Department of the Treasury

Treasury Inspector General for 

Tax Administration

Congressional Budget

Justification and Annual 

Performance Plan and Report

FY 2020
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Table of Contents

Section I – Budget Request........................................................................................................... 3

A – Mission Statement................................................................................................................ 3

B – Summary of the Request ...................................................................................................... 3

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

1.2 – Budget Adjustments Table................................................................................................. 4

C – Budget Increases and Decreases Description....................................................................... 4

1.3 – Operating Levels Table...................................................................................................... 5

D – Appropriations Language and Explanation of Changes ...................................................... 5

E – Legislative Proposals............................................................................................................ 6

Section II – Annual Performance Plan and Report................................................................... 7

A – Strategic Alignment ............................................................................................................. 7

B – Budget and Performance by Budget Activity ...................................................................... 8

2.1.1 – Audit Resources and Measures....................................................................................... 8

Audit Budget and Performance................................................................................................... 8

2.1.2 – Investigations Resources and Measures........................................................................ 11

Investigations Budget and Performance ................................................................................... 11

Key Accomplishments and Budget Savings............................................................................. 13

Office of Inspections and Evaluations Highlights.................................................................... 14

Section III – Additional Information ........................................................................................ 15

A – Summary of Capital Investments....................................................................................... 15
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Section I – Budget Request

A – Mission Statement

Provide quality professional audit, investigative, and inspection and evaluation services that 

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

B – Summary of the Request

The Treasury Inspector General for Tax Administration’s (TIGTA) Fiscal Year (FY) 2020

budget request of $166,000,000 represents a decrease of 2.1 percent below its FY 2019

Annualized Continuing Resolution (CR) budget. Funding TIGTA’s FY 2020 budget request will 

enable TIGTA to attempt to address its expansive workload of emerging Internal Revenue 

Service (IRS) challenges and congressional requests while conducting its oversight 

responsibilities. These resources will fund critical audit, investigative, and inspection and 

evaluation 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),1 TIGTA submits the following information related to its FY 2020 budget request:

• The aggregate budget request for TIGTA operations is $166,000,000;

• The portion of the request needed for TIGTA training is $1,800,000; and

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

Integrity and Efficiency is $431,600.

TIGTA’s vision is to maintain a highly skilled, proactive, and diverse Inspector General 

organization dedicated to working in a collaborative environment with key stakeholders to foster 

and promote fair tax administration. TIGTA’s primary functions of audit, investigations, 

inspections and evaluations align with the following Department of the Treasury FY 2018 –

FY 2022 Strategic Plan goals:

• Goal 1: Boost U.S. Economic Growth;

• Goal 4: Transform Government-wide Financial Stewardship; and

• Goal 5: Achieve Operational Excellence.

For more on how TIGTA’s budget activities align with the Department of the Treasury goals and 

objectives see Section II in this document.

TIGTA’s Strategic Goals:

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

• Protect the integrity of tax administration from internal and external threats; and 

• Sustain an inclusive work environment where employees are valued. 

TIGTA’s work is focused on all aspects of activity related to the Federal tax system as 

administered by the IRS. TIGTA identifies and addresses IRS management challenges and the 

priorities of the Department of the Treasury. TIGTA protects the public’s confidence in the tax 

system. 

 1 5 U.S.C. app. 3 § 6(f)(1). 
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1.1 – Appropriations Detail Table

Dollars in Thousands

Treasury Inspector General 

for Tax Administration FY 2018 * FY 2019 FY 2020 FY 2019 to FY 2020

Appropriated Resources Enacted Annualized CR Request Change % Change

New Appropriated Resources FTE AMOUNT FTE AMOUNT FTE AMOUNT FTE AMOUNT FTE AMOUNT

Audit 318 $66,020 333 $66,020 333 $64,606 0 ($1,414) 0.00% -2.14%

Investigations 446 $103,614 467 $103,614 467 $101,394 0 ($2,220) 0.00% -2.14%

Subtotal New Appropriated 

Resources 764 $169,634 800 $169,634 800 $166,000 0 ($3,634) 0.00% -2.14%

Other Resources

 Reimbursables 2 $414 2 $600 2 $600 0 $0 0.00% 0.00%

Recovery from Prior Years $1,831 $0 $0 0 $0 NA NA

Unobligated Balances 

Brought Forward $4,300 $4,400 $5,000 0 $600 NA 13.64%

Subtotal Other Resources 2 $6,545 2 $5,000 2 $5,600 0 $0 0.00% 12.00%

Total Budgetary Resources 766 $176,179 802 $174,634 802 $171,600 0 ($3,034) 0.00% -1.74%

