGTA, Ref. No. 2017-40-030, Revised Refundable Credit Risk Assessments Still Do Not Provide an Accurate Measure of the Risk of 

Improper Payments (Apr. 2017).
Appendix 2: TIGTA’s Assessment of IRS Compliance With the Improper 

Payment Reporting Requirements in Fiscal Year 2019 and IRS 

Management Response

Audit of Treasury's Compliance With the IPERA Requirements for

Fiscal Year 2019 (OIG-20-034) 30

Improper Payment Reporting Has Improved; 

However, There Have Been No Significant Reductions to the 

Billions of Dollars of Improper Payments 

Health and Human Services. The group was established as a collaborative effort to develop an assessment of 

improper payment risk across all payments made from the PTC budget fund account; i.e., to define the improper 

rate for the PTC that includes both the APTC and the Net PTC. However, a definition of a PTC improper payment 

has not been agreed upon. According to IRS management, discussions have started again between the IRS and the 

Centers for Medicare and Medicaid Services to resolve how to define a PTC improper payment. IRS management 

indicated that the goal is to have something in place by summer 2020. 

Recommendation 1: The Chief Financial Officer and the Commissioner, Wage and Investment Division, should 

work with the Department of Health and Human Services to develop a comprehensive risk assessment of improper 

PTC payments, including the risk of APTC improper payments.

Management’s Response: The IRS agreed with the spirit and intention of this recommendation and plans 

to continue supporting the interagency work group mentioned in the report. The group will continue to 

develop an assessment of improper payment risk for PTC payments and define the improper rate for the 

PTC that includes the APTC and the Net PTC. 

Authorities Provided by the Internal Revenue Code Are Not Effectively Used to Address 

Erroneous Refundable Credits

In February 2020, we reported27 on the results of our audit to evaluate the IRS’s use of available tools to deter 

taxpayers from repeatedly claiming erroneous or fraudulent refundable tax credits. Our review identified that the 

IRS does not use the tools provided by Congress to the extent possible to address erroneous credit payments. For 

example: 

• Erroneous refund penalties28 are not being assessed on the majority of taxpayers with reduced or 

disallowed refundable credit claims. For example, for Tax Years 2015, 2016, and 2017, the IRS

disallowed more than $1.7 billion in refundable credit claims but did not assess more than $341 million in 

erroneous refund penalties. Congress provided the IRS with this penalty as a tool to deter aggressive 

claims for tax refunds and credits by increasing the cost to individuals who attempt to claim erroneous 

refunds.

• The majority of taxpayers who are recertified29 do not meet eligibility requirements. Our review 

identified 311,883 tax returns in which the taxpayers’ tax accounts had a recertification indicator that either 

were processed during Calendar Year 201830 or had an examination that was closed during Fiscal Year 

2018. We identified 289,059 (93 percent) returns for which the IRS did not verify the taxpayers’ eligibility 

before recertifying them to receive a refundable credit. These taxpayers received more than $532 million in 

refundable credits.

 

27 TIGTA, Ref. No. 2020-40-008, Authorities Provided by the Internal Revenue Code Are Not Effectively Used to Address Erroneous 

Refundable Credit and Withholding Credit Claims (Feb. 2020). 28 The Small Business and Work Opportunity Tax Act of 2007 provides the IRS with the ability to assess the erroneous claim for refund or 

credit penalty (referred to as the erroneous refund penalty). 29 The Internal Revenue Code requires individuals whose EITC, ACTC, or AOTC claim has been reduced or disallowed to recertify their 

eligibility before they can receive the credit again.

30 As of July 31, 2018.
Appendix 2: TIGTA’s Assessment of IRS Compliance With the Improper 

Payment Reporting Requirements in Fiscal Year 2019 and IRS 

Management Response

Audit of Treasury's Compliance With the IPERA Requirements for

Fiscal Year 2019 (OIG-20-034) 31

Improper Payment Reporting Has Improved; 

However, There Have Been No Significant Reductions to the 

Billions of Dollars of Improper Payments 

• Bans are not being used effectively to address refundable credit noncompliance and ensure 

efficient use of limited examination resources. Our analysis of 1.9 million taxpayers who claimed the 

EITC, the ACTC, or the AOTC in Tax Year 2017 and did not have a ban on their tax accounts identified 3,934 

taxpayers31 who were allowed to claim more than $12.9 million in credits despite having the same credit 

disallowed in the two prior tax years (Tax Years 2015 and 2016). We estimate it costs the IRS nearly 

$1.1 million to re-audit taxpayers who had already been denied the EITC, the ACTC, or the AOTC in two 

prior audits.

The ineffective use of the various authorities provided in the Internal Revenue Code is a contributing factor in the 

high rate of improper payments. These existing legislatively granted tools include the authority to assess the 

erroneous refund penalty and require taxpayers to recertify that they meet refundable credit eligibility requirements 

for credits claimed on a return filed subsequent to disallowance of a credit, and the ability to apply two-year or 10-

year bans on taxpayers who disregard credit eligibility rules. However, the IRS does not use these tools to the 

extent possible to address erroneous credit payments. 

