Treasury Inspector General for 

Tax Administration
 

FY 2015
 

President’s Budget
 
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Table of Contents 

Section 1 – Purpose........................................................................................................................4

1A – Mission Statement ..............................................................................................................4

1.1 – Appropriations Detail Table ...............................................................................................4

1B – Vision, Priorities and Context.............................................................................................4

Section 2 – Budget Adjustments and Appropriation Language .............................................18

2.1 – Budget Adjustments Table ...............................................................................................18

2A – Budget Increases and Decreases Description ...................................................................18

2.2 – Operating Levels Table ....................................................................................................19

2B – Appropriations Language and Explanation of Changes ...................................................20

2C – Legislative Proposals ........................................................................................................20

Section 3 – Budget and Performance Plan ................................................................................21

3A – Audit .................................................................................................................................21

3.1.1 – Audit Budget and Performance Plan .............................................................................24

3B – Investigations ....................................................................................................................24

3.1.2 – Investigations Budget and Performance Plan................................................................28

Section 4 – Supplemental Information ......................................................................................30

4A – Summary of Capital Investments .....................................................................................30

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Dollars in Thousands 

Treasury Inspector General for Tax

Administration 

FY 2013 FY 2014 FY 2015 FY 2014 to FY 2015 

Appropriated Resources Operating Level Enacted Request $ Change % Change 

FTE AMOUNT FTE AMOUNT FTE AMOUNT FTE AMOUNT FTE AMOUNT 

New Appropriated Resources: 

Audit 343 54,309 349 60,850 349 61,264 0 414 0.00% 0.68% 

Investigations 478 89,452 486 95,525 486 96,155 0 630 0.00% 0.66% 

Subtotal New Appropriated Resources 821 $143,761 835 $156,375 835 $157,419 0 $1,044 0.00% 0.67% 

Other Resources: 

Reimbursables 2 1,247 2 1,700 2 1,500 0 (200) 0.00% -11.76% 

Subtotal Other Resources 

Total Budgetary Resources 

2 $1,247 

$145,008 

2 

823 837 

$1,700 

$158,075 

2 $1,500 

$158,919 

0 ($200) 

$844 

0.00% 

837 0 0.00% 

-11.76% 

0.53% 

 

 

 

Section 1 – Purpose 

1A – Mission Statement 

Provide quality professional audit, investigative, and inspections and evaluations services that 

promote integrity, economy, and efficiency in the administration of the Nation’s tax system. 

1.1 – Appropriations Detail Table 

1B – Vision, Priorities and Context 

The Treasury Inspector General for Tax Administration (TIGTA), an independent office within 

the Department of the Treasury, was created by Congress as a part of the Internal Revenue 

Service Restructuring and Reform Act of 1998 (RRA 98) 1 with a statutory mandate to provide 

oversight by conducting independent audit, investigative, and inspections and evaluations 

services necessary to improve the quality and credibility of Internal Revenue Service (IRS) 

operations, including oversight of the IRS Chief Counsel and the IRS Oversight Board. TIGTA 

conducts independent reviews and provides an unbiased perspective for improving the economy, 

efficiency, and effectiveness of IRS programs. TIGTA makes recommendations designed to 

improve the administration of the Federal tax system, conducts administrative and criminal 

investigations of allegations of waste, fraud, and abuse, and helps to ensure that the IRS protects 

and secures taxpayer’s data. TIGTA also has the unique responsibility of protecting the IRS and 

its employees. 

TIGTA continues to be committed to its vision and mission, and to accomplishing its objectives 

and goals. TIGTA safeguards the integrity and the public’s trust and confidence in Federal tax 

administration through the audits, investigations, and inspections and evaluations it conducts. 

This focus is a matter of extreme importance given the current economic environment and the 

increased emphasis by the Administration, Congress, and the American people on Federal 

Government accountability and its efficient use of resources. The American people must be able 

to trust that their government is taking action to stop wasteful practices and ensure that every tax 

dollar is spent wisely. 

1 Pub. L. No. 105-206, 112 Stat. 685. 

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Increased/Protected Revenue

FY 2008 to FY 2013

120 $10.6

$9.2 100 $8.6)

0

FY 2008 FY 2009 FY 2010 FY 2011 FY 2012 FY 2013

Return on Investment#(ROI)

ROI&$150&to $1

25 $22.7 ROI&$116&to $1

ROI&$119&to $1

20 $18.1 $16.

FY 2010 FY 2011 FY 2012 FY 2013

In Billions In Billions

$1.5 20 $.388

80

60 $4.9

40

ROI $74 to $1 15

$11.3

10

5 $.152 $.152 $.152 $0.143

0

Cost Revenue/Financial Value

 

 

 

 

 

 

 

 

 

 

 

 

TIGTA is based in Washington, DC with 65 offices located throughout the United States and 

Puerto Rico. TIGTA is uniquely organized by function, to meet current tax administration 

challenges and to keep pace with emerging issues. These functions include: 

•	 Office of Audit (OA) - conducts audits that advise the American people, Congress, the 

Secretary of the Treasury, and IRS management of high-risk issues relating to the 

administration of IRS programs and operations. TIGTA’s audit recommendations aim to 

improve IRS systems and operations, while emphasizing fair and equitable treatment of 

taxpayers. 

•	 Office of Investigations (OI) - investigates external threats of violence against IRS 

employees and facilities, and internal allegations of criminal and administrative misconduct 

by IRS employees and contractors. OI also conducts investigations to protect the IRS against 

bribery attempts, impersonations and external, cyber-based and often globally complex 

threats that would impede the IRS’s ability to collect revenues and safeguard the processing 

of approximately 239 million returns annually. 

•	 Office of Inspections and Evaluations (I&E) - provides responsive, timely, and cost-effective 

inspections and evaluations of IRS challenge areas. Oversight activities are designed to 

identify high-risk systemic inefficiencies in IRS operations and to investigate exploited 

weaknesses in tax administration. 

Key Accomplishments and Budget 

Savings 

The scope, complexity and magnitude of 

the Nation’s deficit present significant 

challenges. TIGTA’s oversight activities 

included: 

•	 Increased and/or protected revenue in 

the amount of $10.6 billion; and 

•	 Cost savings of $5.9 billion. 

Funding for TIGTA allows oversight efforts 

to continue, and in FY 2013 these efforts 

continue to produce a return on a taxpayer’s 

investment. TIGTA’s overall financial 

accomplishments in Fiscal Year (FY) 2013 

produced potential financial benefits/revenue 

of $116 for every $1 invested. For example, 

in FY 2013, TIGTA issued audit reports with 

recommendations that potentially increased 

and/or protected revenue of $10.6 billion. 

Increased/protected revenue includes the 

assessment or collection of additional taxes 

(increased revenue) or ensuring the accuracy of the total taxes, penalties, and interest paid to the 

Federal Government (revenue protection). TIGTA also issued audit reports with 

recommendations that identified a potential $5.9 billion in funds that could be put to better use. 

The phrase “recommendation that funds be put to better use” means funds that could be used 

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more efficiently or effectively if management took actions to implement and complete the 

recommendation, including but not limited to: 

•	 Reductions in outlays; 

•	 Avoidance of unnecessary expenditures noted in pre-award contract reviews; and 

•	 Prevention of erroneous payment of refundable credits. 

In addition to funds that could be put to better use, TIGTA’s investigative efforts resulted in the 

recovery of over $14,400 of embezzled/stolen funds and $16.7 million in court-ordered fines, 

penalties, and restitution. 

To continue strengthening TIGTA’s oversight and issuing result-driven recommendations, 

TIGTA must: 

•	 Adapt to the evolving nature of IRS operations and mitigate internal and external risks 

associated with security, modernization, tax compliance and the tax gap, tax-exempt 

organizations, offshore tax evasion, identity theft, and the implementation of the Patient 

Protection and Affordable Care Act (ACA)2

, as amended by the Health Care and Education 

Reconciliation Act of 2010;

3 

•	 Respond to threats and attacks against IRS employees, property, and sensitive information; 

•	 Conduct comprehensive, real-time audits, and inspections and evaluations that identify 

problems as they occur and include recommendations which result in higher revenue and less 

waste, fraud, and abuse; and 

•	 Inform the American people, Congress, and the Secretary of the Treasury of the challenges 

confronting the IRS and its efforts to increase voluntary tax compliance, address identity 

theft, and tax fraud. 

