Treasury Inspector General for Tax 

Administration 

Mission Statement 

To provide audit and investigative services that promote economy, efficiency, and 

integrity in the administration of the internal revenue laws. 

Program Summary by Appropriations Account Dollars in Thousands 

Appropriation FY 2006 FY 2007 FY 2007 FY 2008

Salaries and Expenses Enacted

President's 

Budget CR-rate Request

$from 

CR-rate 

% from

CR-rate

Audit $49,761 $51,521 $49,686 $52,959 $3,273 6.59%

Investigations 82,192 84,948 82,267 87,594 5,327 6.48%

Total Appropriated Resources $131,953 $136,469 $131,953 $140,553 $8,600 6.52%

FY 2008 Priorities 

• Adapting to the Internal Revenue Service’s (IRS) continuously evolving 

operations and mitigating intensified risks associated with modernization, 

outsourcing, and enforcement efforts. 

• Responding to threats and attacks against IRS personnel, property, and sensitive 

information. 

• Improving the integrity of IRS operations by detecting and deterring fraud, waste, 

abuse or misconduct by IRS employees. 

• Conducting comprehensive audits that include recommendations for cutting costs 

and enhancing IRS’ service to taxpayers. 

• Informing Congress and the Secretary of the Treasury of problems and progress 

made to resolve them. 
Table of Contents 

Section 1 – Purpose ........................................................................................................... 2

1A – Description of Bureau Vision and Priorities.......................................................... 2 

1B – Program History and Future Outlook..................................................................... 2 

Section 2 – Budget Adjustments and Appropriation Language................................... 6

2.1 – Budget Adjustments Table..................................................................................... 6 

2A – Budget Increases and Decreases Description......................................................... 6 

2.2 – Operating Levels Table.......................................................................................... 7 

2B – Appropriation Language ........................................................................................ 8 

2C – Legislative Proposals.............................................................................................. 8 

Section 3 – Budget and Performance Plan ..................................................................... 9

3.1 – Appropriation Detail Table.................................................................................... 9 

3A – Audit....................................................................................................................... 9 

3.2.1 – Audit Budget and Performance Plan................................................................. 11 

3B – Investigations ....................................................................................................... 12 

3.2.2 – Investigations Budget and Performance Plan ................................................... 13 

Section 4 – Supporting Materials.................................................................................. 14

4.1 – Human Resources Table ...................................................................................... 14 

4A – Human Capital Strategy Description ................................................................... 14 

4.2 – Summary of IT Resources Table ......................................................................... 16 

4B – Information Technology Strategy ........................................................................ 17 

4.3 – PART Evaluation Table....................................................................................... 19 

TIGTA - 1 
Section 1 – Purpose

1A – Description of Bureau Vision and Priorities 

The Treasury Inspector General for Tax Administration (TIGTA) was created to provide 

independent oversight of the Internal Revenue Service (IRS). TIGTA’s investigations

and audits protect and promote the fair administration of the American tax system. Its 

responsibilities include ensuring that the IRS is accountable for more than $2 trillion in 

tax revenue received each year. TIGTA’s investigations: protect the IRS against 

breaches of integrity by IRS employees, contractors, and other tax professionals; provide 

for employee and infrastructure security; and protect the IRS from external attempts to 

threaten or corrupt the administration of the tax laws. TIGTA conducts audits that advise 

Congress, the Secretary of the Treasury, and IRS management of high risk issues, 

problems, and deficiencies related to the administration of IRS programs and operations. 

TIGTA’s audit recommendations aim to improve IRS systems and operations, while 

maintaining fair and equitable treatment of taxpayers. 

TIGTA’s investigative and audit priorities include: 

• Adapting to the IRS’ continuously evolving operations and mitigating 

intensified risks associated with modernization, outsourcing, and enforcement 

efforts;

• Responding to threats and attacks from individuals, anti-government groups, 

and terrorism against IRS personnel, property, and sensitive information; 

• Improving the integrity of IRS operations by detecting and deterring fraud, 

waste, abuse, or misconduct by IRS employees; 

• Identifying inefficiencies and high-risk weaknesses in tax administration 

through comprehensive audits that ensure the protection of taxpayer rights, 

generate cost savings, protect tax revenue, and enhance IRS’ services to 

taxpayers; and 

• Advising Congress and the Secretary of the Treasury of high-risk problems 

and progress made to resolve them. 

The total resources required to support TIGTA activities for FY 2008 are $141,753,000 

including $140,553,000 from direct appropriations and $1,200,000 from offsetting 

collections and reimbursable agreements. 

1B – Program History and Future Outlook 

TIGTA’s investigations and audits are integral to the efficient and equitable application 

of the nation’s tax laws and thereby ensure that this critical source of federal revenue is 

prudently and fairly administered and secure from internal and external threats. 

Oversight activities are explicitly designed to identify high-risk systemic inefficiencies in 

TIGTA - 2 
IRS operations and investigate exploited weaknesses in tax administration. Previously a 

longstanding enforcement office within the IRS, TIGTA was established as an 

independent office in January 1999 in accordance with the Internal Revenue Service 

Restructuring and Reform Act of 1998 (RRA 98). It was mandated to provide 

independent audit and investigative services necessary to improve the quality and 

credibility of IRS oversight. 