TIGTA made eight recommendations to the IRS Commissioner, Wage and Investment Division, in its February 2020 

report. The IRS agreed or partially agreed with five recommendations. The IRS did not agree to examine all tax 

returns with a recertification indicator, modify systemic processes to apply the two-year ban after two audits result 

in the disallowance of a refundable credit, or develop a plan to obtain and use information from the Social Security 

Administration of individuals who admit to falsely reporting self-employment income to receive refundable credits.

Increased Correctable Error Authority Could Reduce the Number of Potentially 

Erroneous Refundable Credit Payments

To give the IRS the ability to identify improper refundable credit claims based on incorrect income reporting, 

Congress included provisions in the Protecting Americans From Tax Hikes Act of 201532 that changed the date for 

third parties to file Form W-2, Wage and Tax Statement, and report nonemployee income on Form 1099-MISC, 

Miscellaneous Income, to January 31. The Act also prohibits the IRS from issuing tax refunds prior to February 15 

when the tax return includes the EITC or the ACTC to provide adequate time to verify income reported on these 

returns. However, the Protecting Americans From Tax Hikes Act does not provide the IRS with expanded 

correctable error authority to address these discrepancies. Without this authority, the IRS must still audit each tax 

return to prevent or recover the unsupported refundable credits. As a result of limited resources, the majority of 

refundable credit claims with income discrepancies are not addressed.

This in turn contributes to the IRS’s inability to make any significant reduction in refundable credit improper 

payments via the use of earlier reporting of income information. For example, as of May 2, 2019, our analysis of Tax 

Year 2018 tax returns identified more than 3.5 million tax returns with an income discrepancy of $1,000 or greater 

between what was reported on the tax returns and what was reported on Forms W-2, and the IRS did not select 

these returns for 

 

31 The 3,934 taxpayers are limited to those taxpayers who the IRS audited at least twice during Tax Years 2015 through 2017, and two or 

more of the audits were closed with a status other than undeliverable, i.e., the taxpayer received the audit letter. 32 Pub. L. No. 114-113, 129 Stat. 2242 (2015).
Appendix 2: TIGTA’s Assessment of IRS Compliance With the Improper 

Payment Reporting Requirements in Fiscal Year 2019 and IRS 

Management Response

Audit of Treasury's Compliance With the IPERA Requirements for

Fiscal Year 2019 (OIG-20-034) 32

Improper Payment Reporting Has Improved; 

However, There Have Been No Significant Reductions to the 

Billions of Dollars of Improper Payments 

further review. Refunds associated with these tax returns totaled more than $16.6 billion, which included more than 

$8.3 billion in the EITC and more than $4.3 billion in the ACTC. For 963,618 of the tax returns, we identified that the 

IRS received no third-party Forms W-2 supporting the wages reported on the returns (for which more than 

$3.3 billion in the EITCs and/or the ACTCs was paid). Figure 4 shows the number of Tax Years 2016 through 2018 

tax returns that received the EITC and the ACTC and did not have a Form(s) W-2 to support reported wages.

Figure 4: Tax Years 2016 Through 2018 Returns Without 

Form(s) W-2 to Support Wages Reported on Returns

Tax Year Number of Returns EITC/ACTC Received 

201633 660,141 $2.6 billion

201734 278,174 $1.0 billion

201835 963,618 $3.3 billion

Totals 1,901,933 $6.9 billion

Source: Previous TIGTA audit reports.

The IRS continues to request additional authority that would allow it to correct tax returns claiming a refundable 

credit with an income discrepancy. The IRS requested this authority to address returns during processing when the 

information provided by the taxpayer does not match the information contained in Government databases, e.g., 

income information reported on the tax return does not match Form W-2 information the IRS receives from the 

Social Security Administration.

Revising the Nonwork Social Security Number Case Selection Could Increase 

Revenue Protected

In July 2017,36 we reported that the IRS had not established processes to prevent individuals who have a nonwork 

Social Security Number (SSN)37 from receiving the EITC.38 In response, the IRS initiated a pilot program to identify 500 

tax returns with EITC claims during processing in which claimants were issued a nonwork SSN and, as such, do not qualify 

 

33 TIGTA, Ref. No. 2020-44-007, Results of the 2019 Filing Season (Jan. 2020). 34 TIGTA, Ref. No. 2019-40-039, Some Refundable Credits Are Still Not Classified and Reported Correctly as a High Risk for Improper 

Payment by the Internal Revenue Service (May 2019). 35 TIGTA, Ref. No. 2018-40-015, Employer Noncompliance With Wage Reporting Requirements Significantly Reduces the Ability to Verify 

Refundable Tax Credit Claims Before Refunds Are Paid (Feb. 2018). 36 TIGTA, Ref. No. 2017-40-042, Processes Do Not Maximize the Use of Third-Party Income Documents to Identify Potentially Improper 

Refundable Credit Claims (July 2017). 37 A nonwork SSN is issued to obtain Federal benefits, e.g., Medicaid or food stamps, and is not valid for work. The Social Security 

Administration has issued almost eight million “NOT VALID FOR EMPLOYMENT” SSNs since 1972 to individuals who do not have 

authorization to work in the United States.