Strategic Goals and Objectives 

TIGTA’s Fiscal Year 2013 – 2016 Strategic Plan guides program and budget activities and 

supports the Department of the Treasury’s Strategic Plan, which includes a goal to “Fairly and 

effectively reform and modernize Federal financial management, accounting, and tax systems.” 

TIGTA also supports Treasury’s Strategic Plan objectives 3.2: Improve the disbursement and 

collection of federal funds and reduce improper payments made by the U.S. government, and 

3.3: Pursue tax reform, implement the Patient Protection and Affordable Care Act and Foreign 

Account Tax Compliance Act, and improve the execution of the tax code. 

The goals of TIGTA’s Strategic Plan are to: 

•	 Promote the economy, efficiency, and effectiveness of tax administration; 

•	 Protect the integrity of tax administration; and 

•	 Continue to be an organization that values its people. 

TIGTA’s commitment to its strategic goal to be an organization that values its people was 

recognized in the Partnership for Public Service’s 2013 Best Places to Work rankings. TIGTA 

placed 8th out of 300 agencies, up from 13th out of 292 in 2012, in the overall index score that 

measures the performance of agency subcomponents related to employee satisfaction and 

2 Pub. L. 111-148, 124 Stat. 119 3 Pub. L. No. 111-152, 124 Stat. 1012. 

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commitment. Among all Treasury bureaus, TIGTA placed the highest in the Best Places to 

Work rankings. 

FY 2015 Budget Request 

TIGTA’s FY 2015 budget request of $157,419,000 represents an increase of 0.67 percent above 

the FY 2014 enacted budget. These resources will fund critical audit, investigative, and 

inspections and evaluations services to protect the integrity of the Nation’s system of tax 

administration. 

In accordance with the requirements of Section 6(f)(1) of the Inspector General Act of 1978 (as 

amended), 4 the Treasury Inspector General for Tax Administration submits the following 

information related to its FY 2015 Budget Request: 

•	 The aggregate budget request for TIGTA operations is $157,419,000; 

•	 The portion of the request needed for TIGTA training is $1,750,000; and 

•	 The portion of the request needed to support the Council of the Inspectors General on 

Integrity and Efficiency is $296,000. 

The amount requested for training supports TIGTA’s training needs for FY 2015. 

FY 2015 Priorities 

TIGTA’s audit, investigative, and inspections and evaluations’ priorities include: 

•	 Identifying opportunities to improve the administration of the Nation’s tax laws and achieve 

program efficiencies and cost savings; 

•	 Mitigating risks associated with: security over taxpayer data and employees, information 

systems modernization, identity theft, oversight of tax-exempt organizations, procurement 

fraud, tax compliance, the implementation of tax law changes, and human capital challenges 

facing the IRS in its domestic and/or international operations; 

•	 Providing the IRS with the investigative coverage and the information necessary to mitigate 

threats against its employees, facilities, and systems; 

•	 Responding to domestic and foreign threats to and attacks against IRS employees, property, 

data infrastructure, and sensitive information; 

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

misconduct including the inappropriate disclosure of confidential taxpayer information by 

IRS employees; 

•	 Conducting comprehensive and real-time audits, inspections and evaluations that include 

recommendations for the achievement of monetary benefits; addressing erroneous and 

improper payments; and enhancing the service the IRS provides to taxpayers; 

•	 Informing the American people, Congress, and the Secretary of the Treasury of problems on 

a timely basis once all facts are known; 

•	 Overseeing the IRS’s efforts to administer tax provisions of the ACA; and 

•	 Overseeing the IRS’s efforts to implement the Foreign Account Tax Compliance Act 

(FATCA)5 which helps prevent U.S. taxpayers from hiding assets offshore. 

4 5 U.S.C. app. 3 § 6(f)(1).
 5 Pub. L. 111-147, Hiring Incentives to Restore Employment (HIRE) Act of 2010, Title V, Pub. L. 111-147, 124 

Stat. 71.
 

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Closing the Federal Tax Gap 

In FY 2012, the IRS updated its estimates of the tax gap. The gross tax gap – the difference 

between taxes owed and taxes paid on time - was $450 billion in 2006. In a June 2011 hearing 

before the U.S. Senate’s Committee on Finance, an official of the Government Accountability 

Office (GAO) testified that there are no easy fixes to the tax gap (GAO11 74T). GAO further 

stated that, despite large and growing impediments, it is nevertheless important that the 

Government continues to seek out potential causes and solutions. TIGTA will continue to direct 

its efforts to reduce the tax gap. In FY 2013, TIGTA reported that the IRS should take action to 

reinforce the importance of recognizing and investigating fraud indicators during office audits. 

Since fraud indicators are not always recognized and properly investigated, the IRS may be 

missing opportunities to further promote voluntary compliance and enhance revenue for the 

Department of the Treasury. By implementing TIGTA’s recommendations in this area, the IRS 

can significantly increase compliance. 

Office of Audit 

The budget for OA provides funding for comprehensive and independent audits of IRS programs 

and operations that help promote sound administration of the Nation's tax laws. Audit coverage 

is determined by assessing the risks associated with the potential audit universe and identifying 

the highest priority audits to address major management challenges and key emphasis areas. 

Sufficient funding will allow TIGTA to continue its oversight responsibilities and audit coverage 

of the major management challenges facing the IRS. Audit activities are also focused on 

assessing key areas in which major risks face the IRS, including: 

• Tax-exempt organizations; 

• Identity theft; 

• Return preparers; 

• Contracts; and 

• Whistleblower program. 

OA has a continuing need to provide close oversight of the IRS’s tax-exempt organization 

program. In FY 2013, TIGTA issued a report on the IRS’s processing of applications from 

organizations claiming tax-exempt status by I.R.C. 501(c)(3) and I.R.C. 501(c)(4). This report 

highlighted ineffective management in this area and identified inappropriate practices by IRS 

employees who processed these cases. Congress has called for continuing oversight by TIGTA 

of the IRS’s tax-exempt program to ensure that these problems have been corrected and will 

never happen again. 

Addressing Substantial Risks in the Implementation of the Affordable Care Act 

The President signed into law significant changes to the Nation’s health care system under the 

ACA. Multiple ACA provisions have been added to or amended in the Internal Revenue Code, 

and at least eight provisions require the IRS to build new processes in tax administration. These 

provisions provide incentives and tax breaks to individuals and small businesses to offset health 

care expenses. They also impose penalties, administered through the tax code, for individuals 

and businesses that do not obtain health coverage for themselves or their employees. Other 

provisions raise revenue to offset the costs of health care reform. TIGTA’s independent 

oversight plays a key role in ensuring that these provisions are implemented and administered in 

accordance with the law and the intent of Congress. 

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In FY 2013 and FY 2014, several key ACA provisions will have become effective. As such, 

FY 2015 will be a significant year for the oversight of ACA provisions. Tax returns from 2014,
 

processed in Calendar Year (CY) 2015, will be the first that contain health insurance premiums
 

and the premium tax credits. New systems will have to be in place to share data with other 

Federal, State, and private sector organizations to process health care information on tax returns. 

In FY 2015, TIGTA will need to closely monitor tax return processing, the ability of the new
 

IRS systems to accurately calculate insurance credits, and the effectiveness of data sharing to 

ensure the ACA provisions are implemented. 

Significant TIGTA oversight will be required in areas that include:
 

•	 Refundable tax credits providing premium assistance for certain individuals and families 

purchasing health insurance through an exchange; 

•	 Security over information sharing and reporting among all ACA stakeholders; 

•	 Integration of ACA provisions into existing tax processing systems; 

•	 Development and testing of new systems to support ACA provisions; 

•	 Requirement to maintain minimum essential coverage and report of health insurance 

coverage; 

•	 Additional hospital insurance tax on high-income taxpayers; 

•	 Medicare contribution tax on unearned income; 

•	 Medical device manufacturers’ excise tax; 

•	 ACA compliance examinations of tax-exempt hospitals; 

•	 Refund controls validation related to tax-exempt organizations’ claims for refund of the small 

business health care tax credit; 

•	 Financial management information related to the ACA; 

•	 Modification of itemized deduction for medical expenses; and 

•	 Annual fee requirement for health insurance providers. 