In FY 2006, TIGTA’s accomplishments included: 

Advising Congress: TIGTA issued 171 audit reports, and also provided 40 testimonies, 

briefings, and responses to Congress and its professional staff regarding investigative and 

audit activities. Through this direct communication, TIGTA aims to address the interest 

of congressional committees on critical issues and eliminate unsubstantiated concerns 

that may needlessly impede IRS operations. Accordingly, TIGTA recently established an 

Inspection and Evaluation Group to provide additional flexibilities to address evolving 

topics and address significant issues that require a quick turnaround. This group provides 

rapid responses to requests from Congress and other stakeholders for reviews and 

guidance regarding tax administration programs and activities. 

Hurricanes Katrina and Rita Review: TIGTA participated in the Inspectors General’s 

coordinated oversight of the federal government’s multi-billion dollar hurricane relief 

effort. TIGTA initiated reviews intended to assess IRS preparation for processing tax 

returns of impacted taxpayers, ensure an adequate approval process for new tax-exempt 

disaster relief organizations, protect taxpayer data and evaluate business resumption 

plans. TIGTA’s investigations targeted areas susceptible to abuse or misuse of relief 

mechanisms and exploitation of victims. TIGTA’s involvement not only verified that tax 

relief was appropriately applied to victims in most cases, but also ensured that 

weaknesses in the IRS’ disaster recovery and execution operations were identified and 

resolved for future years. 

Implementing New Statutory Requirement Regarding Taxpayer Assistance Services: In 

May of 2005, the IRS announced plans to close 68 Taxpayer Assistance Centers (TACs) 

in order to generate an estimated $45 million to $55 million in cost savings. 

Congressional concerns resulted in new legislation prohibiting the IRS from using 

FY 2006 appropriated funds to reduce any taxpayer service function or program until 

TIGTA assessed the impact on taxpayer service and compliance. TIGTA adjusted 

priorities to meet this unfunded congressional mandate in a timely and effective manner. 

This review ensured that taxpayer services were not inappropriately reduced in vital 

areas. 

Overall Audit Outcomes: As of September 30, 2006, a total of 171 audit reports were 

issued, identifying approximately $1.8 billion in potential costs savings and protected 

revenue. 

 

Overall Investigative Outcomes: As of September 30, 2006, 3,412 investigations were 

closed and achieved 79 percent positive results (e.g., referrals for criminal and civil 

TIGTA - 3 
prosecution and administrative adjudications), including 1,485 cases of employee 

misconduct referred to the IRS for administrative action and 268 cases accepted for 

prosecution. 

TIGTA has achieved its performance and quality expectations in part by implementing 

several efficiency and cost-cutting initiatives. Specifically, TIGTA has: 

• Implemented and expanded telecommuting and hoteling1 programs that have 

enhanced employee productivity and reduced TIGTA’s rent costs; 

• Closed offices and reduced managerial and support staff positions; 

• Outsourced certain personnel, finance, and accounting services to the Bureau of 

Public Debt’s (BPD) Administrative Resource Center; and, 

• Maximized efficient use of resources by ensuring that TIGTA emphasizes core 

mission-related work. 

 

FY 2008 Priorities: 

Ensuring the Privacy and Security of Taxpayer Information: Millions of taxpayers 

entrust the IRS with sensitive financial and personal data, which is processed and stored 

by IRS computer systems. This trust is the cornerstone of the nation’s voluntary tax 

compliance system. The risk of confidential data being compromised has intensified over 

the last few years. The Department of Commerce estimates that more than 50 million 

identities were compromised in 2005. TIGTA plays a vital role in ensuring the privacy 

and security of taxpayer information from internal and external threats. 

 

The Taxpayer Browsing Protection Act of 19972

 designates willful unauthorized access 

or inspection of any taxpayer records a criminal offense. An integral part of TIGTA’s 

employee integrity program involves investigation of unauthorized access (UNAX) of 

confidential taxpayer records by IRS employees, other federal employees, contractors, 

and state government employees. From FY 2001 to FY 2006, TIGTA has initiated 2,878 

UNAX investigations, resulting in 1,375 adverse personnel actions taken by the IRS, and 

86 criminal prosecutions, for UNAX violations. 

The IRS is also a prime target for attacks on its computer systems by anti-government 

groups, international and domestic terrorists, and disgruntled employees. In addition to 

identity theft concerns, computer attacks can cause revenue loss and impede productivity 

by disrupting computer operations. In compliance with the Federal Information Security 

Management Act (FISMA)3

, TIGTA conducts an annual evaluation of the IRS 

information security program and practices. During the FY 2005 evaluation, TIGTA 

 

1

 Hoteling is a flexible work arrangement whereby an employee already participating in the telecommuting 

program on a full or expanded basis (generally over 30 hours per week) does not have a permanently 

assigned personal workspace but may reserve office space on an as-needed basis. 2 Pub. L. No. 105-35, 111 Stat. 1103.

3 FISMA is part of the E Government Act of 2002, Pub. L. No. 107-347, Title III, Section 301, 2002.

TIGTA - 4 
found that the IRS was paying insufficient attention to the security of all sensitive 

systems and contractor activities. TIGTA noted deficiencies in continuous monitoring, 

tracking corrective actions, training employees with key security responsibilities, and 

contractor oversight. An additional TIGTA review exposed inconsistent maintenance of 

security settings that could be exploited either to take control of the computer or render it 

unusable. 