38 The Personal Responsibility and Work Opportunity Reconciliation Act of 1996, enacted August 22, 1996, requires individuals claiming 

the EITC to have a SSN that is valid for work and authorizes the IRS to deny claims to those individuals who file using an invalid SSN. 
Appendix 2: TIGTA’s Assessment of IRS Compliance With the Improper 

Payment Reporting Requirements in Fiscal Year 2019 and IRS 

Management Response

Audit of Treasury's Compliance With the IPERA Requirements for

Fiscal Year 2019 (OIG-20-034) 33

Improper Payment Reporting Has Improved; 

However, There Have Been No Significant Reductions to the 

Billions of Dollars of Improper Payments 

for the EITC. The claimant is asked to provide documentation that he or she no longer has a nonwork SSN (now has 

one that is valid for work) and as such qualifies for the EITC claimed. If the claimant cannot

provide the documentation or fails to respond to the notice, the IRS will disallow the credit. Figure 5 provides a 

breakdown, for Processing Years 2018 and 2019, of the number of returns filed by nonwork SSN individuals the IRS 

selected for review, the number of the returns with reversed EITC, and the amount of revenue protected associated 

with the erroneous returns.

Figure 5: Returns With Nonwork SSNs Selected by the IRS

Processing 

Year 

Number of Returns 

Selected 

Number of Returns with 

Reversed EITC Revenue Protected 

2018 500 341 $1.3 million

2019 1,142 782 $3.2 million

Totals 1,642 1,123 $4.5 million

Source: Return Integrity and Compliance Services function management. Filing Season 2018 data 

as of October 27, 2018, and Filing Season 2019 data as of February 6, 2019. 

The Tax Cuts and Jobs Act,39 enacted in December 2017, changed the requirements for the ACTC, similar to EITC 

claims, to require an SSN that is valid for work for each qualifying dependent to claim the credit. As such, similar to 

EITC claims, ACTC claims in which dependent(s) were issued a nonwork SSN do not qualify for the ACTC. In our 

prior report, and in response to the provision included in the Tax Cuts and Jobs Act,40 we also recommended that 

the IRS, based on the results of the nonwork SSN pilot conducted in Processing Years 2018 and 2019, implement a 

process to systemically identify and evaluate tax returns filed by individuals who have nonwork SSNs to prevent 

erroneous refunds of the EITCs and the ACTCs. The IRS agreed with this recommendation.

Selecting cases with both EITC and ACTC claims increases the amount of revenue the IRS 

can protect

Our review of Processing Year 2019 tax returns identified that the IRS could have selected from 20,335 tax returns 

with potentially erroneous refundable credits and increased the amount of revenue it is protecting by 

approximately $3.1 million if it included the ACTC in its selection criteria and prioritized its case selection. Figure 6 

shows the potential revenue protected using the IRS’s current selection method and TIGTA’s analysis using the 

ACTC and prioritizing case selection.

 

39 Pub. L. No. 115-97. 40 TIGTA, Ref. No. 2019-40-039, Some Refundable Credits Are Still Not Classified and Reported Correctly as a High Risk for Improper 

Payment by the Internal Revenue Service (May 2019).
Appendix 2: TIGTA’s Assessment of IRS Compliance With the Improper 

Payment Reporting Requirements in Fiscal Year 2019 and IRS 

Management Response

Audit of Treasury's Compliance With the IPERA Requirements for

Fiscal Year 2019 (OIG-20-034) 34

Improper Payment Reporting Has Improved; 

However, There Have Been No Significant Reductions to the 

Billions of Dollars of Improper Payments 

Figure 6: Revenue Protection of IRS Nonwork SSN Selections

Source: TIGTA analysis of the Individual Return Transaction File as of December 12, 2019, and the National 

Account Profile as of September 26, 2019.

On January 23, 2020, we notified IRS management of our concerns with the nonwork SSN program. IRS 

management agreed that they should include the ACTC in their selection criteria and will review potentially 

erroneous ACTC claims as part of the cases selected during Processing Year 2020. In addition, the IRS will 

implement new selection criteria specifically for the ACTC for Processing Year 2021. However, the IRS did not agree 

with selecting cases with the largest EITC amounts stating the need to ensure coverage across all case types. The 

IRS cites a lack of resources as a reason why it cannot perform more examinations. Thus, prioritizing cases with the 

greatest potential for revenue protection allows the IRS to use its limited resources in the most efficient manner.

The Commissioner, Wage and Investment Division, should 

Recommendation 2: Continue to refine the selection criteria to ensure that returns with the greatest potential for 

revenue protection are selected and worked.