* FY 2018 FTE and Other Resources are Actuals. This column reflects levels appropriated in P.L. 115-141, the Consolidated 

Appropriations Act of 2018. For further details on the execution of these resources see the 2020 Budget Appendix chapter for the 

Department of the Treasury.

1.2 – Budget Adjustments Table

Dollars in Thousands

Treasury Inspector General for Tax Administration FTE Amount

FY 2019 Annualized CR 800 $169,634 

Changes to Base:

Maintaining Current Levels (MCLs): 0 $558 

Non-Pay 0 $558 

Subtotal Changes to Base 0 $558 

FY 2020 Base 800 $170,192 

Program Changes:

Program Decreases: 0 ($4,697)

Non-Personnel Reductions 0 ($4,697)

Program Increases: 0 $505 

Operation and Maintenance (O&M) of Prior-year 

Enterprise-wide Cybersecurity Investments 0 $505 

Subtotal FY 2020 Program Changes 0 (4,192)

Total FY 2020 Request 800 $166,000 

C – Budget Increases and Decreases Description

Maintaining Current Levels (MCLs) ..........................................................+$558,000 / +0 FTE

Non-Pay +$558,000 / +0 FTE

Funds are requested for non-labor expenses such as travel, contracts, rent, supplies, 

and equipment.

Program Decreases ....................................................................................-$4,697,000 / -0 FTE

Non-Personnel Reductions -$4,697,000 / +0 FTE

TIGTA will reduce program levels in order to meet its FY 2020 budget request. Reaching this 

target without impacting the quality of TIGTA’s programs will require balancing mission 

requirements and workload.
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TIGTA will continue to look for contract efficiencies by evaluating contracts for strategic 

sourcing and by negotiating more advantageous contract terms. Additionally, TIGTA will 

continue to pursue opportunities to reduce its footprint and lower its rent costs. 

Program Increases .........................................................................................+$505,000 / +0 FTE

O&M of Prior-year Enterprise-wide Cybersecurity Investments +$505,000 / +0 FTE

The FY 2020 request includes funding to support O&M for prior year cybersecurity

Enhancement Account investments. O&M will be funded by Treasury Bureaus through 

Treasury Franchise Fund billing. This increase represents the bureau’s portion of the $17.5 

million O&M total.

1.3 – Operating Levels Table

Dollars in Thousands

Treasury Inspector General for Tax Administration FY 2018 FY 2019 FY 2020

Object Classification Enacted Annualized CR Request

11.1 - Full-time permanent 86,873 86,851 86,851

11.3 - Other than full-time permanent 393 393 393

11.5 - Other personnel compensation 8,332 8,330 8,330

11.9 - Personnel Compensation (Total) 95,598 95,574 95,574

12.0 - Personnel benefits 37,662 37,652 37,652

13.0 - Benefits for former personnel 0 0 0 

Total Personnel and Compensation Benefits $133,260 $133,226 $133,226

21.0 - Travel and transportation of persons 3,794 3,798 3,794 

22.0 - Transportation of things 15 15 16 

23.1 - Rental payments to GSA 9,600 9,608 9,600 

23.2 - Rental payments to others 200 200 200 

23.3 - Communications, utilities, and miscellaneous charges 740 741 360 

24.0 - Printing and reproduction 8 8 8

25.1 - Advisory and assistance services 1,800 1,802 2,205 

25.2 - Other services from non-Federal sources 1,000 1,001 900 

25.3 - Other goods and services from Federal sources 11,090 11,100 9,300

25.4 - Operation and maintenance of facilities 16 16 17

25.7 - Operation and maintenance of equipment 2,989 2,992 1,634

26.0 - Supplies and materials 700 701 540

31.0 - Equipment 4,298 4,302 4,101

42.0 - Insurance claims and indemnities 5 5 4

91.0 - Unvouchered 119 119 95 

Total Non-Personnel $36,374 $36,408 $32,774

New Budgetary Resources $169,634 $169,634 $166,000 

FTE 764 800 800

Note: This table includes obligations against funding appropriated in that year (Enacted for FY 2018, FY 2019 Annualized CR, 

and FY 2020).