Office of Investigations 

Through its investigative programs, OI 

seeks to protect the IRS’s ability to collect 

over $2 trillion in annual revenue for the 

Federal Government by investigating IRS 

employee misconduct and criminal activity, 

threats to IRS employees and facilities, and 

attempts to impede or otherwise interfere 

with the IRS’s collection efforts. 

Funding OI allows TIGTA to meet the 

significant challenges facing the IRS in the 

implementation of a fair and effective 

system of tax administration. IRS 

employees are entrusted with the sensitive 

personal and financial information 

belonging to the American taxpayer. Because the Federal tax system is based on voluntary 

compliance, it is also essential to the public’s confidence that information given to the IRS for 

tax administration purposes be adequately safeguarded and kept confidential. Employee 

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misconduct not only breaks the public’s trust and confidence, but also undermines the IRS’s 

ability to deliver taxpayer service, enforce tax laws effectively, and collect taxes owed. 

TIGTA’s OI places the highest priority on its statutory responsibility to safeguard approximately 

100,000 IRS employees located in 648 facilities throughout the United States. Threats of 

physical violence, harassment, and intimidation of IRS employees are criminal violations that are 

aggressively investigated and referred for prosecution. As a result, IRS employees feel more 

secure in their work environment and can focus on performing their critical jobs. By maintaining 

a constant focus on the expanding threat environment, OI balances its attention on this critical 

area and its other investigative programs that help to protect the integrity of the Federal tax 

system. 

Emerging Issues 

Affordable Care Act: TIGTA anticipates a significant rise in the number of complaints and 

investigations as a result of the increased ACA requirements. This FY 2015 budget request will 

allow TIGTA to investigate ACA-related allegations, timely respond to threats and assaults 

against IRS employees and facilities, and provide armed escorts to IRS employees who meet 

with potentially dangerous taxpayers. TIGTA anticipates an increase in: 

•	 The number of threats against IRS employees and facilities as the IRS begins its 

implementation of the ACA by imposing penalties, which will likely increase negative public 

sentiment towards the IRS. 

•	 The number of ACA-related impersonation investigations by criminals attempting to 

fraudulently obtain personally identifiable information from unsuspecting taxpayers by using 

aspects of the ACA to further their ruses that result in identity theft and other crimes. 

•	 The number of employee integrity investigations, because IRS employees and contractors 

will have access to sensitive information from taxpayers’ health insurers and the potential for 

unauthorized access to, or disclosure of, confidential taxpayer information. 

International Cybercrimes and Identity Theft: By the end of CY 2012, the IRS reported almost 

1.8 million identity theft cases. Approximately 16 percent of these cases were brought to the 

IRS's attention by taxpayers who reported that they were victims of identity theft, and about 

83 percent were detected by the IRS. The tools and techniques used by the perpetrators of 

identity theft are such that they can be deployed from anywhere in the world, using Internetconnected computers, without regard to borders. The FY 2015 budget request includes resources 

needed to combat cybercriminals by funding a highly specialized group of criminal investigators 

with technical expertise in investigating electronic crimes, including computer intrusions and 

Internet-based fraud schemes. 

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Figure 1: The top 10 denied sources of malicious 

activity by Internet Protocol (IP) space registered 

to a country targeting the IRS Network. This chart 

was based on an IRS Computer Security Incident 

Response Center (CSIRC) quarterly report dated 

July – September 2013. 

The electronic system of tax administration that 

is conducted over IRS computer networks is 

targeted for malicious activity each day from 

network connections located throughout the 

world (Figure 1). Because many 

cybercriminals reside outside the United States, 

TIGTA special agents work with law 

enforcement personnel in foreign countries to 

identify leads and execute search and arrest 

warrants. The FY 2015 resources are necessary 

for TIGTA to recruit and retain highly trained 

individuals to support these critical 

international investigations. 

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Office of Inspections and Evaluations 

TIGTA's I&E provides a range of specialized services and products, including quick reaction 

reviews, onsite inspections of an office, and in-depth evaluations of a major function, activity, or 

program. 

Inspections: 

• Provide factual and analytical information; 

• Monitor compliance; 

• Measure performance; 

• Assess the effectiveness and efficiency of programs and operations; 

• Share best practices; and 

• Inquire into allegations of waste, fraud, abuse, and mismanagement. 

Evaluations often result in recommendations to streamline IRS operations, enhance data quality, 

and minimize inefficient and ineffective procedures. During FY 2013, I&E produced eight 

inspection/evaluation reports. Two inspections reviewed IRS expenditures under the American 

Recovery and Reinvestment Act of 2009. Five inspections reviewed IRS executive travel; 

implementation of the Telework Act; travel gainsharing; Criminal Investigation’s relocation and 

post of duty neutral program; and the controls in place for the IRS to achieve its goal of reducing 

official time charges for union activities. These inspections identified over $204,000 in potential 

cost savings that could be gained with improved efficiencies. Finally, I&E produced a 

comprehensive evaluation of the tax gap. 

I&E will provide oversight of the IRS’s administration of the ACA and implementation of the 

FATCA. I&E provides TIGTA with additional flexibility, capacity, and capability to produce 

value-added products and services to improve tax administration. Inspections usually are more 

limited in scope and completed in a more compressed period of time compared to traditional 

audits. I&E’s work complements audits and investigations, and its findings may result in 

subsequent audits and/or investigations. 

Office of Chief Counsel – Advisory Opinions 

The Office of Chief Counsel (OCC) provides independent and timely legal advice, guidance, and 

counsel to the Inspector General and TIGTA functions on a wide variety of substantive and 

procedural matters relating to audits, investigations, and inspections and evaluations of IRS 

programs and operations. OCC also provides legal advice and counsel on policy and procedural 

matters relating to TIGTA operations. In addition, OCC represents TIGTA in administrative 

litigation before the Merit Systems Protection Board and the Equal Employment Opportunity 

Commission, and assists the Department of Justice in Federal civil litigation affecting TIGTA. 

OCC serves as TIGTA’s designated ethics official and manages TIGTA’s ethics program, 

providing ethics training, advice, and financial disclosure reviews. OCC also coordinates 

TIGTA’s timely response to Freedom of Information Act (FOIA),6 Privacy Act7 and other 

disclosure requests, and reviews audit and inspections and evaluations reports for public release. 

6 5 U.S.C. § 552. 7 5 U.S.C. § 552a. 

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Major A c tivities

F Y 2009

A c tu al

F Y 2010

A c tu al

F Y 2011

A c tu al

F Y 2012

A c tu al

F Y 2013

A c tu al

F Y 2014

P rojec tion s

F Y 2015

P rojec tion s

Final Advis ory O pinions

R eceived 1,754 2,546 2,412 2,501 2,236 2,325 2,418

F reed om of In formation A c t

R equests R eceived 220 275 218& 227 330 343 357

T otal R ec eip ts 1,974 2,821 2,630& 2,728& 2,566& 2,669& 2,775&

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The OCC continues to see an increase in workload levels while staffing levels have remained 

relatively constant. Despite improvement in cycle time and increased efficiency in working 

advisory opinion cases, OCC continues to experience a rise in its inventory. From FY 2009 

through FY 2012, case receipts increased by 30 percent, from 1,754 to 2,501. Although FY 2013 

actual advisory request receipts of 2,236 were below FY 2012’s actual, FOIA requests 

significantly exceeded projections by 32 percent and FY 2012’s actual by 45 percent. Over the 

next several years, OCC’s workload will continue to grow. By FY 2015, the total number of 

advisory requests and FOIA requests received are projected to exceed 2,700, an increase of 

8 percent over FY 2013’s actual. Current projections indicate that, by FY 2015, the total number 

of requests received will have increased by 4 percent above FY 2014 projections. 

Office of Chief Counsel Workload Impact Table 

Office of Mission Support 

The Office Mission Support (OMS) provides cost-effective Federal Information Security 

Management Act8 security services that permit the successful completion of TIGTA’s business 

goals while balancing the business need with regulatory compliance requirements. By 

developing policy and monitoring security controls, OMS facilitates the protection of TIGTA 

information systems against actions that could impact a system’s availability, confidentiality, and 

integrity. Policy and control monitoring help reduce the risks associated with the collection, 

management, and dissemination of information for purposes of audits, investigations, and 

inspections and evaluations. OMS has also implemented an organization-wide governance 

process that includes a disciplined and coordinated approach to rigorous decision-making on 

project management practices. The guiding principle of the governance process is to 

demonstrate sound project management effectiveness and efficiencies. OMS’s governance 

process also ensures a uniform and effective approach for the oversight, guidance, and approval 

of available TIGTA funds and resources. 

