The Treasury Inspector General for Tax Administration

Program Summary by Budget Activity

Dollars in thousands

 FY 2012 FY 2013 FY 2014 FY 2012 TO FY 2014

 Enacted Annualized Request $ Change % Change

Budget Activity CR Rate 

Audit $57,306 $57,656 $58,190 $884 1.54%

Investigations $94,390 $94,968 $91,348 ($3,042) -3.22%

Subtotal, Treasury Inspector General for 

Tax Administration $151,696 $152,624 $149,538 ($2,158) -1.42%

Offsetting Collections - Reimbursables $900 $900 $1,000 $100 11.11%

Total Program Operating Level $152,596 $153,524 $150,538 ($2,058) -1.35%

Direct FTE 835 835 835 0 0.00%

Reimbursable FTE 2 2 2 0 0.00%

Total FTE 837 837 837 0 0.00%

Summary

The FY 2014 President’s Budget request for 

the Treasury Inspector General for Tax 

Administration (TIGTA) will be used to 

continue to provide critical audit, 

investigative, and inspection and evaluation 

services, ensuring the integrity of tax 

administration on behalf of the nation’s 

taxpayers. While there are a number of critical 

areas where TIGTA will provide oversight, 

highlights include: 

 Mitigating risks associated with 

modernization and security, procurement 

fraud, addressing the Tax Gap, 

implementing major tax law changes, and 

human capital challenges facing the IRS in 

domestic and international operations in 

order to identify opportunities to improve 

administrations of the Nation’s tax laws;

 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 and attacks against IRS employees, 

property, data infrastructure, and sensitive 

information;

 Improving the integrity of IRS operations 

by preventing, detecting and deterring 

fraud, waste, abuse or misconduct by IRS 

employees; 

 Conducting comprehensive audits, 

inspections and evaluations that include 

recommendations for monetary benefits, 

addressing erroneous and improper 

payments, and enhancing IRS’s service to

taxpayers; 

 Informing the American people, the 

Congress, and the Secretary of the 

Treasury of problems and progress made to 

resolve them; and

 Overseeing the IRS’s efforts to administer 

tax provisions of the Patient Protection 

and Affordable Care Act, and the Health 

Care and Education Reconciliation Act of 

2010 (ACA).

TIGTA was created by the Congress as a part 

of the Internal Revenue Service Restructuring 

and Reform Act of 1998 (RRA 98). TIGTA’s 

audits, investigations, inspections and 

evaluations protect and promote the fair 

administration of the American tax system. 

TIGTA conducts audits that advise the 

American people, the Congress, the Secretary 
of the Treasury, and IRS management of highrisk issues, problems, and deficiencies related 

to the administration of IRS programs and 

operations. TIGTA’s audit recommendations 

improve IRS systems and operations, while 

maintaining fair and equitable treatment of 

taxpayers. TIGTA’s investigations ensure the 

integrity of IRS employees, contractors, and 

other tax professionals; provide for 

infrastructure security; and protect the IRS 

from external attempts to threaten or corrupt 

the administration of the tax laws. TIGTA’s 

Office of Inspections and Evaluations (I&E) 

provides responsive, timely, and cost-effective 

inspections and evaluations of IRS challenge 

areas. TIGTA’s oversight is essential to the 

efficiency and equity of the IRS’s tax 

administration system. TIGTA ensures that 

taxpayers can have confidence that the IRS 

collects more than $2 trillion in tax revenue in 

an effective and efficient manner.

Total resources required to support TIGTA 

activities for FY 2014 are $150,538,000, 

including $149,538,000 from direct 

appropriation and $1,000,000 from offsetting 

collections and reimbursable programs.