 
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D – 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 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; $166,000,000, of 

which $5,000,000 shall remain available until September 30,

2021; 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.

Note.—A full-year 2019 appropriation for this account was not 

enacted at the time the budget was prepared; therefore, the 

budget assumes this account is operating under the Continuing 

Appropriations Act, 2019 (Division C of P.L. 115–245, as 

amended). The amounts included for 2019 reflect the annualized 

level provided by the continuing resolution.

E – Legislative Proposals

TIGTA has no legislative proposals.
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Section II – Annual Performance Plan and Report

A – Strategic Alignment

TIGTA, an independent office within the Department of the Treasury, was established by 

Congress under the Internal Revenue Service Restructuring and Reform Act of 1998 (RRA 98).2 

It provides independent oversight of IRS activities by conducting independent audits, 

investigations, and inspections and evaluations necessary to prevent and detect waste, fraud, and 

abuse in IRS programs and operations. TIGTA conducts audits of the IRS’s operations and 

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 data. TIGTA also has the unique 

responsibility of protecting the IRS and its employees. TIGTA’s role is important given the 

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

Government’s accountability and efficient use of resources. 

TIGTA’s budget activities align with its vision and goals and with the Department of the 

Treasury’s FY 2018 – FY 2022 Strategic Plan, including objectives under the following goals:

Goal 1: Boost U.S. Economic Growth

Objective 1.1 – Tax Law Implementation: Administer tax law to better enable all taxpayers to 

meet their obligations, while protecting the integrity of the tax system.

TIGTA supports the Treasury strategic objective “Tax Law Implementation” under Goal 1 

through its oversight of Treasury’s efforts to implement the Tax Cuts and Jobs Act of 2017 

(TCJA) and by protecting of the integrity of Federal tax administration. Implementation of the 

sweeping changes included in TCJA necessitated TIGTA oversight to ensure the IRS timely and 

accurately addresses requirements to update tax forms, instructions and publications, as well as 

to reprogram its computer systems to ensure that tax returns are accurately processed based on 

the new legislation. This oversight is accomplished through discretionary audit coverage and by 

monitoring progress on addressing the major management and performance challenge of 

“Implementing the Tax Cuts and Jobs Act and Other Law Changes.”

Goal 4: Transform Government-wide Financial Stewardship

Objective 4.1 – Financial Data Access/Use: Increase the access and use of Federal financial data 

to strengthen Government-wide decision-making, transparency, and accountability. 

TIGTA supports the Department of the Treasury’s Digital Accountability and Transparency Act

efforts by implementing the related policies and requirements. Many of TIGTA’s audits include 

recommendations that, when implemented, would result in cost savings, increased or protected 

revenue, or more efficient use of resources. Additionally, TIGTA develops advanced analytics 

and innovative approaches to help prevent and detect the flow of dollars fraudulently obtained by 

criminals or IRS employees and provides the IRS with the investigative coverage and 

information necessary to mitigate domestic and foreign threats against its employees, facilities, 

and data systems. 

 2 Pub. L. No. 105-206, 112 Stat. 685.
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Goal 5: Achieve Operational Excellence 

Objective 5.1 – 5.3 Workforce Management, Treasury Infrastructure, and Customer Value.

TIGTA hires and develops a workforce with the skills and competencies necessary to accomplish 

its mission to provide quality professional audit, investigative, and inspection and evaluation 

services related to the administration of the Nation’s tax system. TIGTA mitigates security risks 

affecting taxpayer data, tax systems, and IRS employees. It effectively improves customer value 

by protecting the IRS and its employees and responding to attempts to impersonate the IRS for 

fraudulent purposes. TIGTA prioritizes acquisition and application of human and financial 

resources to enhance its ability to detect and protect against cyber-attacks. Additionally, TIGTA 

collaborates with the IRS to share intelligence and expertise to thwart cyberthreats.