Private Debt Collection: The IRS’ delinquent tax debt collection effort will utilize 

Private Collection Agencies (PCAs). Overseeing PCAs is a top priority for TIGTA in the 

coming fiscal years. TIGTA’s previous experience with detecting lockbox thefts and 

insufficient contractor oversight provide an investigative foundation for minimizing the 

incidence of similar violations in this area. TIGTA has coordinated with the IRS 

throughout the initial phase of implementation by addressing concerns regarding security 

and protection of taxpayer rights and privacy, and developing integrity and fraud 

awareness training for contract employees. The IRS placed 11,564 delinquent tax 

accounts with a value of $65 million with three approved PCAs in September 2006, and 

will place an additional 107,000 accounts with a value of approximately $656 million in 

2007. Full implementation, involving 10 to 12 contractors, is scheduled to begin in 

January 2008. 

TIGTA reviews will assess program controls and cost effectiveness, and evaluate whether 

the IRS achieves its revenue projections. Additional investigative responsibilities to deter 

fraudulent behavior will include conducting remittance and integrity tests, providing 

integrity awareness briefings to contract employees, and investigating contract 

irregularities. TIGTA’s involvement will validate that the IRS effectively exercises its 

new authority to use PCAs, while ensuring that taxpayers’ due process and privacy rights 

are protected. 

Procurement: Contract expenditures constitute approximately 20 percent of the IRS 

annual budget. TIGTA has identified erroneous and improper payments as one of the top 

management challenges the IRS faces. Currently, TIGTA coordinates with the Defense 

Contract Audit Agency to perform some contract audits and conducts several 

independent reviews of contractor invoicing to ensure that the IRS is properly and 

accurately paying for goods and services in accordance with contract terms and 

conditions. TIGTA also conducts reactive and proactive investigations to identify and 

deter criminal activity on the part of contractors. From FY 2002 through FY 2006, 

TIGTA initiated 86 contract fraud investigations, resulting in five prosecutions and the 

recovery of more than $20 million. TIGTA will continue to review a percentage of the 

amounts paid by IRS to private contractors. 

TIGTA - 5 
Section 2 – Budget Adjustments and Appropriation Language 

2.1 – Budget Adjustments Table 

Dollars in Thousands

Appropriation: TIGTA, Salaries & Expenses FTE Amount

FY 2006 Appropriation (P.L. 109-115) 856 $133,286

Rescission (P.L. 109-148) (6) (1,333)

FY 2006 Enacted 850 $131,953

FY 2007 President's Budget 850 $136,469

CR-rate Adjustment (33) (4,516)

FY 2007 CR-rate 817 $131,953

Changes to Base: 

Technical Adjustment to FY 2007 Base due to CR:

Base Adjustment 18 3,726

Maintaining Current Levels (MCLs):

Non-Pay Inflation Adjustment 672

Pay Annualization 579

Pay Inflation Adjustment 3,623

Total FY 2008 Base 835 $140,553

Total FY 2008 Request 835 $140,553

2A – Budget Increases and Decreases Description 

Adjustments ....................................................................................-$4,516,000 / -33 FTE 

CR-rate Adjustment -$4,516,000 / -33 FTE Adjustment from the FY 2007 President's 

Budget to reach the FY 2007 Continuing Resolution annualized rate (CR-rate). 

Technical Adjustment to FY 2007 Base due to CR ...................+$3,726,000 / +18 FTE 

Base Adjustment +$3,726,000 / +18 FTE Technical adjustment to FY 2007 Base due to 

CR. 

Maintaining Current Levels (MCLs) ...........................................+$4,874,000 / +0 FTE 

Non-Pay Inflation Adjustment +$672,000 / +0 FTE Funds are requested for non-labor 

inflation and cost increases, such as contracts, travel, supplies, equipment, and GSA rent. 

Pay Annualization +$579,000 / +0 FTE Annualization of January 2007 pay increase to 

provide full year funding for that pay increase during FY 2008. 

Pay Inflation Adjustment +$3,623,000 / +0 FTE Pay adjustment for January 2008 pay 

increase and related increased benefit costs. 

TIGTA - 6 
2.2 – Operating Levels Table 

Dollars in Thousands

Appropriation Title: TIGTA Salaries & Expenses FY 2006

Enacted

FY 2007

President's

Budget

CR-rate 

Adjustment

FY 2007 CRrate

Proposed

Reprogrammings

FY 2007 

Proposed

Operating

Level

FY 2008 

Requested

Level

FTE 850 850 (33) 817 - 817 835

Object Classification:

11.1 Full-Time Permanent Positions........................ $72,245 $74,363 ($3,411) $70,952 $70,952 $75,921

11.1 Other than Full-Time Permanent Positions...... 524 555 555 555 576

11.5 Other Personnel Compensation....................... 8,590 8,809 8,809 8,809 9,398

11.8 Special Personal Services Payments.............. 0 0 0 0

11.9 Personnel Compensation (Total)..................... 81,359 83,727 ($3,411) 80,316 80,316 85,895

12.0 Personnel Benefits........................................... 23,645 24,708 ($1,105) 23,603 23,603 25,226

13.0 Benefits to Former Personnel.......................... 0 0 0 0

21.0 Travel.............................................................. 4,249 4,446 4,446 4,446 4,552

22.0 Transportation of Things.................................. 13 24 24 24 24

23.1 Rental Payments to GSA................................. 9,437 7,983 7,983 7,983 8,024

23.2 Rent Payments to Others................................ 246 275 275 275 282

23.3 Communications, Utilities, & Misc.................... 2,167 1,960 1,960 1,960 2,158

24.0 Printing and Reproduction............................... 9 8 8 8 8

25.1 Advisory & Assistance Services....................... 1,105 1,125 1,125 1,125 1,152

25.2 Other Services................................................. 862 899 899 899 921

25.3 Purchase of Goods/Serv. from Govt. Accts...... 3,158 5,668 5,668 5,668 6,530

25.4 Operation & Maintenance of Facilities............. 219 398 398 398 407

25.5 Research & Development Contracts................ 0 0 0 0

25.6 Medical Care................................................... 0 0 0 0 0

25.7 O

0

peration & Maintenance of Equipment.......... 1,201 1,223 1,223 1,223 1,252

25.8 Subsistence & Support of Persons.................. 0 0 0 0 0

26.0 Supplies and Materials.................................... 1,157 1,143 1,143 1,143 1,170

31.0 Equipment....................................................... 3,025 2,685 2,685 2,685 2,750

42.0 Insurance Claims & Indemn............................. 50 146 146 146 150

91.0 Confidential Expenditures................................ 51 51 51 51 52

Total Budget Authority....................................... $131,953 $136,469 ($4,516) $131,953 $0 $131,953 $140,553

Budget Activities:

Audit............................................................... $49,761 $51,521 ($1,835) $49,686 $49,686 $52,959

Investigations...................................................... 82,192 84,948 ($2,681) 82,267 82,267 87,594

Total Budget Authority....................................... $131,953 $136,469 ($4,516) $131,953 $0 $131,953 $140,553

TIGTA - 7 
2B – Appropriation Language 

Appropriations Language Explanation of Changes

DEPARTMENT OF THE TREASURY 

TREASURY INSPECTOR GENERAL FOR TAX 

ADMINISTRATION 

Federal Funds 

SALARIES AND EXPENSES: 

 For necessary expenses of the Treasury Inspector General 

for Tax Administration in carrying out the Inspector 

General Act of 1978, as amended, including purchase (not 

to exceed 150 for replacement only for police-type use)

and hire of passenger motor vehicles (31U.S.C. 1343(b));

services authorized by 5 U.S.C. 3109, at such rates as may 

be determined by the Inspector General for Tax 

Administration; $140,533,000, of which not to exceed 

$6,000,000 for official travel expenses; of which not to 

exceed $500,000 for unforeseen emergencies of a 

confidential nature, to be allocated and expended under 

the direction of the Inspector General for Tax 

Administration; and of which not to exceed $1,500 shall be 

available for official reception and representation 

expenses. 

2C – Legislative Proposals 

TIGTA has no legislative proposals for FY 2008. 

TIGTA - 8 
Section 3 – Budget and Performance Plan

3.1 – Appropriation Detail Table 

Dollars in Thousands

FTE AMOUNT FTE AMOUNT FTE AMOUNT FTE AMOUNT FTE AMOUNT FTE AMOUNT

New Appropriated Resources:

Audit 355 $49,761 346 $48,608 355 $51,521 341 $49,686 349 $52,959 2.35% 6.59%

Investigations 495 82,192 489 82,994 495 $84,948 476 $82,267 486 87,594 2.10% 6.48%

Subtotal New Appropriated Resources 850 $131,953 835 $131,602 850 $136,469 817 $131,953 835 $140,553 2.20% 6.52%

Other Resources:

Offsetting Collections - Reimbursable 3 $1,200 3 $1,625 3 $1,200 3 $1,200 3 $1,200 0.00% 0.00%

Subtotal Other Resources 3 $1,200 3 $1,625 3 $1,200 3 $1,200 3 $1,200 0.00% 0.00%

Total Resources Available for Obligation 853 $133,153 838 $133,227 853 $137,669 820 $133,153 838 $141,753 2.20% 6.46%

1/ FY 2006 Obligations of FY 2006 Enacted amounts

Enacted Obligations President's Budget to FY 2008 1 CR-rate Request

FY 2007

Resources Available for Obligation

FY 2006 FY 2006 FY 2007 FY 2007 FY 2008

% Change

3A – Audit ($52,959,000 from direct appropriations and $725,000 from reimbursable 

programs): The Office of Audit’s (OA) mission is to provide comprehensive coverage 

and oversight of all aspects of the IRS’ daily operations. Audits not only focus on the

economy and efficiency of IRS functions but also ensure that taxpayers’ rights are

protected and the taxpaying public is adequately served. Overall, as of 

September 30, 2006, audit reports produced potential financial accomplishments of 

$1.8 billion, and potentially impacted approximately 1.8 million taxpayer accounts in 

areas such as taxpayer burden, rights, and entitlements. 

OA develops an annual audit plan that communicates oversight priorities to Congress, the 

Department of the Treasury, and the IRS. Emphasis is placed on mandatory coverage 

imposed by RRA 98 and other statutory authorities, as well as issues impacting computer 

security, taxpayer rights and privacy, and financial-related audits. OA’s work focuses on 

IRS’ major management challenges, IRS’ progress in achieving its strategic goals, 

eliminating IRS’ systemic weaknesses, and IRS’ response to the President’s Management 

Agenda initiatives. By focusing on these critical areas, OA ensures that TIGTA audits 

identify and recommend improvements in IRS programs, including: 

Tax Compliance: In February 2006, the IRS estimated the gross tax gap, defined as the 

difference between the estimated amount taxpayers owe and the amount they voluntarily 

and timely pay, to be $345 billion for Tax Year 2001. TIGTA evaluated the reliability of 

the IRS-developed tax gap figures and concluded that the IRS lacked sufficient 

information to completely and accurately assess the tax gap and voluntary compliance 

rate. A reliable estimate of the overall tax gap and its components is critical to tax 

administration and tax policy decision makers. Continued TIGTA oversight of tax gap 

issues, including data reliability, enforcement laws, and taxpayer assistance, is necessary 

to ensure that the IRS enhances voluntary compliance by balancing taxpayer services and 

enforcement without jeopardizing taxpayer rights. 