Management’s Response: The IRS agreed with this recommendation and has already begun this process 

by adding three subrules (automated controls) derived from a research effort to point to selections with 

the greatest potential for revenue protection. IRS management plans to continue this effort in 2020 with 

the goal of improving the accuracy in 2021.

Recommendation 3: Implement a process to systemically identify and evaluate tax returns filed by individuals who 

have a nonwork dependent SSN to prevent erroneous refunds of the ACTC.

Management’s Response: The IRS agreed with this recommendation and plans to work with its 

Information Technology function to deliver a subrule to address this issue.
Appendix 2: TIGTA’s Assessment of IRS Compliance With the Improper 

Payment Reporting Requirements in Fiscal Year 2019 and IRS 

Management Response

Audit of Treasury's Compliance With the IPERA Requirements for

Fiscal Year 2019 (OIG-20-034) 35

Improper Payment Reporting Has Improved; 

However, There Have Been No Significant Reductions to the 

Billions of Dollars of Improper Payments 

In the interim, IRS management plans to add this as an issue when the return is selected for the EITC
Appendix 2: TIGTA’s Assessment of IRS Compliance With the Improper 

Payment Reporting Requirements in Fiscal Year 2019 and IRS 

Management Response

Audit of Treasury's Compliance With the IPERA Requirements for

Fiscal Year 2019 (OIG-20-034) 36

Improper Payment Reporting Has Improved; 

However, There Have Been No Significant Reductions to the 

Billions of Dollars of Improper Payments 

Appendix I

Detailed Objective, Scope, and Methodology

Our overall objective is to determine whether the IRS complied with the annual improper payment reporting 

requirements for Fiscal Year 2019. To accomplish our objective, we:

• Determined if the IRS complied with the improper payment reporting requirements for Fiscal Year 2019.

• Reviewed the information the IRS provided to the Treasury Department for inclusion in the Agency 

Financial Report to determine if information was provided to satisfy the reporting requirements.

• Reviewed information that the IRS provided to the Treasury Department for posting to the 

paymentaccuracy.gov website.

• Determined if the information included in the Fiscal Year 2019 Treasury Agency Financial Report relative to 

EITC improper payments accurately reflects the underlying information from the IRS and was posted to 

paymentaccuracy.gov or other Internet locations as required.

• Evaluated the adequacy of the IRS’s updated methodology to calculate ACTC and AOTC improper payment 

rate and dollar amounts.

• Determined the potential ACTC and AOTC improper payment rate for Fiscal Year 2019. We ensured that 

the IRS’s determination of improper payment risk was consistent with the potential improper payment rate.

• Determined the potential PTC improper payment rate for Fiscal Year 2019. We ensured that IRS 

determination of improper payment risk was consistent with the potential improper payment rate. We 

evaluated the IRS’s efforts to evaluate the risk of PTC improper payments.

• Evaluated the adequacy of the IRS’s Fiscal Year 2019 risk assessment for the Treasury Departmentidentified revenue program funds.

• Followed up on select prior audit findings to ensure that the IRS has taken the agreed upon action to 

resolve the issues.

• Determined if the IRS has taken action to analyze the available nonwork SSN data and valuate its 

usefulness to identify potentially fraudulent EITC claims.

• Determined if the IRS has taken actions to use income documents to identify discrepancies to prevent the 

issuance of EITC and ACTC claims when the income reported on the tax return is not supported by Form 

W-2, Wage and Tax Statement, on the Information Return Master File.
Appendix 2: TIGTA’s Assessment of IRS Compliance With the Improper 

Payment Reporting Requirements in Fiscal Year 2019 and IRS 

Management Response

Audit of Treasury's Compliance With the IPERA Requirements for

Fiscal Year 2019 (OIG-20-034) 37

Improper Payment Reporting Has Improved; 

However, There Have Been No Significant Reductions to the 

Billions of Dollars of Improper Payments 

Performance of This Review

This review was performed with information obtained from the Office of the Chief Financial Officer and the Office of 

Research, Applied Analytics, and Statistics located at the IRS Headquarters in Washington, D.C., and the Office of 

Return Integrity and Correspondence Services in Atlanta, Georgia, during the period October 2019 through 

February 2020. We conducted this performance audit in accordance with generally accepted government auditing 

standards. Those standards require that we plan and perform the audit to obtain sufficient, appropriate evidence to 

provide a reasonable basis for our findings and conclusions based on our audit objective. We believe that the 

evidence obtained provides a reasonable basis for our findings and conclusions based on our audit objective. 

Major contributors to the report were Russell P. Martin, Assistant Inspector General for Audit Returns Processing 

and Account Services; Diana M. Tengesdal, Director; Linna K. Hung, Audit Manager; and Brieane K. Hamaoka, Lead 

Auditor.