B – Budget and Performance by Budget Activity

2.1.1 – Audit Resources and Measures

Dollars in Thousands

 Resource Level FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 FY 2020

Actual Actual Actual Actual Actual Annualized 

CR Request

Appropriated Resources $53,763 $57,463 $59,752 $64,240 $61,099 $66,020 $64,606 

Reimbursable Resources $600 $382 $60 0 0 0 0

Unobligated Balances Brought Forward 0 $1,808 $1,780 $1,524 $1,674 $1,712 $1,946 

Budget Activity Total $54,363 $59,653 $61,592 $65,764 $62,773 $67,732 $66,552 

FTE 309 316 329 333 318 333 333

Performance Measure

FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2018 FY 2019 FY 2020

Actual Actual Actual Actual Actual Target Target Target

Percentage of Audit 

Products Delivered When 

Promised to Stakeholders

65 80 75 79 81 68 68 70

Percentage of 

Recommendations Made 

That Have Been 

Implemented

89 92 97 92 85 85 85 85

Audit Budget and Performance

($64,606,000 from direct appropriations):

TIGTA’s Office of Audit (OA), 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 program incorporates both statutory audit 

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

audit work is concentrated on high-risk areas and on the IRS’s progress in achieving its strategic 

goals. TIGTA strategically evaluates IRS programs, activities, and functions, so that resources 

are spent in the areas of highest vulnerability of the Nation’s system of tax administration. 

In FY 2018, OA issued 102 final audit reports, and other products, that included potential 

financial benefits totaling approximately $9.9 billion and affected approximately 2.6 million

taxpayer accounts. TIGTA’s Annual Audit Plan communicates its 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 detection and 

prevention, security of taxpayer data, tax compliance, tax law changes, fraudulent claims and 
TIGTA - 9

improper payments, tax systems and online services, and globalization. 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.

By focusing on the most critical high-risk areas, TIGTA’s recommendations not only result in 

cost savings but also have other quantifiable impacts, such as the protection of existing revenue, 

increased revenue, and reduction of the number of fraudulent refunds and improper payments.

TIGTA’s reports for FY 2018 addressed issues that included:

• Identity Theft - Since TIGTA’s first business identity-theft report in September 2015, the 

IRS has created business identity-theft filters and selection lists to identify potential business 

identity-theft returns. However, during a recent review, TIGTA found that certain types of 

business tax returns are not being evaluated for potential identity theft. In Processing Year 

2017, TIGTA identified 15,127 business tax returns with refunds totaling more than $200 

million that would have been identified as potentially fraudulent if current business identitytheft filters were applied to these tax returns. TIGTA also reported that the IRS needs to take 

actions to protect refunds associated with confirmed business identity theft from being 

erroneously released. TIGTA identified 872 business tax returns identified by the IRS as 

identity-theft returns in Processing Year 2016 for which refunds totaling more than $61 

million appear to have been released in error.

• Filing Season - TIGTA conducted a review to evaluate whether the IRS timely and 

accurately processed individual paper and electronically filed tax returns during the 2017

Filing Season. The Office of Audit found that the IRS generally developed processes to 

implement key tax provisions affecting the 2017 Filing Season. The IRS processed 5.1 

million tax returns that reported nearly $23.9 billion in Premium Tax Credits that were either 

received in advance or claimed at the time of filing. However, TIGTA found that taxpayers 

received $5.8 billion in Advance Premium Tax Credits to which they were not entitled, of 

which $3.5 billion was not required by law to be repaid. 

• Improving Tax Compliance - To enhance its enforcement actions, the IRS implemented the 

Private Debt Collection (PDC) program, to collect inactive tax receivables that the IRS 

previously could not collect. The Joint Committee on Taxation estimated that the current 

PDC program would yield approximately $2.4 billion in additional revenue through 

FY 2025. TIGTA reported as of May 31, 2018, that the PDC program generated $56.6 

million in revenue compared to $55.3 million in costs for an approximate net profit of $1.3 

million. The Private Collection Agencies (PCA) collected just 1 percent of the $4.1 billion 

assigned. Possible causes of the nominal collection yield could be the average age of the 

cases assigned (4 years), assignment of low-income taxpayers (54 percent of PDC inventory), 

lack of consequences for subsequent noncompliance, or taxpayers who willfully failed to 

pay. Other PDC program concerns include the lack of a referral unit, the reliance on PCAs to 

self-report complaints, authentication procedures that expose taxpayers to risk, and PDC 

communication strategies that differ from IRS communications regarding tax scams.