An OA review of the IRS penalty-setting process for information returns related to 

foreign operations and transactions revealed deficiencies in the assessment of late-filing 

penalties. The audit identified missed opportunities for promoting better compliance with 

TIGTA - 9 
filing requirements by not assessing late-filing penalties more frequently. OA estimated 

that the IRS could generate approximately $60.3 million per year, or $301 million over 

five years, in additional revenue by using automation to close the gap between penalties 

assessed and the number of penalties that should be assessed when forms are filed late. 

OA recommended that the IRS convene a study group to develop a business case to 

decide whether or not to pursue automating the penalty-setting process. IRS management 

agreed with these recommendations and indicated that initial steps to assess automation 

will be implemented.

Quality of Taxpayer Services: The IRS has experienced a steady growth in electronic 

filing (e-filing) of income tax returns over the past several years. However, OA has 

expressed concern regarding the significant slowing of the growth of returns e-filed in 

2006. A slower growth rate extends the time period needed to achieve the goal of 

80 percent e-filed returns and delays the associated cost savings. A significant 

contributing factor was a 22 percent decline from the previous year in the number of 

taxpayers utilizing IRS free online filing options, under the Free File Program. OA raised 

concerns regarding the quality and accessibility of free e-filing services offered by the 

IRS.

The Subcommittee on Oversight of the House Committee on Ways and Means requested 

that OA review recent amendments made to the IRS’ Free File Alliance Agreement in 

order to evaluate the differences from the previous agreement and to assess the impact on 

electronic filing and taxpayer services. OA’s review showed that the amended agreement 

substantially reduced the number of taxpayers eligible to use the program and that the 

Free File services are often inaccessible, time-consuming, and difficult to use for eligible 

taxpayers. OA's recommendations will help to ensure that the free filing options 

provided by the IRS contribute to a higher growth rate of e-filing.

Minimizing Erroneous and Improper Payments: An OA review identified specific 

reforms to improve IRS processes designed to detect and deter multiple uses of taxpayer 

identification numbers. When a taxpayer identification number is utilized multiple times 

during a tax year, it creates the opportunity for taxpayers to receive tax benefits to which 

they are not entitled. The audit found that the IRS could improve its processes by 

capitalizing on existing paper return processes; expanding current programs to educate 

taxpayers and tax preparers on correct use of identification numbers; and enhancing the 

reliability of the Duplicate Taxpayer Identification Number Use database. OA estimated 

that the IRS could protect over $153 million in tax revenue over a five-year period by 

leading a collaborative effort to identify a workable solution to these multiple use cases. 

IRS management agreed with the recommendations and is taking corrective action. 

OA faces the challenge of addressing increasing requests from Congress and other IRS 

stakeholders in a timely and efficient manner. In FY 2006, OA reallocated resources in 

order to perform congressionally requested audits and comply with new statutory 

provisions. The importance of TIGTA’s mission and the effectiveness of its oversight are 

demonstrated by the increased number of requests for audits TIGTA receives. TIGTA 

TIGTA - 10 
expects the trend of increased congressional interest and requests for action to continue 

into future years. 

Other Resources: TIGTA receives $725,000 in offsetting collections and 

reimbursements to support activity related to Defense Contract Audit Agency (DCAA) 

audits conducted on behalf of the IRS and other activity conducted on behalf of the 

Department of the Treasury. 

3.2.1 – Audit Budget and Performance Plan 

Dollars in Thousands 

Audit Budget Activity Includes Strategic Objective M5A

FY 2004 FY 2005 FY 2006 FY 2007 FY 2008

Resource Level Enacted Enacted Enacted President's 

Budget

Request

Financial Resources 

 Appropriated Resources $48,387 $48,392 $49,761 $51,521 $52,959

 Other Resources 50 1,092 725 725 725

Total Operating Level $48,437 $49,484 $50,486 $52,246 $53,684

Human Resources 

 Appropriated FTE 369 357 355 355 349

 Other FTE 0 0 0 0 0

Total FTE (direct and reimbursable) 369 357 355 355 349

Audit Budget Activity Includes Strategic Objective M5A

Measure FY 2004 FY 2005 FY 2006 FY 2007 FY 2008

Target Baseline TBD

Actual 

Percentage of Audit Products Delivered When 

Promised to Stakeholders 

Met 

Target Baseline TBD

Actual 

Percentage of Recommendations Made That 

Have Been Implemented 

Met 

Key: Oe - Outcome Measure, E - Efficiency Measure, Ot - Output/Workload Measure, and M - Management/Cust. 

Satisfaction 

Description of Performance: TIGTA is proposing two new measures. The first one 

determines whether TIGTA audit products are timely. The likelihood that TIGTA 

products will be used is enhanced if they are delivered when needed to support 

Congressional and Internal Revenue Service (IRS) decision making. 

The Office of Audit makes recommendations designed to improve administration of the 

Federal tax system. For there to be a resulting financial or non-financial benefit, the 

Internal Revenue Service (IRS) must implement these recommendations. The second 

measure assesses TIGTA’s effect on improving the IRS’ accountability, operations, and 

services. TIGTA tracks the percentage of recommendations that were made four years 

ago which have been implemented, rather than tracking the recommendations when they 

are made initially, because the IRS needs time to act on recommendations. 