Validity and Reliability of Data From Computer-Based Systems 

During this review, we relied on data received from the IRS for the National Research Program on the ACTC, the 

AOTC, the PTC, and the EITC for Tax Year 2015. We also obtained extracts from the IRS’s Individual Master File, the 

Individual Return Transaction File databases for Processing Year 2019, and the National Account Profile that were 

available on TIGTA’s Data Center Warehouse. We evaluated the data by 1) performing electronic testing of required 

data elements, 2) reviewing existing information about the data and the system that produced them, and 3) 

interviewing agency officials knowledgeable about the data. We determined that the data were sufficiently reliable 

for purposes of this report.

Internal Controls Methodology

Internal controls relate to management’s plans, methods, and procedures used to meet their mission, goals, and 

objectives. Internal controls include the processes and procedures for planning, organizing, directing, and 

controlling program operations. They include the systems for measuring, reporting, and monitoring program 

performance. We determined that the following internal controls were relevant to our audit objective: controls in 

place to ensure that the IRS met the annual improper payment reporting requirements established in the IPERA, 

Executive Order 13520, and the IPERIA. We tested these controls by reviewing and analyzing relevant documents, 

data, and calculations related to the preparation of EITC improper payment estimate information. 
Appendix 2: TIGTA’s Assessment of IRS Compliance With the Improper 

Payment Reporting Requirements in Fiscal Year 2019 and IRS 

Management Response

Audit of Treasury's Compliance With the IPERA Requirements for

Fiscal Year 2019 (OIG-20-034) 38

Improper Payment Reporting Has Improved; 

However, There Have Been No Significant Reductions to the 

Billions of Dollars of Improper Payments 

Appendix II

Outcome Measure

This appendix presents detailed information on the measurable impact that our recommended corrective action will 

have on tax administration. This benefit will be incorporated into our Semiannual Report to Congress.

Type and Value of Outcome Measure:

• Revenue Protection – Potential; approximately $11 million of potentially erroneous refundable credits 

identified with nonwork SSNs (see Recommendations 2 and 3). 

Methodology Used to Measure the Reported Benefit:

We identified 2,514,301 individuals with a nonwork SSN in the National Account Profile. We matched nonwork 

SSNs to the IRS’s Individual Master File for Tax Year 2018 to identify the tax returns claiming the ACTC that used 

these nonwork SSNs as dependents. Next, we applied a similar IRS selection criteria outlined in Rule 7T to identify 

7,729 nonwork returns with $10,531,617.40 in potentially erroneous ACTC based on the number of nonwork 

dependents. Our analysis also identified 1,553 tax returns that claimed both the EITC and the ACTC with 

dependents who had nonwork SSNs totaling $2,057,001.95 of potentially erroneous ACTC. 

We included the 9,282 tax returns we identified with potentially erroneous ACTC to the 11,053 tax returns that the 

IRS identified with potentially erroneous EITC and selected and prioritized the selection of tax returns with the 

greatest amount of revenue protected in Processing Year 2019. Our analysis showed that the IRS could have 

reviewed tax returns with $3,128,918.50 more in potentially erroneous credits. 

In Processing Year 2020, the IRS plans to increase its selection from the planned 1,000 cases to 4,000 cases. This 

represents a 350 percent increase (4,000 estimated Processing Year 2020 cases/1,142 actual Processing Year 2019 

cases = 3.502626970 * 100) from Processing Year 2019. Therefore, in order to calculate the potential amount of 

revenue protected in Processing Year 2020, we multiplied the amount of revenue protected from the IRS’s 

Processing Year 2019 selections ($3,128,918.50) to estimate the potential revenue protected for Processing Year 

2020. ($3,128,918.50 x 3.502626970 = $10,959,434.33).
Appendix 2: TIGTA’s Assessment of IRS Compliance With the Improper 

Payment Reporting Requirements in Fiscal Year 2019 and IRS 

Management Response

Audit of Treasury's Compliance With the IPERA Requirements for

Fiscal Year 2019 (OIG-20-034) 39

Improper Payment Reporting Has Improved; 

However, There Have Been No Significant Reductions to the 

Billions of Dollars of Improper Payments 

Appendix III

Internal Revenue Service Programs Identified for 

Improper Payment Risk Assessments

The following IRS programs were identified by the Treasury Department for improper payment risk 

assessments for Fiscal Year 2019.

IRS Program

Type of 

Program

Level of Risk 

Identified

Total Non-Federal

Disbursements

Headquarters Disbursement Earned 

Income Credit41

Revenue High $58.6 billion

Additional Child Tax Credit Revenue High $18.6 billion

American Opportunity Credit Revenue High $3.1 billion

Premium Tax Credit Revenue High $54.1 billion

Build America Bonds Revenue Low $3.5 billion

Zone Academy Bonds Revenue Low $57.1 million

School Construction Bonds Revenue Low $680.3 million

Renewable Energy Bonds Revenue Low $46.0 million

Energy Conservation Bonds Revenue Low $40.5 million

Payment to USVI and PR for Disaster 

Tax Relief

Revenue Low $250.0 million

Private Collection Agent Program Administrative Low $14.2 million

Special Compliance Personnel 

Program Account

Administrative Low $3.3 million42

Source: IRS Office of the Chief Financial Officer. 