• Achieving Program Efficiencies and Cost Savings - After payroll, rent is the IRS’s largest 

operating expense, which the IRS expected to spend more than $600 million on real estate 

costs in FY 2018. Since March 2012, the IRS has taken steps to reduce its total office space 
TIGTA - 10

by nearly 8 percent by either closing or consolidating office spaces. Although progress has 

been made, the rate of employee attrition has outpaced office space reduction efforts. The 

IRS’s workstation utilization rate was only 66 percent as of December 2017. TIGTA 

reported that changing the method by which the IRS develops and implements its space 

reduction projects to incorporate more effective workstation and office sharing could reduce 

the need for as many as 10,473 workspaces. By releasing these underutilized workspaces 

and the square footage of leased space associated with them, the IRS could achieve more 

than $80 million in rental cost savings over the next five years.

Description of Performance:

TIGTA uses two performance measures to gauge the success of its audit program. 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 decisionmaking. To determine whether products are 

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

promised (contract date).

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

and services. 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. 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 four-year-old recommendations 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 it has a formal process with 

the IRS to close out unimplemented recommendations in situations in which circumstances may 

have changed or when the IRS has taken alternative corrective measures to address TIGTA’s 

audit findings.

At the end of FY 2018, the actual Percentage of Audit Products Delivered When Promised to 

Stakeholders was 81 percent, which exceeded the full-year target of 68 percent. TIGTA 

exceeded this target as a result of ongoing supervisory monitoring of the execution of audits to 

ensure timely delivery of audit products to stakeholders. At the end of FY 2018, the actual 

Percentage of Recommendations Made That Have Been Implemented was 85 percent, which met

the full-year target of 85 percent. TIGTA met its target because of continued discussions with 

the IRS throughout the audit process concerning both the findings and the potential 

recommended solutions, to ensure that feasible alternatives were identified. 

For FY 2020, the target for Percentage of Audit Products Delivered When Promised to 

Stakeholders will increase to 70 percent. The target for Percentage of Recommendations Made 

That Have Been Implemented will remain at 85 percent. TIGTA believes that these measures 

are best attained through effective monitoring of ongoing audit work and essential 

communication with the IRS regarding findings and the most appropriate recommendations for 

corrective action. Consequently, TIGTA’s OA will continue to accentuate the importance of 

these processes with the management cadre and staff.
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2.1.2 – Investigations Resources and Measures

Dollars in Thousands

 Resource Level FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 FY 2020

Actual Actual Actual Actual Actual Annualized 

CR Request

Appropriated Resources $95,748 $101,476 $108,106 $100,819 $107,501 $103,614 $101,394

Reimbursable Resources $1,100 $429 $475 $357 $414 $600 $600 

Unobligated Balances Brought 

Forward 0 $3,192 $3,220 $2,392 $2,626 $2,688 $3,054

Budget Activity Total $96,848 $105,097 $111,801 $103,568 $110,541 $106,902 $105,048

FTE 433 442 460 469 448 469 469

Performance Measure

FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2018 FY 2019 FY 2020

Actual Actual Actual Actual Actual Target Target Target

Percentage of Closed

Investigations Resulting

in a Criminal, 

Administrative, or Law 

Enforcement Action

92 93 90 90 89 79 79 81

Investigations Budget and Performance

($101,394,000) from direct appropriations and $600,000 from reimbursable resources):

In addition to protecting the IRS’s ability to collect the majority of the revenue for the Federal 

Government’s operations, TIGTA, through its Office of Investigations (OI), has the statutory 

responsibility of protecting the integrity of tax administration, as well as 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.

The performance model (Figure 1) uses 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 TIGTA’s investigative accomplishments to its external stakeholders.

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

impedes the IRS’s ability to enforce tax laws effectively. In FY 2018, 48 percent of TIGTA’s 

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

results convey a message to IRS employees that these types of activities will not go unchecked.