Office of Information Technology 

TIGTA’s Office of Information Technology (OIT) provides cost-effective, timely Information 

Technology (IT) products and services that permit successful completion of TIGTA business 

goals while meeting legislative mandates. By developing, providing, and supporting a wide 

variety of IT products and services, OIT facilitates the collection, management, analysis and 

dissemination of information for audit, investigative, legal and management services benefit. 

TIGTA has no major IT investments based on criteria of the Office of Management and Budget 

(OMB) and the Department of the Treasury. Several non-major investments, however, directly 

support the mission, strategy, and day-to-day operations of the bureau. 

8 Pub. L. No. 107-347, Title III, 116 Stat. 2899, 2946-2961 (2002) (codified as amended in 44 U.S.C. §§ 3541-

3549). 

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These investments include: 

• Secure Information and Technology (IT) Mobility; 

• Server and Storage Infrastructure; 

• Refreshed Applications and Collaboration Environment; 

• IT Governance and Total Cost of Ownership; and 

• Telecommunications Infrastructure. 

TIGTA’s Audit, Investigations, and Inspections and Evaluations functions rely heavily on the 

products and services provided by OIT to execute TIGTA’s mission. IT is the force multiplier 

that allows auditors, agents, and inspectors to accomplish their objectives within the staffing and 

physical constraints that might otherwise prevent their completion. As the demands on the 

organization grow, it becomes increasingly dependent on the use of technology. Those demands 

translate into the need for more and improved IT services and the skilled staff to provide those 

services to the rest of the organization. 

Retirements, reassignments, and other departures result in the loss of key skills sets. This is the 

case not only for existing systems but for new technology as well. The need for continuing 

education to stay abreast of new technologies, changes to products and services offered by 

current vendors, not to mention the growing demands placed on a professional enterprise have 

stretched the remaining staff to its limits. Not only is new staff required to learn and support the 

existing systems, but new products and services are also needed that will allow OIT’s mission 

critical work to continue. 

In addition to auditing and reporting on the condition of IT security at the IRS, TIGTA, like all 

Federal entities, faces its own challenges regarding compliance with the security mandates and 

recommendations of OMB, Department of Homeland Security Executive orders and National 

Institute of Standards and Technology guidance. To prevent the compromise of the data 

obtained within the parameters of its jurisdiction, TIGTA must aggressively ensure that its own 

security posture is properly maintained. This requires additional training for staff that will allow 

them to be both knowledgeable in IT security and skilled in its practice. 

TIGTA - 14
 
 

 

 

 

 

 

 

 

 

Figure 2: IRS Austin Campus 

Safeguarding the IRS and Providing Comprehensive Oversight 

TIGTA places its highest priority on ensuring the safety and security of IRS employees and 

facilities. TIGTA evaluates intelligence 

information regarding potential violent acts 

against the IRS and develops proactive leads 

from other law enforcement agencies and 

sources to mitigate potential threats. 

In February 2010, an aircraft attack against an 

IRS facility in Austin, Texas (Figure 2), took 

the life of an IRS employee and injured 

several others. OI initiated improved 

partnerships with the IRS and other law 

enforcement stakeholders to collectively 

deliver a more efficient approach to 

addressing all aspects of threat response, 

critical incident management, and 

information distribution. 

As part of these improvements, the Threat Information and Critical Incident Response Center 

Initiative was created to ensure that threats against IRS personnel, facilities, or critical 

infrastructure are effectively and proficiently identified, investigated, and mitigated. 

Additionally, an OI Threat Information Notification System (TINS) was established to ensure the 

efficient and accurate distribution of threat-related information to all impacted stakeholders. The 

TINS protocol supports key personnel within TIGTA and the IRS, and provides for real-time 

information sharing to facilitate the protection of the IRS’s most important resource, its 

employees. 

TIGTA and the IRS are now better positioned to make decisive investigative and security 

decisions affecting IRS personnel, facilities, and critical infrastructure well into the future. 

Security for Taxpayer Data and Employees: The IRS faces the daunting task of securing its 

computer systems against the growing threat of cyber-attacks. Effective information systems 

security is essential to ensure that data are protected against inadvertent or deliberate misuse, 

improper disclosure, or destruction, and that computer operations supporting tax administration 

are secured against disruption or compromise. In addition to securing a vast amount of sensitive 

financial and personal data, the IRS must also protect approximately 100,000 employees 

and 648 facilities throughout the United States. These operating conditions are challenging for 

the IRS and underscore the need for continued vigilance in the area of physical and personnel 

security. 

In FY 2013, TIGTA issued a report noting significant delays hindered efforts to provide 

continuous monitoring of security settings on computer workstations. Security settings on 

computer systems should be monitored and maintained continuously so that security weaknesses can 

be identified and mitigated promptly, reducing the likelihood of a security breach. Also, TIGTA 

issued another report noting that improvements are needed to ensure the effectiveness of the 

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Privacy Impact Assessment Process. Privacy laws have significant ramifications for the IRS 

because of its interactions with potentially every household in the United States. 

To prevent the compromise of sensitive taxpayer information, TIGTA proactively identifies IRS 

employees who inappropriately access and/or disclose such private information. These 

violations are known as unauthorized access (UNAX). The initial investigation into the 

allegation of UNAX by an IRS employee often leads to other criminal violations, including fraud 

and identity theft. The importance of efforts to detect UNAX is often underestimated, because 

too often UNAX is seen as browsing by bored employees. IRS employees who are found to 

have committed UNAX violations may be subject to fines, imprisonment, and/or loss of their 

jobs. In FY 2013, TIGTA closed 302 UNAX investigations, resulting in 265 adjudicated 

personnel actions taken against IRS employees. 

Another significant oversight responsibility is TIGTA’s review of the IRS’s computer 

applications that contain sensitive information. The IRS currently has 196 application systems 

that process sensitive data. Forty-six of those systems are considered to be at risk for UNAX. 

With the FY 2015 resources, TIGTA can ensure these systems are evaluated properly. In 

addition, TIGTA can make necessary recommendations so the IRS can implement improvements 

to mitigate these risks. 

Notwithstanding limited training program resources, TIGTA continues its outreach efforts to IRS 

employees and tax practitioners, thereby developing relationships with these groups to assist it in 

identifying and encouraging the reporting of crimes against the IRS and taxpayers. In FY 2013, 

TIGTA provided 1,520 awareness presentations to 43,937 IRS employees and 28 awareness 

presentations to 3,579 tax practitioners and preparers. TIGTA’s training program raises 

awareness of bribery attempts so individuals can be cognizant of these overtures and report such 

violations to TIGTA for investigation. Additionally, special agents conduct awareness 

presentations to educate IRS employees of TIGTA’s oversight responsibility and share 

information to help identify ways to prevent physical assaults and threats and deter waste, fraud, 

and abuse. 

Fraudulent Claims and Improper Payments: The Improper Payments Information Act of 20029 

defines an improper payment as any payment that should not have been made or that was made 

in an incorrect amount (both overpayments and underpayments) under statutory, contractual, 

administrative, or other legally applicable requirements. In FY 2013, TIGTA issued a report 

noting that further efforts are needed to ensure the IRS prisoner file is accurate and complete. 

TIGTA issued another report that noted that the IRS’s review process for revenue program fund 

risk assessments is informal and did not always adhere to required guidelines. 

Achieving Program Efficiencies and Cost Savings: The American people must be able to trust 

that their Federal Government is taking action to stop wasteful practices and ensure that every 

tax dollar is spent wisely. During the fall of 2011 through the summer of 2012, numerous 

Department of the Treasury, OMB, Presidential Executive orders, and other guidance documents 

were issued to ensure that the Federal Government acts as a good steward of taxpayer money by 

identifying opportunities to promote efficient and effective spending and eliminating excess 

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

TIGTA - 16
 
 

 

 

 

 

 

 

 

 

spending on conferences and travel. During FY 2013, TIGTA issued a report to the IRS noting 

that inadequate processes governing the assignment and monitoring of aircards and BlackBerry® 

smartphones result in millions of dollars in unnecessary access fees. 