 

41 The EITC Program has been declared a high-priority program for improper payments by the OMB; therefore, no formal risk assessment 

is required for this revenue fund.
Appendix 2: TIGTA’s Assessment of IRS Compliance With the Improper 

Payment Reporting Requirements in Fiscal Year 2019 and IRS 

Management Response

Audit of Treasury's Compliance With the IPERA Requirements for

Fiscal Year 2019 (OIG-20-034) 40

Improper Payment Reporting Has Improved; 

However, There Have Been No Significant Reductions to the 

Billions of Dollars of Improper Payments 

Appendix IV

Management’s Response to the Draft Report
Appendix 2: TIGTA’s Assessment of IRS Compliance With the Improper 

Payment Reporting Requirements in Fiscal Year 2019 and IRS 

Management Response

Audit of Treasury's Compliance With the IPERA Requirements for

Fiscal Year 2019 (OIG-20-034) 41

Improper Payment Reporting Has Improved; 

However, There Have Been No Significant Reductions to the 

Billions of Dollars of Improper Payments 
Appendix 2: TIGTA’s Assessment of IRS Compliance With the Improper 

Payment Reporting Requirements in Fiscal Year 2019 and IRS 

Management Response

Audit of Treasury's Compliance With the IPERA Requirements for

Fiscal Year 2019 (OIG-20-034) 42

Improper Payment Reporting Has Improved; 

However, There Have Been No Significant Reductions to the 

Billions of Dollars of Improper Payments 
Appendix 2: TIGTA’s Assessment of IRS Compliance With the Improper 

Payment Reporting Requirements in Fiscal Year 2019 and IRS 

Management Response

Audit of Treasury's Compliance With the IPERA Requirements for

Fiscal Year 2019 (OIG-20-034) 43

Improper Payment Reporting Has Improved; 

However, There Have Been No Significant Reductions to the 

Billions of Dollars of Improper Payments 
Appendix 2: TIGTA’s Assessment of IRS Compliance With the Improper 

Payment Reporting Requirements in Fiscal Year 2019 and IRS 

Management Response

Audit of Treasury's Compliance With the IPERA Requirements for

Fiscal Year 2019 (OIG-20-034) 44

Improper Payment Reporting Has Improved; 

However, There Have Been No Significant Reductions to the 

Billions of Dollars of Improper Payments 
Appendix 2: TIGTA’s Assessment of IRS Compliance With the Improper 

Payment Reporting Requirements in Fiscal Year 2019 and IRS 

Management Response

Audit of Treasury's Compliance With the IPERA Requirements for

Fiscal Year 2019 (OIG-20-034) 45

Improper Payment Reporting Has Improved; 

However, There Have Been No Significant Reductions to the 

Billions of Dollars of Improper Payments 

Appendix V

Abbreviations

ACTC Additional Child Tax Credit

AOTC American Opportunity Tax Credit

APTC Advanced Premium Tax Credit

EITC Earned Income Tax Credit

IPERA Improper Payments Elimination and Recovery Act

IPERIA Improper Payments Elimination and Recovery Improvement Act

IPIA Improper Payments Information Act

IRS Internal Revenue Service

OMB Office of Management and Budget

PTC Premium Tax Credit

SSN Social Security Number

TIGTA Treasury Inspector General for Tax Administration
Audit of Treasury's Compliance With the IPERA Requirements for 

Fiscal Year 2019 (OIG-20-034) 46

Appendix 3: Treasury Programs’ Compliance With IPERA Criteria

The table below summarizes Treasury programs’ compliance with the IPERA reporting 

requirements by program.

Program

Name

Published an AFR (1)Conducted a Risk AssessmentPublished an Improper Payment Estimate (2)Published Corrective Action Plans (2)Published and Meeting Reduction Targets (2)Reported an Improper Payment Rate of Less than 10 Percent (2)

Fiscal Service - Salaries And Expenses, Fiscal 

Service Yes Yes N/A N/A N/A N/A

Fiscal Service - Reimbursements To Federal 

Reserve Banks Yes Yes N/A N/A N/A N/A

Fiscal Service - Financial Agent Services Yes Yes N/A N/A N/A N/A

Fiscal Service - Federal Reserve Bank 

Reimbursement Fund Yes Yes N/A N/A N/A N/A

Fiscal Service - Debt Collection Special Fund Yes Yes N/A N/A N/A N/A

Fiscal Service - Interest On The Public Debt Yes Yes N/A N/A N/A N/A

Fiscal Service - Restitution Of Foregone 

Interest Yes Yes N/A N/A N/A N/A

Fiscal Service - Corporation For Public 

Broadcasting Yes Yes N/A N/A N/A N/A

Fiscal Service - Payment To Legal Services 

Corp Yes Yes N/A N/A N/A N/A

Fiscal Service - Fed. Pay. Resident Tuition 

Sup Yes Yes N/A N/A N/A N/A

Fiscal Service - Judgments, Court Of Claims Yes Yes N/A N/A N/A N/A

Fiscal Service - Judgments, US Courts Yes Yes N/A N/A N/A N/A

Fiscal Service - Claims For Contract Disputes Yes Yes N/A N/A N/A N/A

Fiscal Service - Fed. Pay- Emerg. Pl & Sec Yes Yes N/A N/A N/A N/A
Appendix 3: Treasury Programs’ Compliance With IPERA Criteria