TIGTA processed 10,676 complaints, opened 2,588 investigations, and closed 2,573

investigations in FY 2018. During this period, 151 investigations of all types were accepted for 

criminal prosecution, and TIGTA referred for IRS action 1,135 cases of employee misconduct. 

As a result of one of TIGTA’s investigations into employee misconduct, a former IRS special 

agent was sentenced to 51 months’ imprisonment for corrupt interference with the IRS, filing 

Figure 1: Investigative Performance Model
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false tax returns, theft of Government funds, and destruction or falsification of records. In 

another case, a former IRS employee was sentenced to 52 months’ imprisonment, followed by 36 

months’ supervised release for stealing a taxpayer’s identity.

Employee and Infrastructure Security: In FY 2018, TIGTA responded to 1,556 threat-related 

incidents. TIGTA has a statutory responsibility to identify, investigate, and respond to threats 

against IRS personnel and physical infrastructure. TIGTA also believes that, through its 

investigations of threat-related incidents, it is creating a safe and secure environment for 

taxpayers who need to conduct business with the IRS. From FY 2011 through FY 2018, TIGTA 

has processed more than 17,293 threat-related complaints and investigated more than 9,290

threats against IRS employees. After one investigation, a man was convicted for forcibly 

assaulting an unarmed IRS revenue officer by pointing a shotgun at him and threatening to shoot 

him. 

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

investigate external attempts to corrupt tax administration, which include criminal misconduct by 

nonemployees, such as impersonation of the IRS, attempted bribery of IRS employees,

international cybercrime and identity theft, and procurement fraud.

Impersonation Scam: Since summer 2013, a significant part of TIGTA’s workload has 

consisted of investigating a telephone impersonation scam in which a victim receives an 

unsolicited telephone call from a person claiming to be an IRS agent. The caller, using a fake 

name, provides a “badge number” and claims the victim owes taxes and is criminally liable for 

the amount owed. The victim is threatened that if he or she fails to pay the tax immediately, the 

victim will be arrested, a suit will be filed, or some other form of adverse action will be taken. 

As of September 30, 2018, more than 2.4 million Americans have reported that they had received 

one of these calls, and more than 14,700 victims have reported that they had collectively paid 

upwards of $72.8 million to the scammers. As a direct result of TIGTA’s investigative efforts, in 

July 2018, 21 criminal participants in this telephone scam were sentenced to terms of 

imprisonment up to 20 years. In September 2018, 15 defendants and five India-based call 

centers were indicted for their alleged involvement. As of September 30, 2018, a total of 130 

individuals have been charged in Federal court for their roles in the scam.3

International Cybercrime and Identity Theft: The increasing number of data breaches in the 

private and public sectors means more personally identifying information than ever before is 

available to unscrupulous individuals. The Office of Investigations’ highly specialized group of 

criminal investigators with technical expertise in investigating electronic crimes, including 

computer intrusions and Internet-based fraud schemes, will continue to combat cybercriminals. 

In May 2015, the IRS detected the automated exploitation of one of its portals, the “Get 

Transcript” service, which involved the suspicious use of 250,000 identities. The subsequent 

TIGTA investigation confirmed that these were stolen identities being used to secure tax return 

information so that high-quality fraudulent returns could be filed. TIGTA’s OA identified an 

additional 620,000 identities that were also likely compromised, but were not identified by the 

IRS in the initial 250,000. A breach of a second high-profile portal, the Data Retrieval Tool 

 3 The facts in the summarized cases on this page come from court documents of the respective jurisdictions.
TIGTA - 13

utilized in the Federal Student Loan process through the Department of Education, resulted in the 

identification of approximately 100,000 compromised identities in a two-month period in early 

2017. If this exploitation had continued throughout a 12-month period at the same pace, this 

would have resulted in a total of 600,000 stolen identities and related tax information. Between 

these two portals alone, there could have been approximately 1.5 million compromised taxpayer 

identities, which can be sold on the Dark Web and used to open financial accounts and file large 

volumes of fraudulent tax returns. In the last four years, OI’s Cybercrime Investigations 

Division has secured 23 criminal convictions related to attacks on IRS systems for a total of 837 

months’ imprisonment and more than $7.5 million in restitution ordered. Cyberthreats to tax 

professionals will also have an adverse effect on Federal tax administration.