Advising Congress: In FY 2013, TIGTA provided 12 testimonies, over 48 briefings, and 16 

official written responses to Congress on its audit, investigative, and inspections and evaluations 

activities. Through direct communication, TIGTA aims to address the interest of congressional 

committees on critical issues involving IRS operations. 

Fraud and Electronic Crime: Historic investigations and audits have shown that the sensitivity 

of the data that the IRS collects makes it an attractive target for employees, hackers, and others 

residing throughout the world that could use the information for fraud and identity theft. 

TIGTA’s audit, investigative, and inspections and evaluations work provides coverage of this 

growing national and international problem, providing proactive prevention and detection efforts 

that are required in this highly vulnerable and ever-evolving area. As described in Homeland 

Security Presidential Directive 7, IRS operations that fund the Federal Government are part of 

the Nation’s key resources and critical infrastructure. These key resources and critical 

infrastructure provide the essential services that underpin American society. Degradation of the 

public’s trust in the tax system would lead to a decline in voluntary compliance and represent a 

risk to national security. 

Promoting Efficient Spending and the Campaign to Cut Waste: TIGTA continues its 

commitment to promoting efficient spending and cutting waste. All capital investments and 

major acquisitions are part of a rigorous review by TIGTA’s Investment Review Board. This 

Board performs regular monitoring to ensure proper management of these investments. For 

FY 2013, TIGTA aggressively reduced its operating expenses to meet its FY 2013 funding level 

under sequestration and the across-the-board rescission. For example, TIGTA reduced its 

operating travel by 60 percent, training and associated travel by 75 percent, and supplies by 

40 percent. In addition, TIGTA instituted a hiring freeze, cancelled or modified contracts where 

possible, and during FY 2013 did not purchase or lease any Government Owned Vehicles. For 

FY 2014 and FY 2015, TIGTA will continue its commitment to scrutinize its budget and identify 

areas for cost savings and efficiencies. 

To continue to maintain a highly skilled, proactive, and diverse Inspector General organization 

with a reputation of protecting and promoting fair tax administration, TIGTA’s employees will 

require ongoing training to meet the challenge of staying abreast of changing IRS programs and 

priorities. Also, TIGTA will ensure that its workforce will receive training that strengthens the 

knowledge and skills they need to continue to protect the public’s and Congress’s confidence in 

the tax system. 

TIGTA - 17
 
 

 

 

 

 

 

 

 

 

 

 

 

Section 2 – Budget Adjustments and Appropriation Language 

2.1 – Budget Adjustments Table 

Dollars in Thousands 

Treasury Inspector General for Tax Administration FTE Amount 

FY 2014 Enacted 835 $156,375 

Changes to Base: 

Maintaining Current Levels (MCLs): - $2,898 

Pay-Raise - $1,433 

FERS Contribution Increase - $1,039 

Non-Pay - $426 

Efficiency Savings: - ($1,854) 

Space Optimization - ($240) 

Implementation of Administrative Efficiencies - ($1,614) 

Subtotal Changes to Base - $1,044 

Total FY 2015 Base 835 $157,419 

Total FY 2015 Request 835 $157,419 

2A – Budget Increases and Decreases Description 

Maintaining Current Levels (MCLs) ...................................................... +$2,898,000 / +0 FTE 

Pay-Raise +$1,433,000 / +0 FTE 

Funds are requested for the proposed January 2015 pay-raise of 1 percent and the annualization 

of the 2014 pay-raise. 

Federal Employee Retirement System (FERS) Contribution Increase +$1,039,000 / +0 FTE 

Funds are requested for increases in agency contributions to FERS based on updated actuarial 

estimates. 

Non-Pay +$426,000 / +0 FTE 

Funds are requested for non-labor expenses such as General Services Administration (GSA) rent 

adjustments, postage, supplies, and equipment. 

Efficiency Savings ...................................................................................... -$1,854,000 / +0 FTE
 

Space Optimization -$240,000 / +0 FTE 

TIGTA is committed to being efficient by identifying savings while investing in strategic 

priorities. TIGTA will continue to reduce costs by consolidating and reducing space in leased 

buildings. TIGTA also is committed to achieving real property cost savings through the 

reduction of space usage, non-renewal of lease agreements, and/or the consolidation of existing 

space. TIGTA continues to aggressively implement telework and office right-sizing measures in 

order to reduce its footprint. As a result, TIGTA will need less building space, generating a 

savings of $240,000. 

Implementation of Administrative Efficiencies -$1,614,000 / +0 FTE 

TIGTA has closely scrutinized its budget for cost saving opportunities. However, reaching this 

savings target does impact TIGTA’s mission and programs and requires a combination of 

proactive measures. For example, all vacancies are examined to determine the impact of 

succession planning and delayed back-filling. This continual review will strategically identify 

positions where longer lapses will have the smallest impact on TIGTA’s mission. TIGTA has 

lowered its administrative costs by 20 percent compared to FY 2010 levels, as outlined in 

TIGTA - 18
 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Executive Order 13589, Promoting Efficient Spending. TIGTA also continues to identify and 

monitor cost savings in travel, training, contracts, and rent. 

2.2 – Operating Levels Table 

Dollars in Thousands 

Treasury Inspector General for Tax Administration FY 2013 FY 2014 FY 2015 

Object Classification Actual Enacted Request 

11.1 - Full-time permanent 80,282 85,963 86,507 

11.3 - Other than full-time permanent 271 584 584 

11.5 - Other personnel compensation 7,822 8,322 8,322 

11.9 - Personnel Compensation (Total) 88,375 94,869 95,413 

12.0 - Personnel benefits 30,316 32,003 32,379 

21.0 - Travel and transportation of persons 1,422 3,173 3,233 

22.0 - Transportation of things 0 19 19 

23.1 - Rental payments to GSA 9,311 9,180 9,115 

23.2 - Rental payments to others 164 221 225 

23.3 - Communication, utilities, and misc charges 1,439 1,832 1,795 

24.0 - Printing and reproduction 2 7 7 

25.1 - Advisory and assistance services 524 734 775 

25.2 - Other services 692 731 695 

25.3 - Other purchases of goods & serv frm Govt accounts 7,246 7,675 7,821 

25.4 - Operation and maintenance of facilities 4 400 408 

25.7 - Operation and maintenance of equip 885 892 909 

26.0 - Supplies and materials 746 1,113 1,032 

31.0 - Equipment 1,909 3,451 3,517 

42.0 - Insurance claims and indemnities 2 50 51 

91.0 - Confidential Expenditures 12 25 25 

Budget Activities: 

Audit 53,447 61,450 61,864 

Investigations 90,822 96,625 97,055 

Total Personnel and Compensation Benefits $118,691 $126,872 $127,792 

Total Non-Personnel 24,358 29,503 29,627 

Subtotal New Appropriated Resources $143,049 $156,375 $157,419 

Total Budgetary Resources $144,269 $158,075 $158,919 

FTE 774 837 837 

TIGTA - 19
 
 

 

 

 

 

 

2B – Appropriations Language and Explanation of Changes 

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] 10 for 

replacement only for police-type use) and hire of passenger motor 

vehicles (31 U.S.C 1343 (b)); and services authorized by 5 U.S.C. 

3109, at such rates as may be determined by the Inspector General 

for Tax Administration; [$156,375,000] $157,419,000, of which 

$5,000,000 shall remain available until September 30, [2015] 2016; 

of which not to exceed $6,000,000 shall be available for official 

travel expenses; of which not to exceed $500,000 shall be available 

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]. 

(Department of the Treasury Appropriations Act, 2014) 

2C – Legislative Proposals 

TIGTA has no legislative proposals. 

TIGTA - 20
 
 

 

 

 

 

Section 3 – Budget and Performance Plan 

3A – Audit 

($61,264,000 from direct appropriations, and $600,000 from reimbursable resources): 

TIGTA identifies opportunities to improve the administration of the Nation’s tax laws by 

completing comprehensive and independent performance and financial audits of IRS programs 

and operations. TIGTA’s audit work is concentrated on high-risk areas and the IRS’s progress in 

achieving its strategic goals. TIGTA strategically evaluates IRS programs, activities, and 

functions so that resources are expended in the areas of highest vulnerability to the Nation’s 

system of tax administration. TIGTA’s audit program incorporates both statutory audit 

requirements and specific audits identified through TIGTA’s risk-assessment process. By 

focusing on the most critical areas, TIGTA identifies and recommends improvements that add 

value while addressing high-risk tax administration issues. 