TIGTA FY 2014 Budget Highlights

Dollars in Thousands

Treasury Inspector General for Tax 

Administration FTE Amount

FY 2012 Enacted 835 $151,696

FY 2013 Annualized CR Rate 835 $152,624

Changes to Base:

Adjustment to Request - $1,210

Adjustment to FTE Estimate (29) -

Non-Recur CR Increase - ($928)

Program Reductions & Efficiencies 

Proposed in FY 2013 - ($2,362)

Oversight of IRS Implementation of 

Affordable Care Act Proposed in FY 

2013 29 $4,500

Maintaining Current Levels (MCLs): - $1,602

Pay-Raise - $1,104

Non-Pay - $498

Efficiency Savings: - ($383)

Strategically Replacing Series 1811 

Investigators with non-1811 Staff - ($383)

Subtotal Changes to Base - $2,429

Total FY 2014 Base 835 $155,053

Program Changes:

Program Decreases: - ($5,515)

Program Reductions and Efficiencies - ($4,675)

Reducing RRA 98 Reporting 

Requirements - ($840)

Total FY 2014 Request 835 $149,538

FY 2014 Budget Adjustments

Adjustments to Request

Adjustment to FTE Estimate +$0 / -29 FTE

Adjustment to FTE based on projected 

utilization.

Non-Recur CR Increase -$928,000 / +0 FTE

The across-the-board 0.612 percent increase 

provided in the CR through March 27, 2013 is 

non-recurred.

Program Reductions & Efficiencies Proposed 

in FY 2013 -$2,362,000 / +0 FTE

TIGTA has closely scrutinized its budget for 

cost-saving opportunities. Reaching this 

savings target without impacting the quality of 

TIGTA’s programs will require a combination 

of actions. All vacancies are examined to 

determine the impact of delayed back-filling 

and will strategically identify positions where 

longer lapses will have the smallest impact on 

mission. TIGTA is also lowering its 

administrative costs by 20 percent compared to 

FY 2010 levels. TIGTA has aggressively 

implemented telework and office right-sizing 
measures in order to reduce its footprint, and 

has decreased its contribution for Council of 

the Inspectors General on Integrity & 

Efficiency (CIGIE).

Oversight of IRS Implementation of Affordable 

Care Act Proposed in FY 2013 +$4,500,000 / 

+29 FTE

The IRS components of the new ACA 

legislation are a cornerstone of the 

Administration’s plan to expand coverage for 

millions of Americans. TIGTA is in a unique 

position to ensure that IRS implements the law 

effectively, substantiate the integrity of the 

program, and reassure lawmakers that the 

program functions properly. TIGTA has often 

paved the way for new initiatives that are 

administered through the tax code. TIGTA’s 

work requires close coordination among its 

Audit, Investigations, and Inspections and 

Evaluation functions. Each program office 

brings unique skills and experience, but the 

bureau’s overall success depends greatly upon 

these offices’ close collaboration. The success 

of the new ACA program will depend on the 

government’s ability to assure taxpayers that 

the new changes are properly administered.

Maintaining Current Levels (MCLs) 

Pay-Raise +$1,104,000 / +0 FTE

The President's Budget proposes a 1 percent 

pay-raise for federal employees in 2014.

Non-Pay +$498,000 / +0 FTE

Funds are requested for inflation adjustments 

in non-labor expenses such as GSA rent 

adjustments, postage, supplies and equipment.

Efficiency Savings 

Strategically Replacing Series 1811 

Investigators with non-1811 Staff -$383,000 /

+0 FTE

TIGTA has reorganized its operations and 

hiring emphasis so that by FY 2014, a goal of 

four positions currently filled by series 1811 

investigators will be replaced by non-1811 

staff. This will be done by focusing on the 

requisite career experience and skills of new 

hires rather than on the job series. TIGTA is 

committed to finding the most efficient 

staffing pattern to carry out its investigative 

work.

Program Decrease 

Program Reductions and Efficiencies

-$4,675,000 / +0 FTE

TIGTA continues to identify cost-savings in 

travel, training, contracts, and rent. Further 

cuts will be made in these areas to reduce 

budget impact on TIGTA’s staffing levels. If 

necessary, TIGTA will examine all vacancies 

to determine the impact of delayed back-filling 

and will strategically identify positions where 

longer lapses will have the smallest impact on 

mission.