 

Description of Performance:

TIGTA’s OI has adopted performance measures that identify the percentage of results derived 

from investigative activities that most accurately align with the strategic goals of the 

organization and provide the greatest impact on the protection of the integrity of Federal tax 

administration. For FY 2018, OI’s total protection of dollars and financial accomplishments as a 

result of investigative activities was $198.7 million (compared to $38 million in FY 2017). At 

the end of FY 2018, the Percentage of Closed Investigations Resulting in a Criminal, 

Administrative, or Law Enforcement Action was 89 percent, which exceeded the full-year target 

of 79 percent. The Office of Investigations exceeded the FY 2018 performance measure as a 

result of the hard work of experienced executives, managers, and special agents. With the 

FY 2020 budget request, TIGTA will maintain its special agents’ skills and abilities in order to 

be able to respond to its mission requirements.

For FY 2020, OI’s performance target is 81 percent for Percentage of Closed Investigations 

Resulting in a Criminal, Administrative, or Law Enforcement Action. The Office of 

Investigations will continue to provide the IRS with the investigative coverage and information 

necessary to improve the integrity of IRS operations and mitigate threats against its employees, 

facilities, and data systems. In addition, OI will maintain highly-trained personnel available to 

address the significant vulnerabilities of taxpayer and IRS data and effectively combat 

compromises of IRS computer systems in the expanding digital environment of Federal tax 

administration, all of which contribute to maintaining the public’s confidence in the safe, fair, 

and effective administration of the Federal tax system. Through its investigative programs, OI 

will continue to protect the IRS’s ability to process approximately 253 million tax returns, collect 

more than $3.5 trillion in annual revenue, and issue over $464 billion dollars in refunds for the 

Federal Government.4

Key Accomplishments and Budget Savings

While the scope, complexity, and magnitude of the Nation’s economy and deficit continue to

present significant challenges, TIGTA remains one of the best investments in the Federal 

Government. In FY 2018, through targeted and vigorous oversight efforts that addressed

congressional concerns and its own audit and investigative priorities, TIGTA generated overall

potential financial accomplishments of over $10.1 billion.

 4 IRS, Management’s Discussion & Analysis, Fiscal Year 2018.
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During FY 2018, these potential financial accomplishments included:

• Increased and/or protected revenue in the amount of $6 billion;

• Cost savings of $3.7 billion; and

• Significant investigative accomplishments of $199 million.

The phrase “cost savings” includes questioned costs and funds put to better use.

Questioned costs are:

• Costs that cannot be reimbursed because they represent a violation of law, regulation, or 

contract;

• Expenditures that are not reasonable or necessary to accomplish the intended purpose; and

• Costs that are appropriate, but for which the vendor cannot provide proof that the cost was 

incurred.

Funds put to better use are funds that could be used more efficiently or effectively if 

management took actions to implement the recommendation(s), 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 over 

$124 million in court-ordered fines, penalties, and 

restitution.

Funding for TIGTA allows its oversight efforts to 

continue, and for each dollar invested over the five-year 

period covering FY 2014 – FY 2018, TIGTA has produced 

an average annual return of $94 (Figure 2). 

Office of Inspections and Evaluations Highlights

The Office of Inspections and Evaluations (I&E) identifies opportunities for improvement in IRS 

and TIGTA programs by performing inspections and evaluations that report timely, useful, and 

reliable information to decision-makers and stakeholders.

The Office of Inspections and Evaluations provides a range of specialized services and products, 

including quick reaction reviews, on-site office inspections, and in-depth evaluations of major 

functions, activities, or programs. These activities provide TIGTA with additional flexibility, 

capacity, and capability to improve tax administration. Inspections serve to:

• Provide factual and analytical information;

• Monitor compliance;

• Measure performance;

• Assess the effectiveness of programs and operations;

• Share best practices; and

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

Figure 2: TIGTA’s Return on Investment
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Evaluations often result in recommendations to streamline IRS operations, enhance data quality, 

and minimize inefficient and ineffective procedures. In FY 2018, I&E produced seven external 

reports, which included reviews of:

• Physical Security Controls (2 different locations);

• Controls Over Pocket Commissions; 

• Improved Communication With Federal Agencies Could Reduce the Number of Invalid 

Retirement Benefit Statements;

• Worker Misclassification Initiative With the Department of Labor; and 

• Modification to Form 1040 to Increase Earned Income Tax Credit Participation by Eligible 

Tax Filers.