TIGTA - 11 
3B – Investigations ($87,594,000 from direct appropriations and $475,000 from 

reimbursable programs): TIGTA’s mission is more extensive than other IGs in that it has 

the statutory responsibility to protect the integrity of tax administration and the ability of 

the IRS to collect revenue for the federal government. To accomplish this, TIGTA’s 

Office of Investigations (OI) investigates allegations of criminal violations and 

administrative misconduct by IRS employees, protects the IRS against external attempts 

to corrupt tax administration, and ensures IRS employee safety and IRS data and 

infrastructure security. 

Employee Integrity: The IRS’ ability to deliver taxpayer service, enforce tax laws 

effectively, and collect the proper amount of taxes can be undermined by employee 

misconduct. TIGTA’s investigations of employee misconduct allegations include those 

involving extortion, theft, taxpayer abuses, false statements, financial fraud, and 

unauthorized access (UNAX) of confidential taxpayer records by IRS employees. 

External Attempts to Corrupt Tax Administration: External attempts to corrupt tax 

administration impede the IRS’ ability to collect revenue. TIGTA’s investigations in this 

area include bribes offered by taxpayers to compromise IRS employees, the use of 

fraudulent IRS documentation to commit crimes, taxpayer abuse by tax practitioners, 

impersonation of IRS employees, and the corruption of IRS programs through 

procurement fraud. 

Particularly important to TIGTA are phishing scams that falsely depict e-mails from the 

IRS.4

 Such schemes attempt to retrieve a user’s Social Security Number and banking 

information by replicating an official IRS seal and/or requesting information required for 

depositing tax refunds. Since November 2005, TIGTA and the IRS have received 

17,921 (as of December 31, 2006) complaints or inquiries regarding these internet 

schemes, identifying approximately 203 separate ones that were traced to 28 different 

countries. Oversight in this area is necessary to ensure that misuse of the IRS name, 

impersonation of an IRS employee, and identity theft incidents are resolved properly. 

Employee and Infrastructure Security: In 1998, The President of the United States 

designated IRS operations as a critical infrastructure.5

 TIGTA meets the challenge of 

maintaining IRS employee and infrastructure security by investigating incidents of 

sabotage and threats or assaults made against IRS employees, facilities, and 

infrastructure. Potential threats to tax administration are identified through TIGTA’s 

Criminal Intelligence Program, which utilizes law enforcement and intelligence resources 

to proactively detect suspected individuals and groups. 

Congressional concern regarding the magnitude of uncollected revenue has prompted the 

IRS to intensify enforcement activities. If effective, heightened enforcement is likely to 

cause a rise in external threats to IRS employees and infrastructure. Both TIGTA’s 

proactive and reactive investigative initiatives are critical in mitigating such future risks. 

OI currently participates on the FBI Joint Terrorism Task Forces (JTTF) and conducts 

 

4

 Phishing involves sending e-mails to users falsely claiming to be established, legitimate enterprises in

order to solicit private information for the purpose of identity theft and other crimes. 5 Presidential Decision Directive NSC-63.

TIGTA - 12 
criminal intelligence gathering to uncover and track external threats to tax administration 

from individuals, anti-government groups, and terrorists. In FY 2006, OI initiated 275 

investigations of assaults and/or threats made against IRS employees and 26 

investigations of assaults and/or threats made against IRS facilities. 

Investigative work in these three core areas is imperative for protecting the integrity of 

tax administration. The results of this work help ensure that the public has confidence in 

its dealings with the IRS, and thereby promote voluntary compliance with federal tax 

laws. 

Other Resources: TIGTA receives $475,000 in offsetting collections and 

reimbursements to support activity conducted on behalf of the Department of the 

Treasury. 

3.2.2 – Investigations Budget and Performance Plan 

Dollars in Thousands 

Investigations Budget Activity Includes Strategic Objective M5A

FY 2004 FY 2005 FY 2006 FY 2007 FY 2008

Resource Level Enacted Enacted Enacted President's 

Budget

Request

Financial Resources 

 Appropriated Resources $78,932 $79,701 $82,192 $84,948 $87,594

 Other Resources 3,023 1,784 475 475 475

Total Operating Level $81,955 $81,485 $82,667 $85,423 $88,069

Human Resources 

 Appropriated FTE 516 495 495 495 486

 Other FTE 15 9 3 3 3

Total FTE (direct and reimbursable) 531 504 498 498 489

Investigations Budget Activity Includes Strategic Objective M5A

Measure FY 2004 FY 2005 FY 2006 FY 2007 FY 2008

Target Baseline 67% 70% 73% 73%

Actual 64% 82% 79%

Percentage of positive results from investigative 

activities (%) (Oe) 

Met Yes Yes Yes

Key: Oe - Outcome Measure, E - Efficiency Measure, Ot - Output/Workload Measure, and M - Management/Cust. 

Satisfaction 

Description of Performance: Examples of the types of cases in the positive results 

category include discovery of: bribes offered by taxpayers to compromise IRS 

employees; manipulation of IRS systems and programs through the use of bogus liens 

and IRS financial reporting instruments; impersonation of IRS officials; and, 

unauthorized access to confidential taxpayer information by IRS employees. As of 

September 30, 2006, actual performance has exceeded expectations (actual performance 

was 79 percent, while the target was 70 percent). These results are indicative of 

TIGTA’s continuous focus on quality results. 