Audit of Treasury's Compliance With the IPERA Requirements for

Fiscal Year 2019 (OIG-20-034) 47

Program

Name

Published an AFR (1)Conducted a Risk AssessmentPublished an Improper Payment Estimate (2)Published Corrective Action Plans (2)Published and Meeting Reduction Targets (2)Reported an Improper Payment Rate of Less than 10 Percent (2)

Fiscal Service - Fed. Pay- DC Water & Sewer Yes Yes N/A N/A N/A N/A

Fiscal Service - Refund Money Erroneously 

Rec'd Yes Yes N/A N/A N/A N/A

Fiscal Service - Fed. Pay-School Improvement Yes Yes N/A N/A N/A N/A

Fiscal Service - Paymt To Resolution Fd Corp Yes Yes N/A N/A N/A N/A

Fiscal Service - Interest On Uninvested Fds Yes Yes N/A N/A N/A N/A

Fiscal Service - D.C. Water & Sewage Yes Yes N/A N/A N/A N/A

Fiscal Service - Travel Promotion Fund, Corp 

For Travel Promotion Yes Yes N/A N/A N/A N/A

Fiscal Service - Gulf Coast Restoration Trust 

Fund Yes Yes N/A N/A N/A N/A

Internal Revenue Service – Earned Income 

Tax Credit Yes N/A Yes Yes Yes No

Internal Revenue Service - Pay.-Child Credit 

Exceeds Liab Yes Yes Yes Yes Yes No

Internal Revenue Service - Pymt. Where 

American Opport. Credit , Recovery Act Yes Yes Yes Yes Yes No

Internal Revenue Service - Build America 

Bond Payments, Recovery Act Yes Yes N/A N/A N/A N/A

Internal Revenue Service - Pymt. To Issuer Of 

Qualified Zone Academy Bonds Yes Yes N/A N/A N/A N/A

Internal Revenue Service - Pymt. To Issuer Of 

Qualified School Const. Bonds Yes Yes N/A N/A N/A N/A

Internal Revenue Service - Pymt. To Issuer Of 

New Clean Renewable Eng Bonds Yes Yes N/A N/A N/A N/A

Internal Revenue Service - Pymt To Issuer Of 

Qualified Engy Conservation Bond Yes Yes N/A N/A N/A N/A
Appendix 3: Treasury Programs’ Compliance With IPERA Criteria

Audit of Treasury's Compliance With the IPERA Requirements for

Fiscal Year 2019 (OIG-20-034) 48

Program

Name

Published an AFR (1)Conducted a Risk AssessmentPublished an Improper Payment Estimate (2)Published Corrective Action Plans (2)Published and Meeting Reduction Targets (2)Reported an Improper Payment Rate of Less than 10 Percent (2)

Internal Revenue Service - Refundable 

Premium Assistance Tax Credit 

Yes Yes N/A N/A N/A N/A

Internal Revenue Service - Payments To USVI 

And PR For Disaster Tax Relief 

Yes Yes N/A N/A N/A N/A

Internal Revenue Service - Private Collection 

Agent Program

Yes Yes N/A N/A N/A N/A

Internal Revenue Service - Special 

Compliance Personnel Program Account 

Yes Yes N/A N/A N/A N/A

Community Development Financial 

Institutions Fund - CDFI Equity Investment 

Dividend

Yes Yes N/A N/A N/A N/A

Community Development Financial 

Institutions Fund - CDFI BGP Financing Fund 

Yes Yes N/A N/A N/A N/A

Community Development Financial 

Institutions Fund - Capital Magnet Fund 

Yes Yes N/A N/A N/A N/A

Office of D.C. Pensions - District of Columbia 

Federal Pension Fund 

Yes Yes N/A N/A N/A N/A

Office of D.C. Pensions - DC Judicial 

Retirement and Survivor’s Annuity Fund 

Yes Yes N/A N/A N/A N/A

Departmental Offices - Salaries and 

Expenses, DO 

Yes Yes N/A N/A N/A N/A

Departmental Offices - Grants for Specified 

Energy Property in Lieu of TC

Yes Yes N/A N/A N/A N/A

Departmental Offices - Social Impact 

Demonstration Projects

Yes Yes N/A N/A N/A N/A

Departmental Offices – TFI Yes Yes N/A N/A N/A N/A

Departmental Offices - Cybersecurity 

Enhancement Account

Yes Yes N/A N/A N/A N/A

Departmental Offices - Assist to FNMA & 

FHLMC

Yes Yes N/A N/A N/A N/A
Appendix 3: Treasury Programs’ Compliance With IPERA Criteria