Section III – Additional Information

A – Summary of Capital Investments

Technology Investments – TIGTA has no major Information Technology (IT) investments; 

however, non-major investments include:

• IT Applications and Collaboration – This investment represents an enterprise view of 

TIGTA's applications development that includes system design, development, testing, 

deployment, and maintenance of information applications systems.

• IT Infrastructure End-User Systems and Support – This investment is an enterprise view 

of TIGTA's end-user hardware, peripherals and software, and the Service Desk.

• IT Infrastructure Mainframe and Servers Services and Support – This investment 

represents an enterprise view of TIGTA's servers, including hardware and software 

operations, licensing, maintenance, back-up, continuity of operations, disaster recovery, 

virtualization, and data center consolidation.

• IT Infrastructure Telecommunications – This investment represents an enterprise view of 

TIGTA's data networks and telecommunications hardware and software operations, licenses, 

maintenance, back-up, continuity of operations, and disaster recovery.

• IT Security Systems and Enterprise Architecture – This investment represents TIGTA's 

IT investments responsible for enterprise architecture services.

The Office of Information Technology provides cost-effective and timely IT products and 

services that permit successful completion of TIGTA’s business goals, while at the same time 

meeting legislative and other executive mandates. The following are TIGTA’s FY 2020

prioritized information technology requirements that directly support TIGTA operations:

• Continuous Diagnostics and Mitigation (CDM) – The CDM program is intended to 

provide TIGTA with the capabilities and tools that identify cybersecurity risks on a 

repeatable and recurrent basis, prioritize these risks based upon their potential impact, and 

enable cybersecurity and operational personnel the opportunity to timely address the most 

significant problems. While the Department of Homeland Security carried out the 

acquisition and initial deployment of the various tools for Phase 1, the daily operation, annual 

product licensing, and maintenance costs for the tool suite are TIGTA’s responsibility and 

will continue throughout the future years as new CDM Phases are implemented.

• Network Improvement

o Increased Bandwidth – The bandwidth for TIGTA’s field offices must be upgraded 

to support the increased demand for improved transmission of data, application 
TIGTA - 16

utilization, audio and video conferencing, and more. If this priority is funded, TIGTA 

plans to begin the work in FY 2019 and continue through FY 2020.

o Network Segmentation – The enhancement of a more secure configuration will 

ensure that network data and personally identifiable information will be more readily 

protected against cyber-attacks and leaks. The purpose of network segmentation is to 

increase TIGTA’s overall security and performance posture, which would prevent 

sideways and undetected movement by would-be intruders. If this priority is funded, 

TIGTA plans to begin the work in FY 2019 and continue through FY 2020.

• Research, Analysis, Forensics, and Evidence System (RAFE) – The initial deployment of 

the RAFE is used by TIGTA for cyber analysis, tracking, and defense against potential 

cyberthreats directed at both TIGTA and IRS as well as uncovering evidence of threats to tax 

administration including seizure of hostile hardware and software and analysis of activities 

(e.g., scammers). While the initial phases have been implemented, funding for the remaining 

phases will greatly reduce the chances of an incident that would have a direct, negative 

impact on TIGTA, and its employees. 

Law Enforcement Vehicles –TIGTA acquires its vehicles by lease through the General Services 

Administration. However, TIGTA will maintain ownership of approximately seven

surveillance/communications vehicles. These 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 also are used in support of its Continuity of Operations (COOP) Plan. COOP provides a 

mechanism for the organization to recover fully operational capability following a critical 

incident, including the capability to communicate during a local or national emergency.

A summary of capital investment resources, including major IT and non-technology investments, 

can be viewed and downloaded at:

http://www.treasury.gov/about/budget-performance/Pages/summary-of-capital-investments.aspx

This website also contains a digital copy of this document.