For detailed information about each performance measure, including definition, 

verification and validation, please go to: 

http://www.treas.gov/offices/management/dcfo/accountability-reports/2006-

par/Part_IV_Appendices.pdf

TIGTA - 13 
Section 4 – Supporting Materials 

4.1 – Human Resources Table 

Changes in Full Time Equivalents

Direct FTE FY 2006 FY 2007 FY 2008

Base: Year-end Actual from Prior Year 855 835 817

Increases:

Reason #1: Technical adjustment to FY 2007

base due to CR 18

Subtotal, Increases 0 0 18

Decreases:

Reason #1: Partial hiring freeze -20

Reason #2: CR-rate Adjustment -18

Subtotal, Decreases -20 -18 0

Year-end Actual/Estimated FTEs 835 817 835

Net Change from prior year SOY to budget year EOY 0

4A – Human Capital Strategy Description 

TIGTA’s human capital strategy is aligned with the goals, vision, and priorities of the 

agency as a whole. One of the major strategic goals of the bureau is to “be an 

organization that values its people.” The objective associated with this goal is to “ensure 

a high-quality, diverse, and motivated workforce with the knowledge, skills, and abilities 

needed to produce quality products in an efficient and effective manner.” Also, TIGTA 

has revamped its performance management program for all employees (including 

managers) to differentiate levels of performance, to incorporate TIGTA’s strategic goals 

and objectives, and to hold employees accountable for performance. 

TIGTA’s Human Capital group strategically lays out a multi-year approach for 

addressing its critical human capital issues. This approach supports TIGTA’s mission by 

empowering TIGTA’s management to fulfill the agency’s legislative mandates and 

business goals, and by providing technical expertise, resource management, and strategic 

solutions regarding human capital policy, Bureau of Public Debt (BPD) contract

TIGTA - 14 
oversight, performance management, personnel security, personnel development, and 

work/life issues. 

TIGTA must deal with some critical staffing challenges (both now and in the future), in 

terms of having the right number of people with the right skills to accomplish its mission. 

Because of the increasingly modernized and computerized IRS operating systems and 

environment, the most critical gaps TIGTA faces are the 0511 Auditor and 1811 Criminal 

Investigator occupations. These gaps are the result of a combination of: (1) the current 

employee population lacking specific, needed skills to audit and/or investigate highly 

complicated computerized systems and/or operating environments; and (2) TIGTA’s 

limited past successes in recruiting specifically for the 0511 Auditor (with specialized 

computer skills) occupation in the Washington, DC area, where most of this type of work 

is located. 

Per HR Connect data, as of December 18, 2006, 35 percent of TIGTA’s current staff is 

retirement eligible through FY 2010, which threatens TIGTA’s ability to effectively 

fulfill its core mission. 

To address the skills gap specifically in the 0511 Auditor occupation, TIGTA classified 

and recruited 2210 Information Technology Specialists with experience in auditing 

computerized operating environments. This proved somewhat successful, as TIGTA was 

able to hire a small group of employees under this occupational series. In addition, 

TIGTA expanded the post of duty locations for employees needed in this occupational 

series to include cities outside the Washington, DC, area. 

The TIGTA workforce is not being supplemented by on-site contractors. However, the 

majority of TIGTA’s human resources, accounting, travel, and acquisitions workload has 

been outsourced to BPD’s Administrative Resource Center. 

TIGTA - 15 
4.2 – Summary of IT Resources Table 

Dollars in Millions

Information Technology Investments(in $ Millions) FY 2006 FY 2007 FY 2008Major IT Investments

Budget

Activity/Funding 

Source

Identify the Program

that the System is 

Aligned to

Operating 

Plan Obligations

Operating 

Plan

President's 

Budget Request

-

Subtotal, Major IT Investments $0.0 $0.0 $0.0 $0.0 $0.0Performance and Results Information System (PARIS)

TIGTA: Investigations Activity $1.0 $1.0 $1.0

PARIS Property Module (PPM) TIGTA: Investigations Activity 0.5 0.5 0.5Non-Major IT Investments $0.0 $0.0 $1.5 $1.5 $1.5 0.0%TIGTA Office Automation

TIGTA: Audit and Investigations Activities $2.5 $2.5 $2.5 $2.5 $8.1

TIGTA Telecommunications

TIGTA: Audit and Investigations Activities 1.3 1.3 1.3 1.3 3.1

TIGTA Infrasturcture 

TIGTA: Audit and Investigations Activities 0.4 0.4 0.4 0.4 1.0

TIGTA Security 

TIGTA: Audit and Investigations Activities 0.3 0.3 0.3 0.3 0.8

Subtotal, Infrastructure Investments $4.4 $4.4 $4.4 0.0% $4.4 0.0% $13.0 192.5%

2/

Enterprise Architecture $0.3 $0.3 $0.3 0.0% $0.3 0.0% $0.3 0.0%Total IT Investments $4.7 $4.7 $6.2 32.1% $6.2 0.0% $14.7 138.0%1/ FY 2006 Obligations of FY 2006 Enacted amounts2/ The $8.6 million increase in Infrastructure from FY 2007 to FY 2008 is due to the inclusion of TIGTA labor costs which were previously not reflected 

FY 2005 % Change 

from FY05

Actuals to

FY06

% Change 

from FY06 to 

FY07

% Change from

FY07 to FY08

TIGTA - 16 
4B – Information Technology Strategy 

The Office of Information Technology (OIT) provides cost effective information 

technology products and services on behalf of TIGTA. All OIT activities are focused on 

providing effective and secure access to data sources that are critical to the successful 

completion of the TIGTA mission. OIT personnel routinely work with investigators and 

auditors, providing integrated support and/or data analysis services to foster the 

independence of TIGTA oversight and the integrity of its investigative and audit findings. 