Each year, TIGTA identifies and addresses the major management and performance challenges 

and key cross-cutting issues confronting the IRS. OA identifies the major risks facing the IRS 

and annually proposes a national audit plan based on perceived risks, stakeholder concerns, and 

follow-up reviews of previously audited areas with significant control weaknesses. To keep 

apprised of operating conditions and emerging issues, TIGTA maintains liaison and consults on 

an ongoing basis with applicable stakeholders such as IRS executives, the IRS Oversight Board, 

the Department of the Treasury, the GAO, and Congress. 

TIGTA’s Annual Audit Plan communicates audit priorities to the IRS, Congress, and other 

interested parties. Many of the activities described in the Annual Audit Plan address the 

fundamental goals related to the IRS’s mission to administer its programs effectively and 

efficiently. Audits address a variety of high-risk issues such as identity theft, refund fraud, 

improper payments, tax-exempt organizations, security vulnerabilities, complex modernized 

computer systems, tax compliance, and waste and abuse in IRS operations. TIGTA’s audits and 

recommendations help: 

•	 Promote the economy, efficiency and effectiveness of IRS programs; 

•	 Ensure the fair and equitable treatment of taxpayers; and 

•	 Detect and deter waste, fraud, and abuse. 

Our recommendations not only result in cost savings, but have other quantifiable impacts, such 

as the protection of existing revenue, increased revenue, and reduction of the number of 

fraudulent refunds and improper payments. 

Recognizing the constantly evolving nature of IRS’s goals, programs, and priorities, TIGTA 

often adjusts its oversight responsibilities. In addition to its coverage of the major management 

challenges facing the IRS, OA places importance on key emphasis areas based on their 

significance and impact on tax administration. Specifically: 

•	 Tax-Exempt Organizations – The IRS’s use of inappropriate criteria for selecting and 

reviewing applications for tax-exempt status is of continuing concern to both Congress and 

organizations seeking tax-exempt status. There have been a number of congressional 

hearings, and there are ongoing Federal investigations into this matter. The IRS will 

continue to face a high level of scrutiny in the exempt organizations area in FY 2014, and 

this area will be a continued area of focus for TIGTA. 

TIGTA - 21
 
 

 

 

 

 

 

 

 

 

 

 

•	 Identity Theft – Identity theft continues to be a serious and growing problem which has a 

significant impact on tax administration. The IRS must make significant improvements in its 

ability to stop fraudulent payments and provide adequate taxpayer service to victims. 

Incidents of identity theft affecting tax administration have continued to rise since CY 2011, 

when the IRS identified more than one million incidents of identity theft. As of 

December 28, 2013, the IRS has identified more than 2.9 million incidents of identity theft in 

CY 2013. 

•	 Return Preparers – Every year, more than one-half of all taxpayers pay someone else to 

prepare their Federal income tax returns. In an effort to ensure that all paid tax return 

preparers have at least a minimum level of competency and adhere to professional standards, 

the IRS establishes new regulations which provide for registration, competency testing, and 

continuing education. A recent Federal court decision stopped the IRS’s implementation of 

some of these regulations. 

•	 Whistleblower Program – The IRS Whistleblower Program plays an important role in 

reducing the tax gap by providing an avenue for reporting tax evasion. Whistleblowers and 

their representatives continue to express concerns with the operation of this program, 

especially the lack of communication from the IRS regarding their claims. 

•	 Contracts – The IRS spends approximately $2.1 billion annually on contracts. It is 

imperative that contract actions result in the best value to the taxpayer. There are continued 

risks for fraud and abuse in this area. 

In FY 2013, TIGTA issued 115 audit reports that included potential financial benefits of 

approximately $16.6 billion and affected 3.9 million taxpayer accounts. TIGTA’s reports for 

FY 2013 addressed issues that included: 

•	 Computer Security - TIGTA audit results identified $1.2 million in inefficient use of 

resources attributable to payment for contractor support services. TIGTA found that the IRS 

appropriately acquired the Treasury Enhanced Security Initiatives project’s multiple software 

components, and the project team completed key documentation during the development 

process. However, the project experienced several delays, and the Cybersecurity Privacy 

Governance Board did not take required actions to manage the delays or the associated costs. 

•	 Compliance with non-cash charitable contribution reporting requirements - TIGTA 

estimated that more than 273,000 taxpayers claimed approximately $3.8 billion in potentially 

erroneous non-cash charitable contributions in Tax Year 2010, which resulted in an estimated 

$1.1 billion reduction in tax/potential tax revenue loss attributable to unsubstantiated noncash charitable donations. TIGTA found that IRS controls were not sufficient to ensure 

taxpayer compliance with non-cash charitable contribution reporting requirements. 

Taxpayers who do not comply with the reporting requirements could be incorrectly reducing 

their tax liabilities and receiving tax refunds to which they are not entitled. 

•	 Audit Fraud Indicators - TIGTA estimates that taxpayers may have avoided additional 

assessments totaling approximately $5.8 million ($29 million over five years) in civil fraud 

penalties. Based on a sample of 100 office audits, TIGTA identified 26 audits with fraud 

indicators that were not recognized and investigated in accordance with key IRS procedures 

and guidelines. When the sample results were projected, it was estimated that fraud 

indicators were not recognized and investigated in approximately 939 office audits during 

FY 2010. 

TIGTA - 22
 
 

 

 

 

 

 

 

 

 

 

•	 AirCard and BlackBerry® Access fees - Improved policies and procedures can result in cost 

savings of $5.9 million over five years. TIGTA found that cost savings can be achieved if 

the IRS ensures that only those employees with a valid business need are assigned an aircard 

and/or BlackBerry®, and provides more effective oversight and monitoring of these devices. 

Description of Performance: 

TIGTA uses two performance measures to gauge the success of the audit program performance. 

The first measure indicates that TIGTA’s products are more likely to be used if they are 

delivered when needed to support congressional and IRS decision making. To determine 

whether products are timely, TIGTA tracks the percentage of products that are delivered on or 

before the date promised (contract date). 

Additionally, TIGTA makes recommendations designed to improve the administration of the 

Federal tax system. The IRS must implement these recommendations to realize the financial or 

non-financial benefits. This second measure assesses TIGTA’s effect on improving the IRS’s 

accountability, operations, and services. Since the IRS needs time to act on recommendations, 

TIGTA uses the Department of the Treasury’s Joint Audit Management Enterprise System to 

track the percentage of recommendations made four years ago that have been implemented, 

rather than the results of the activities during the fiscal year in which the recommendations are 

made. TIGTA tracks recommendations that have not been implemented by the IRS and has a 

formal process with the IRS to close out unimplemented recommendations where circumstances 

may have changed, or when the IRS has taken alternative corrective measures that address 

TIGTA’s audit findings. 

In FY 2013, the actual percentage of audit products delivered when promised to stakeholders 

was 84 percent against a full-year target of 70 percent. TIGTA exceeded this target as a result of 

ongoing supervisory monitoring of the execution of audits to ensure timely audit products to 

stakeholders. The actual percentage of recommendations made that have been implemented was 

87 percent against a full-year target of 85 percent. TIGTA exceeded its target as a result of 

continued discussions with the IRS throughout the audit process, both on the findings and on 

potential recommended solutions, to better ensure that feasible alternatives were identified. For 

FY 2014, TIGTA lowered its target for timely delivery of audit products to reflect increased 

vacancies resulting from the FY 2013 hiring freeze. The hiring freeze, which has delayed 

recruitment for key audit positions, requires TIGTA to utilize acting roles for frontline managers 

and executive-level positions, resulting in extensive transition within TIGTA. For FY 2015, the 

target for percentage of audit products delivered when promised to stakeholders is 68 percent. 

The target for percentage of recommendations made that have been implemented is 85 percent. 