Reducing RRA 98 Reporting Requirements

-$840,000 / +0 FTE

Reducing the reporting requirements identified 

in TIGTA’s charter document, RRA 98 will 

generate $840,000 in savings. However, these 

reductions would require statutory change and 

are further discussed in the Legislative 

Proposals section of this document.

Explanation of Budget Activities

Audit ($58,190,000 from direct 

appropriations, $600,000 from reimbursable 

resources)

The Office of Audit’s (OA) mission is to 

provide comprehensive coverage and oversight 

of all aspects of the IRS’s daily operations. 

Audits not only focus on the economy and 

efficiency of IRS functions but also ensure that 

taxpayers’ rights are protected and the 

taxpaying public is adequately served. During 

FY 2012, audit reports produced potential 

financial benefits of approximately 

$22.7 billion, and potentially affected

approximately 7.6 million taxpayer accounts in 

areas such as taxpayer burden, rights and 

entitlements, taxpayer privacy and security, 

protection of resources/reliability of 
information, and increased revenue/revenue 

protected. Each fiscal year, OA develops an 

annual audit plan that communicates oversight 

priorities to the Congress, the Department of 

the Treasury, and the IRS. OA strategically 

evaluates IRS program, activities, and 

functions to develop an annual audit plan that 

targets resources toward the areas of highest 

vulnerability to the Nation’s tax system. The 

Audit program incorporates both statutory 

audit coverage and specific audits identified 

through TIGTA’s risk assessment process. By 

focusing on the most critical areas, OA ensures 

that audits of IRS programs and operations 

identify and recommend improvements that 

add value while addressing high-risk tax 

administration issues. Audit results to date 

illustrate the need for continued oversight over 

many of the tax-related ACA provisions. In 

FY 2013 and FY 2014 several key ACA 

provisions will become effective, but FY 2014 

will be a significant year for oversight.

Investigations ($91,348,000 from direct 

appropriations, $400,000 from reimbursable 

resources)

TIGTA has the statutory responsibility to 

protect the integrity of tax administration and 

to protect the ability of the IRS to collect 

revenue for the federal government. To 

accomplish this, TIGTA investigates 

allegations of criminal activity and serious 

misconduct committed by IRS employees, 

protects the IRS against external attempts to 

corrupt tax administration, and ensures IRS 

employee safety and IRS data and 

infrastructure security. The following 

summaries highlight TIGTA’s investigative 

efforts in these three core areas:

Employee Integrity: IRS employee 

misconduct can erode public trust and impede 

the IRS’s ability to effectively enforce tax 

laws. An estimated forty-eight percent of 

TIGTA’s current investigations involve 

alleged employee misconduct. In addition to 

unauthorized access (UNAX) integrity lapses, 

employee integrity investigations include 

misuse of IRS computer systems, extortion, 

thefts of Government property and taxpayer 

remittances, taxpayer abuse, false statements, 

and financial fraud. TIGTA also administers a 

proactive integrity program to help detect 

criminal and serious misconduct in the 

administration of IRS programs. 

Employee and Infrastructure Security: 

Physical violence, harassment, and 

intimidation of IRS employees pose some of 

the most significant challenges to the 

implementation of a fair and effective system 

of tax administration. OI places high priority 

on its oversight of IRS employee safety and 

physical security, protecting approximately 

100,000 employees and more than 700 

facilities throughout the country. TIGTA 

maintains IRS employee and infrastructure 

security by conducting investigations into 

incidents that threaten IRS employees, 

facilities, and infrastructure. TIGTA works 

aggressively and takes swift action to protect 

IRS employees, to include the providing of 

armed escorts. In October 2008, the Inspector 

General Reform Act of 2008 was signed into 

law, which allows TIGTA to provide physical 

security to protect IRS employees against 

external threats. TIGTA also operates the 

Electronic Crimes and Intelligence Division 

which facilitates pertinent information 

regarding potential threats to IRS employees 

and operations. This division participates with 

the Federal Bureau of Investigation sponsored 

National Joint Terrorism Task Force and the 

Domestic Terrorism Operations Units 

nationwide. 