Office Automation: OIT provides traditional office automation services for all TIGTA 

employees. This includes provisioning of personal computers, productivity software, 

electronic mail, and other local area network services, such as network storage for 

effective data backup and recovery. OIT office automation is based on a standardized 

tool suite for internal TIGTA business operations. This tool suite is augmented to 

provide specialized software tools that permit investigators and auditors to access and

analyze data residing on a wide variety of IRS and other governmental information 

systems. OIT monitors these tools to ensure availability and to determine when 

technology maintenance and refreshment activities are needed for effective protection of 

TIGTA-accessed data. 

Telecommunications: OIT supports a wide area network (WAN) with access points 

throughout the United States and Puerto Rico, in direct support of a geographically 

distributed investigative and audit workforce. The WAN provides adequate bandwidth 

for internal and external data transmissions while providing secure access to other 

governmental computer networks and entities. For example, the WAN provides a secure 

interconnection between TIGTA and IRS that is used for electronic data exchange as well 

as for cost effective access to IRS information systems. The WAN also enables secure, 

remote access from alternative work locations. Alternative locations include the 

approximate 625 localities in which IRS conducts business without a local TIGTA 

presence. It also includes worksites that have been approved under the TIGTA telework 

program. TIGTA also operates a Land Mobile Radio (LMR) system that permits 

investigators to safely conduct field operations with reliable wireless communication 

devices. 

Infrastructure: OIT operates information systems at various offices. In accordance with 

the OIT Strategic Plan and continuing cost containment measures, OIT is consolidating 

information technology services, where feasible, into data center facilities. The 

consolidation effort is designed to increase information system and resource utilization, 

eliminate unneeded redundancies, and improve ability to support core investigative and 

audit activities. As part of a TIGTA data center, extensive data analysis services are 

provided by OIT in direct support of investigative and audit activities. For example, 

these services permit TIGTA to meet its responsibilities under the Taxpayer Browsing 

Protection Act of 1997. In addition to consolidation of TIGTA’s IT Infrastructure 

operations TIGTA has provided information on its Data Centers, Telecom (Voice 

Networks), Data Networks, Desktop/Seat Management and Help Desk through the 

TIGTA - 17 
Department to the Infrastructure Optimization Initiative LoB and will evaluate Centers of 

Excellence as alternatives to providing its own infrastructure 

Enterprise Architecture and Security: TIGTA operates several programs to comply with 

various legislative mandates and to improve the reliability, availability, and effectiveness 

of its information technology. For example, the enterprise architecture initiative 

responds to the Clinger-Cohen Act to align business practices with technology needs. It 

will provide for better decision making ability on information technology investment and 

related resource allocation. The security program focuses on securing data accessed by 

TIGTA through compliance with specific provisions of the E-Government Act of 2002 

and the Federal Information Security Management Act (FISMA). This program spans 

systems certification and accreditation, incident response, and continuity of operations. 

Currently, all TIGTA FISMA systems are certified and accredited. OIT also coordinates 

with the IRS on areas of mutual concern, especially as it pertains to continued TIGTA 

access to IRS information systems as the IRS strengthens its own security posture in 

response to TIGTA, and other, audit findings. 

Non-Major Investments: OIT maintains two internal management information systems 

that have recently been reclassified as non-major investments under Capital Planning and 

Investment Control (CPIC) guidelines. The Performance and Results Information 

System (PARIS) supports investigative compliance with the Government Performance 

and Results Act (GPRA). The system facilitates GPRA compliance by collecting data 

needed to measure performance of investigative activities, specifically as it pertains to 

complaint management and investigating cases. The PARIS Property Module (PPM) is a 

custodial accounting system used to support the bureau’s Personal Property Management 

Program. PPM is used to track capitalized and expensed assets used in support of 

investigative and audit activities and to track assets seized during law enforcement 

actions. 

TIGTA’s Information Technology Strategy can be found in its Information Resource 

Management Plan. TIGTA will be working with the Department shortly to articulate IT 

investment performance measures that are thoroughly developed, quantifiable, and 

appropriate. 

TIGTA is in the process of implementing an IT Program Management Office (PMO). 

The PMO’s mission is two-fold. The first is to provide overall responsibility for planning, 

directing, and coordinating activities pertaining to the review of technology and business 

unit projects on an enterprise level. The second is to increase project management 

competence and foster sustained success of projects carried out by OIT. 

In conducting this mission the PMO will develop and maintain an IT investment portfolio 

that captures specific project and investment management data elements necessary to 

evaluate IT projects or acquisitions across the stages of their life cycle. 

Status Report – the PMO will facilitate the status reporting and milestone information for 

the TIGTA Investment Review Board (IRB) to monitor all capital investments under 

development to ensure that cost, schedule, and performance targets are being met. In the 

TIGTA - 18 
event that the PMO reports that a project is facing cost overruns, major schedule delays, 

or performance shortfalls, the IRB will determine the need to cancel the project and 

redirect freed resources to other priorities. The IRB must coordinate the canceling of 

projects and redistribution of funds for those projects that the Treasury Investment 

Review Board (TIRB) has approved. 

4.3 – PART Evaluation Table 

Not applicable for TIGTA. 

For a complete list of PART results visit the following website: 

http://www.whitehouse.gov/omb/expectmore/all.html

TIGTA - 19