TIGTA - 23
 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

3.1.1 – Audit Budget and Performance Plan 

Dollars in Thousands

Audit Budget Activity

Resource Level FY 2008 FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 

Appropriated Resources

Reimbursable Resources

Actual 

$52,959 

$400 

Actual 

$55,186 

$539 

Actual 

$57,421 

$529 

Actual 

$57,306 

$351 

Actual 

$57,306 

$0 

Operating 

Plan 

$54,309 

$600 

Enacted 

$60,850 

$600 

Request 

$61,264 

$600 

Budget Activity Total $53,359 $55,725 $57,950 $57,657 $57,306 $54,909 $61,450 $61,864 

Measure FY 2008

Actual

FY 2009

Actual

FY 2010

Actual

FY 2011

Actual

FY 2012

Actual

FY 2013

Actual

FY 2014

Target

FY 2015

Target

Percentage of Audit Products 

Delivered when Promised to 

Stakeholders 

65.0 81.0 76.0 68.0 71.0 84.0 65.0 68.0

Percentage of 

Recommendations Made that 

Have Been Implemented 

84.0 91.0 95.0 93.0 94.0 87.0 85.0 85.0

Key: DISC - Discontinued and B – Baseline

3B – Investigations 

($96,155,000 from direct appropriations, and $900,000 from reimbursable resources): 

While most offices of Inspectors General focus primarily on waste, fraud, and abuse, TIGTA’s 

mission is more extensive. TIGTA’s statutory responsibility includes protecting the integrity of 

tax administration while protecting the IRS’s most valuable resource, its employees. 

TIGTA’s investigative resources are allocated based upon a performance model that focuses on 

three primary areas of investigation: 

• Employee integrity; 

• Employee and infrastructure security; and 

• External attempts to corrupt tax administration. 

TIGTA - 24
 
 

 

 

 

 

 

 

 

 

 

TIGTA’s INVESTIGATIVE MISSION

Employee

Integrity 

Criminal & 

Administrative 

Investigations 

Integrity

Program 

Complaints

Processed 

Bribery

(Non-Employee) 

External 

Attempts

To Corrupt Tax

Administration 

Manipulation/ Fraud & Other 

Corruption of IRS Nexus-Related 

Systems Crimes 

Threat & Assault 

Investigations 

Computer Intrusion

Security Systems 

TIGTA INVESTIGATIONS 

Employee &

Infrastructure 

Security 

Threat
 

Assessments &
 

Security Advisories
 

Figure 3: TIGTA's Investigative Mission 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The performance model (Figure 3) results in reliable statistical data that is used to make 

mission-critical decisions regarding staffing, budgeting, and training. The performance model 

utilizes a ratio of those investigations that have the greatest impact on IRS operations or the 

protection of Federal tax administration to the total number of investigations conducted. These 

performance measures guide OI’s activities and help to demonstrate the value of investigative 

accomplishments to external stakeholders. 

Employee Integrity: IRS employee misconduct, real or perceived, erodes public trust and 

impedes the IRS’s ability to effectively enforce tax laws. This misconduct manifests itself in a 

variety of ways, including misuse of IRS resources or authority, theft, fraud, extortion, taxpayer 

abuses, and unauthorized access to, and disclosure of, tax return information. During FY 2013, 

50 percent of TIGTA’s investigative body of work involved alleged employee misconduct. 

TIGTA’s special agents possess the knowledge, skills, and expertise to investigate such matters. 

TIGTA’s efforts convey a message to IRS employees that these types of activities will not go 

unchecked. 

TIGTA promotes employee integrity by conducting proactive investigative initiatives to detect 

criminal and serious misconduct in the administration of IRS programs. During FY 2013, 

TIGTA initiated 77 proactive investigative initiatives to detect systemic weaknesses or potential 

IRS program vulnerabilities. A recent investigative focus identified seasonal IRS employees 

who continued to receive unemployment benefits after being recalled to work from furlough 

status by the IRS, resulting in dozens of arrests of IRS employees for this fraud. 

TIGTA received 9,339 complaints and opened 3,326 investigations in FY 2013. During this 

time period, TIGTA also closed 3,266 investigations, which included 1,368 cases of employee 

misconduct referred for IRS action and 152 cases accepted for criminal prosecution. As a result 

TIGTA - 25
 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

of a TIGTA investigation, a GS-15 IRS information technology specialist10 was sentenced to 

prison11 for time and attendance fraud.12 

Employee and Infrastructure Security: During FY 2013, TIGTA responded to 2,750 threatrelated incidents. Tax revenue is critical to our Nation’s infrastructure. Threats and assaults 

directed at IRS employees, facilities, data, and computer systems impede the effective 

administration of the Federal tax system. TIGTA has a statutory responsibility to identify, 

investigate, and respond to threats against IRS personnel and physical infrastructure. 

TIGTA’s authority to investigate threats and assaults is derived from the provisions of Title 26 

U.S.C. § 7608(b), authority of internal revenue enforcement officers; the Internal Revenue 

Service Restructuring and Reform Act of 1998 (RRA 98); the Inspector General Act of 1978, as 

amended, the Inspector General Reform Act of 2008; and is further summarized in Treasury 

Order 115-01. All reports of threats, assaults, and forcible interference against IRS employees 

performing their official duties are referred to the Office of Investigations. TIGTA has the 

necessary authority to access taxpayer information in support of ongoing investigations, 

including tax matters related to threats and assaults involving the IRS. 

Over the past several years, the United States has experienced numerous violent incidents in 

schools, private offices, and public areas. These tragic events are unpredictable and result in 

numerous innocent people losing their lives or being severely injured. Despite the declining 

number of TIGTA special agents, TIGTA has processed over 8,600 threat-related complaints and 

investigated over 4,000 threats against IRS employees in FY 2009 through FY 2012. 

For example, in January 2013, an Alaskan couple was sentenced to 25 years13 for the husband 

and 12 years14 for the wife of imprisonment for their role in a conspiracy to kill an IRS Revenue 

Officer and a United States District Court Judge engaged in the performance of their official 

duties.15 In another example, two Georgia men were sentenced to five years of imprisonment16 

for obtaining an illegal explosive device as part of a conspiracy17 to attack IRS employees18 and 

Federal Government buildings.19 

TIGTA’s partnership with the IRS’s Office of Employee Protection (OEP) to identify potentially 

dangerous taxpayers (PDTs) is one example of TIGTA’s commitment to collaborating with the 

IRS and protecting IRS employees. If a taxpayer has been designated as potentially dangerous, 

TIGTA conducts a follow-up assessment of the taxpayer after five years and provides the IRS’s 

10 D. Md. Indict. Filed July 16, 2012. 11 D. Md. Judgment filed April 19, 2013. 12 Id. 13 D. Alaska Judgment filed January 8, 2013.
 14 D. Alaska Judgment filed January 8, 2013.
 15 D. Alaska Judgment (Karen Vernon) filed January 8, 2013; D. Alaska Judgment (Lonnie Vernon) filed
 

January 8, 2013; D. Alaska First Superseding Indict. Filed March 17, 2011; and D. Alaska Third Superseding
 

Indictment filed January 20, 2012.

16 N.D. Ga. Judgment filed August 22, 2012.
 17 N.D. Ga. Guilty Plea and Plea Agr. Filed April 10, 2012.
 18 N.D. Ga. Criminal Complaint filed April 10, 2012.
 19 N.D. Ga. Criminal Indictment filed November 3, 2011.
 

TIGTA - 26
 
 

 

 

 

 

 

 

OEP with information to determine if the taxpayer still poses a danger to IRS employees. 

TIGTA’s special agents are responsible for providing physical security, known as “armed 

escorts,” to IRS employees in dangerous situations. TIGTA’s special agents escort IRS 

employees when they require personal contact with a PDT. These armed escorts provide a safe 

environment for the IRS employee to conduct tax administration activities. 

External Attempts to Corrupt Tax Administration: TIGTA is statutorily mandated to 

investigate external attempts to corrupt tax administration, which includes criminal misconduct 

by non-employees, such as attempted bribery of IRS employees and the impersonation of the 

IRS. A large portion of IRS employees are in direct contact with taxpayers and often encounter 

situations where a taxpayer may challenge the employee’s integrity by offering a bribe. Bribery, 

or attempted bribery, of a public official is a criminal offense and it is an attack on the integrity 

of the entire IRS organization and the Nation’s system of tax administration. TIGTA is currently 

investigating a nationwide IRS impersonation scheme in which criminals are pretending to be 

employees of the IRS and are attempting to collect phantom tax liabilities from innocent 

taxpayers. TIGTA received thousands of reports of this type of contact over the last three 

months of CY 2013. 