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 bribes. TIGTA continues to 
receive and investigate allegations of potential 

fraud and misconduct involving IRS 

procurement. This trend is expected to 

increase and remains a key aspect of 

protecting tax administration in today’s 

environment.

Legislative Proposals

TIGTA proposes eliminating certain reviews 

required by RRA 98 which add little value to 

mission achievement. Eliminating these 

statutory reporting requirements will allow 

TIGTA to achieve savings and to reinvest 

resources to conduct high-risk audits. TIGTA 

proposal includes eliminating reporting 

requirements in the following areas:

 

 The requirement to report information 

regarding any administrative or civil 

actions related to Fair Tax Collection 

Practices violations in one of TIGTA’s 

Semiannual Reports. This pertains to 

26 U.S.C. § 7803(d) (1)(G). 

 The requirement to review and certify 

annually that IRS is complying with 

the requirements of 26 U.S.C. § 

6103(e) (8) regarding information on 

joint filers. 

 The requirement to annually report on 

the IRS compliance with 26 U.S.C. §§ 

7521(b) (2) and (c) requiring IRS 

employees to stop a taxpayer interview 

whenever a taxpayer requests to 

consult with a representative and to 

obtain their immediate supervisor’s 

approval to contact the taxpayer 

instead of the representative if the 

representative has unreasonably 

delayed the completion of an 

examination or investigation.

 The annual reporting requirement for 

the remaining RRA 98 provisions, net 

of the evaluation of the adequacy and 

security of the technology of the IRS, 

should be revised to a biennial 

reporting requirement.

TIGTA Performance by Budget Activity

Budget Activity Performance Measure FY 2010 FY 2011 FY 2012 FY 2013 FY 2014

Actual Actual Actual Target Target

Audit Percentage of Audit Products 

Delivered when Promised to 

Stakeholders 

76.0 68.0 71.0 70.0 65.0

Audit Percentage of Recommendations 

Made that Have Been 

Implemented 

95.0 93.0 94.0 85.0 85.0

Investigations Percentage of Results from 

Investigative Activities 

86.0 82.0 89.0 79.0 77.0

Key: DISC - Discontinued and B - Baseline

Description of Performance

 For FY 2012, TIGTA issued 117 audit, 

inspection and evaluation reports, 

identifying approximately $22.7 billion in 

potential financial benefits (i.e., costs 

savings, increased or protected revenue, 
taxpayer rights and entitlements, and 

inefficient use of resources).

 For FY 2012, the actual percentage for 

audit products delivered when promised to 

stakeholders was 71 percent. TIGTA 

exceeded this target by 1 percent as a result 

of monitoring the execution of its audit 

programs. The FY 2012 actual percentage 

for recommendations made that have been 

implemented was 94 percent. TIGTA 

exceeded its target by nine percent as a 

result of continued discussions throughout 

the audit process.

 For FY 2014, OA targets for audit products 

delivered when promised to stakeholders is 

65 percent and for recommendations made 

that have been implemented is 85 percent.

TIGTA lowered the FY 2014 targets to 

reflect increased vacancies and the 

uncertainty resulting from the FY 2013 

hiring freeze. The staffing vacancies are a 

result of retirements and job 

reassignments. The hiring freeze, which 

has delayed recruitment for key audit 

positions, will require TIGTA to extend 

acting roles for frontline managers and 

executive level positions. 

 For FY 2012, OI closed 89 percent of the 

3,446 final closed investigations which 

generated results, including 1,459 cases of 

employee misconduct referred to the IRS 

for action and 164 cases accepted for 

prosecution.

 For FY 2013 and FY 2014, OI will 

continue to use the performance model to 

measure its effectiveness, guide activities, 

and demonstrate its accomplishments to 

stakeholders.

 The FY 2014 performance target for OI is 

77 percent, a 12 percent decrease from the 

FY 2012 actual of 89 percent. TIGTA’s 

inability to backfill positions as a result of 

the FY 2013 hiring freeze, and the loss of 

experienced investigators attributed to this 

decrease.