Audit of Treasury's Compliance With the IPERA Requirements for

Fiscal Year 2019 (OIG-20-034) 49

Program

Name

Published an AFR (1)Conducted a Risk AssessmentPublished an Improper Payment Estimate (2)Published Corrective Action Plans (2)Published and Meeting Reduction Targets (2)Reported an Improper Payment Rate of Less than 10 Percent (2)

Office of International Assistance - Global 

Environment Facility, Funds Appropriated to Yes Yes N/A N/A N/A N/A

Office of International Assistance -

Contribution to the Asian Development Fund, 

Funds

Yes Yes N/A N/A N/A N/A

Office Of International Assistance - Contrib 

Int'l Develop Assoc Yes Yes N/A N/A N/A N/A

Office Of International Assistance - Contrib 

To Int'l Bk-Reconstrct Yes Yes N/A N/A N/A N/A

Office Of International Assistance - Contrib 

To African Develop Fd Yes Yes N/A N/A N/A N/A

Office Of International Assistance - Contrib 

To African Develop Bk Yes Yes N/A N/A N/A N/A

Office Of International Assistance - Contrib 

To Euro Bk For Reconst Yes Yes N/A N/A N/A N/A

Office Of International Assistance - Int'l Fund 

For Agric. Develop. Yes Yes N/A N/A N/A N/A

Office Of Financial Stability - Salaries And 

Expenses Yes Yes N/A N/A N/A N/A

Office Of Financial Stability - Home 

Affordable Modification Program Yes Yes N/A N/A N/A N/A

Office Of The Inspector General - Salaries 

And Expenses, OIG Yes Yes N/A N/A N/A N/A

Special Inspector General For Troubled Asset 

Relief Program - Office Of Special Inspector 

General TARP

Yes Yes N/A N/A N/A N/A

Departmental Offices - IA Technical 

Assistance Prog. Yes Yes N/A N/A N/A N/A

Departmental Offices - Treasury Forfeiture 

Fund Yes Yes N/A N/A N/A N/A
Appendix 3: Treasury Programs’ Compliance With IPERA Criteria

Audit of Treasury's Compliance With the IPERA Requirements for

Fiscal Year 2019 (OIG-20-034) 50

Program

Name

Published an AFR (1)Conducted a Risk AssessmentPublished an Improper Payment Estimate (2)Published Corrective Action Plans (2)Published and Meeting Reduction Targets (2)Reported an Improper Payment Rate of Less than 10 Percent (2)

Treasury Inspector General For Tax 

Administration - Treasury IG For Tax Admin. Yes Yes N/A N/A N/A N/A

Bureau Of Engraving And Printing - Bureau Of 

Engraving And Printing Fund Yes Yes N/A N/A N/A N/A

Treasury Franchise Fund - Treasury Franchise 

Fund Yes Yes N/A N/A N/A N/A

Financial Crimes Enforcement Network -

Salaries And Expenses, FinCEN Yes Yes N/A N/A N/A N/A

Office Of Financial Research - Financial 

Research Fund Yes Yes N/A N/A N/A N/A

The Mint - United States Mint Public 

Enterprise Fund Yes Yes N/A N/A N/A N/A

Office of the Comptroller of the Currency -

Assessment Funds, OCC Yes Yes N/A N/A N/A N/A

Alcohol Tobacco and Trade Bureau - Salaries 

and Expenses, TTB Yes Yes N/A N/A N/A N/A

Alcohol Tobacco and Trade Bureau - Internal 

Revenue, Collections for Puerto Rico Yes Yes N/A N/A N/A N/A

(1) For the Published an AFR criteria which applies at an agency level, if the agency is

compliant then the programs are all compliant.

(2) The requirements apply only to the programs that are susceptible to significant

improper payments.
Audit of Treasury's Compliance With the IPERA Requirements for 

Fiscal Year 2019 (OIG-20-034) 51

Appendix 4: Treasury Management Response
Audit of Treasury's Compliance With the IPERA Requirements for 

Fiscal Year 2019 (OIG-20-034) 52

Appendix 5: Treasury OIG Major Contributors to This Report

Catherine Yi, Audit Manager

R. Nikki Akinyeye, Auditor-in-Charge

Robert Hong, Auditor-in-Charge

Rebecca Pikas, Auditor 

Kevin Guishard, Referencer
Audit of Treasury's Compliance With the IPERA Requirements for 

Fiscal Year 2019 (OIG-20-034) 53

Appendix 6: Report Distribution

Department of the Treasury

Secretary of the Treasury

Deputy Secretary

Assistant Secretary for Management 

Deputy Chief Financial Officer

Director, Risk and Control Group

Office of Management and Budget

Controller, Office of Federal Financial Management 

OIG Budget Examiner 

U.S. Senate 

Chairman and Ranking Member 

Committee on Homeland Security and Governmental Affairs 

U.S. House of Representatives 

Chairman and Ranking Member

Committee on Oversight and Reform

U.S. Government Accountability Office

Comptroller General of the United States
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