TIGTA - 27
 
! ! ! ! ! ! ! !

! ! ! ! ! ! !

! ! ! ! ! ! ! !

 

 

 

 

 

 

 

Dollars in Thousands

Investigations Budget Activity

Resource Level FY 2008 FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 

Actual Actual Actual Actual Actual Operating Enacted Request 

Plan 

Appropriated Resources $87,574 $90,897 $94,579 $94,694 $94,390 $89,452 $95,525 $96,155
 

Reimbursable Resources $500 $318 ($442) $949 $0 $647 $1,100 $900
 

Budget Activity Total $88,074 $91,215 $94,137 $95,643 $94,390 $90,099 $96,625 $97,055
 

Measure FY 2008 FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015

Actual Actual Actual Actual Actual Actual Target Target

Percentage of Results from 78.0 83.0 86.0 82.0 89.0 90.0 77.0 81.0

Investigative Activities 

Key: DISC - Discontinued and B – Baseline

 

 

 

 

 

 

 

 

 

 

 

 

Recoveries

FY 2012 FY 2013

$158 160

140

Monetary Recoveries)

(In)Millions)

120

100

80 $64.7) 60 $47.9)

40

20 $12.7) 0

FY 2010 FY 2011

Figure 4: Contract Fraud Recoveries 

With adequate FY 2015 resources, TIGTA will have the necessary staffing to ensure these 

criminal acts are promptly investigated. Another key aspect of protecting the integrity of tax 

administration in today’s environment is the oversight and investigation of IRS procurement 

matters. On average, the IRS awards approximately 900 contracts each year worth 

approximately $31 billion in total contract value.20 A 2012 Association of Certified Fraud 

Examiners report21 estimated that 5 percent of an organization’s revenue is at risk of fraud on an 

annual basis. In the case of the IRS, this projection translates to approximately $1.6 billion. 

TIGTA focuses its contract fraud 

investigations on violations of the False 

Claims Act22 and associated criminal 

statutes. Each year, TIGTA brings in 

millions of dollars (Figure 4) to the 

Nation’s treasury through court-ordered 

settlements and recoveries. With FY 2015 

resources, TIGTA could proactively 

identify and address procurement fraud 

risks in IRS programs to help ensure that 

the IRS and taxpayers receive full value for 

the billions of contracting dollars spent. 

3.1.2 – Investigations Budget and Performance Plan 

20 The total dollar value of a contract over the life of the contract.
 21 Association of Certified Fraud Examiners, “Report to the Nations on Occupational Fraud and Abuse,” 2012.
 22 31 U.S.C. §§ 3729 - 3733
 

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Description of Performance: 

TIGTA’s investigative performance model is a ratio of those investigations that have the greatest 

impact on IRS operations or the protection of Federal tax administration to the total number of 

investigations conducted. These performance measures guide OI’s activities and help to 

demonstrate the value of investigative accomplishments to external stakeholders. The 

performance model provides reliable statistical data, which is used to make mission-critical 

decisions regarding investigative staffing, budgeting, and training. 

From FY 2010 to FY 2013, TIGTA’s performance goal remained at 79 percent. TIGTA lowered 

the FY 2014 performance goal to reflect increased job vacancies and the uncertainty resulting 

from the FY 2013 hiring freeze. This budget request will provide funding for TIGTA to enhance 

its performance of investigative activities. 

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Section 4 – Supplemental Information 

4A – Summary of Capital Investments 

Secure Information and Technology (IT) Mobility 

As threats against the tax system continue to rise and evolve, TIGTA has made strategic 

investments to increase the mobility of TIGTA employees so that they can continue to work 

effectively wherever the need or threat dictates. Deployment of secure wireless computer 

networking infrastructure for the two major wireless technologies, specifically broadband 

(cellular) and Wi-Fi, are two such technologies enabled. Wireless communication has certain 

inherent risks, which, given the taxpayer privacy issues represented by the data that TIGTA uses 

and maintains, must be carefully managed. These capabilities are enabled with TIGTA-issued 

Homeland Security Presidential Directive-12 Personal Identity Verification cards which are 

required for access. The next iteration in the technical evolution is to examine and deploy a 

limited number of handheld devices that can be safely attached to the TIGTA domain and 

interact with its systems. While originally planned for technical investigation and feasibility 

analysis in FY 2013, budget reductions resulting from sequestration, rescission, and other 

business driven priorities did not permit any activity. Assuming that FY 2014 priorities and 

funding unfold as planned, all the initial determinations have been made. One benefit of the 

delay is that the technology ensuring the security of the device and the data continues to mature. 

This may facilitate pilot and any initial deployment efforts. The intent is to further enhance the 

flexibility, responsiveness, collaboration, and effectiveness of the TIGTA workforce. 

Server and Storage Infrastructure 

Far in advance of directives advising server consolidation and cloud technologies, TIGTA has 

been a leader in server virtualization and, because of the sensitivity of the data it handles, 

provides a “private cloud” style computing environment. In FY 2013 and FY 2014, TIGTA 

refreshed its server and storage area network with updated technology that is more energy 

efficient and cost effective. The virtualized infrastructure provides more computing power at 

lower cost with greater capability and provides increased resilience and availability. Early in 

FY 2014, TIGTA physically relocated its host infrastructure to the IRS Enterprise Computing 

Center in Martinsburg, WV. This initiative was in direct support of efforts to reduce TIGTA’s 

physical and carbon footprint and aligns with Treasury IT goals. 

Refreshed Applications and Collaboration Environment 

TIGTA continues its leadership in its use of collaborative tools that enable capture, storage, 

editing, distribution, and collaboration across the enterprise. As the platform approached 

end-of-life, near the end of FY 2013, TIGTA began the difficult and time-consuming process of 

updating the capability. Through FY 2014 and into FY 2015, TIGTA is building upon prior 

iterations and intends to incorporate new capabilities and feature sets into the sites that migrate to 

the modernized environment. Examination and evaluation of the requirements for legacy and 

new applications are expected to be substantially completed. This budget will allow TIGTA to 

continue investing in more powerful and more robust capabilities. 

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 Capital Investments 

IT Governance and Total Cost of Ownership 

In FY 2010, TIGTA established its new IT governance program. All new IT requests pass 

through a Change Management Board chaired by the Chief Information Officer. Requests 

requiring cross-functional activity or support, presenting high risk or significant cost, among 

other factors, are elevated to the Program Management Board (PMB) chaired by the Associate 

Inspector General for Mission Support and with representatives from all of the TIGTA functional 

units. Requests must present a total cost picture, a positive business case, and a high-level work 

breakdown schedule that are adjusted for risks, to gain PMB approval to commence work. 

Projects involving substantial financial commitments or high mission visibility require approval 

from the Investment Review Board, composed of TIGTA's senior executives. Refinements to the 

process are ongoing as projects evolve and the knowledge and experience base of the PMB 

grows. 

By the end of FY 2013, TIGTA had extended its new governance process to all TIGTA 

functional units to help manage projects and priorities. Under TIGTA’s program-management 

process, milestones for all projects are established and tracked. At any point, projects that have 

cost overruns, are behind schedule, or are not delivering at anticipated business performance 

levels, are analyzed for cause. 

Law Enforcement Vehicles 

Effective FY 2014, TIGTA acquired its vehicles by lease through GSA. However, TIGTA will 

maintain ownership of approximately ten (10) surveillance/communications vehicles. These ten 

vehicles will remain part of TIGTA’s capital asset strategy. The vehicles will be used to support 

TIGTA’s investigations and must meet the mission critical need to conduct criminal law 

enforcement activities. TIGTA communications vehicles will also be used in support of 

TIGTA’s Continuity of Operations (COOP) Program. COOP provides a mechanism for the 

organization to recover full operational capabilities, which includes the ability to communicate 

during a local or national emergency. 

A summary of capital investment resources, including major information technology and nontechnology investments, can be viewed/downloaded at: http://www.treasury.gov/about/budgetperformance/Pages/summary-of-capital-investments.aspx 

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