Treasury Inspector General for 

Tax Administration

FY 2017

President’s Budget

February 9, 2016
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Table of Contents

Section 1 – Purpose ....................................................................................................................... 3

1A – Mission Statement.............................................................................................................. 3

1.1 – Appropriations Detail Table............................................................................................... 3

1B – Vision, Priorities, and Context........................................................................................... 3

Section 2 – Budget Adjustments and Appropriations Language ........................................... 16

2.1 – Budget Adjustments Table............................................................................................... 16

2A – Budget Increases and Decreases Description................................................................... 16

2.2 – Operating Levels Table.................................................................................................... 17

2B – Appropriations Language and Explanation of Changes................................................... 18

2C – Legislative Proposals........................................................................................................ 18

Section 3 – Budget and Performance Plan ............................................................................... 19

3A – Audit................................................................................................................................. 19

Description of Performance:..................................................................................................... 21

3.1.1 – Audit Budget and Performance Plan............................................................................. 22

3B – Investigations ................................................................................................................... 22

3.1.2 – Investigations Budget and Performance Plan ............................................................... 26

Section 4 – Supplemental Information...................................................................................... 27

4A – Summary of Investments ................................................................................................. 27
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Section 1 – Purpose

1A – 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.

1.1 – Appropriations Detail Table

Dollars in Thousands 

Treasury Inspector General for Tax 

Administration FY 2015 FY 2016 FY 2017 FY 2016 to FY 2017

Appropriated Resources Enacted Enacted Request $ Change % Change

 FTE AMOUNT FTE AMOUNT FTE AMOUNT FTE AMOUNT FTE AMOUNT

New Appropriated Resources:

Audit 349 61,572 358 65,100 358 66,020 0 920 0% 1.41%

Investigations 486 96,638 501 102,175 501 103,614 0 1,439 0% 1.41%

Subtotal New Appropriated Resources 835 $158,210 859 $167,275 859 $169,634 0 $2,359 0% 1.41%

Other Resources:

Reimbursables 2 1,500 2 1,500 2 1,500 0 0 0% 0.00%

Subtotal Other Resources 2 $1,500 2 $1,500 2 $1,500 0 $0 0% 0.00%

Total Budgetary Resources 837 $159,710 861 $168,775 861 $171,134 0 $2,359 0% 1.40%

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

 TIGTA has a statutory mandate to 

provide oversight by conducting independent audit, investigative, and inspection and evaluation 

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 taxpayers’ 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 strategic 

goals and objectives. 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. TIGTA’s role is important, given the current economic environment and the increased 

emphasis by the Administration, Congress, and the American people on the federal government’s

accountability and efficient use of resources.

 1 Pub. L. No. 105-206, 112 Stat. 685.
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TIGTA’s Fiscal Year (FY) 2013 – 2016 Strategic Plan guides program and budget activities and 

supports the Department of the Treasury’s FY 2014-2017 Strategic Plan (the Plan), which 

includes Strategic Goal 3: “Fairly and effectively reform and modernize federal financial 

management, accounting, and tax systems.”

TIGTA’s vision is consistent with Objective 3.2 of the Plan, “Improve the disbursement and 

collection of federal funds and reduce improper payments made by the U.S. Government.” 

Likewise, TIGTA’s vision supports Objective 3.3 of the Plan, “Pursue tax reform, implement the 

Patient Protection and Affordable Care Act (ACA)2 and the Foreign Account Tax Compliance 

Act (FATCA),3 and improve the execution of the Internal Revenue Code (IRC or tax code).”

TIGTA’s progress in meeting the strategic goal of valuing its people was demonstrated last year 

when the Partnership for Public Service announced the results of the 2015 Best Places to Work

rankings. TIGTA placed 9 out of 320 agency subcomponents. The scoring index measured the 

performance of agency subcomponents with respect to employee satisfaction and commitment. 

Among all Treasury bureaus, TIGTA placed the highest in this ranking.

TIGTA’s headquarters facility is in Washington, D.C., and TIGTA has 67 offices located 

throughout the United States and Puerto Rico. TIGTA is uniquely organized by function (Figure 

1) to meet current tax administration challenges and to keep pace with emerging issues. These 

functions include:

• Office of Audit (OA) – This Office conducts audits and issues reports 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) – This Office investigates external threats of violence against 

IRS employees and facilities and internal allegations of criminal and administrative 

misconduct by IRS employees and contractor. OI also conducts investigations to protect the

 2 Pub. L. No. 111-148, 124 Stat. 119, as amended by the Health Care and Education Reconciliation Act of 2010, 

Pub. L. No. 111-152, 124 Stat. 1012. 3 Hiring Incentives to Restore Employment Act of 2010, Title V, Pub. L. 111-147, 124 Stat. 71.

TIGTA Vision

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 Strategic Goals

Promote the economy, efficiency, and effectiveness of tax administration.

Protect the integrity of tax administration.

Be an organization that values its people.
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IRS against bribery attempts, impersonations, and external, cyber-based, and often globallycomplex threats that would impede the IRS’s ability to collect revenues and safeguard the 

processing of approximately 242 million returns annually.

• Office of Inspections and Evaluations (I&E) – This Office provides responsive, timely, and 

cost-effective inspections and evaluations of challenging areas in IRS programs. I&E’s 

oversight activities include inspecting IRS’s compliance with established system controls and 

operating procedures and evaluating IRS operations for high-risk systemic inefficiencies.

Figure 1: TIGTA's Organizational Structure

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 2015, through targeted and vigorous oversight efforts that addressed 

congressional concerns and audit and investigative priorities, TIGTA generated overall financial 

accomplishments of over $26.6 billion.

During FY 2015, these financial 

accomplishments included: 

• Increased and/or protected revenue in 

the amount of $17.4 billion; 

• Cost savings of $9.1 billion; and

• Significant investigative 

accomplishments of $.05 billion.

Funding for TIGTA allows oversight 

efforts to continue, and in FY 2015 these 

efforts produced a return on investment (ROI) of $168 for every $1 invested (Figure 2). During 

that period TIGTA issued audit reports with recommendations that potentially increased and/or 

protected revenue of $17.4 billion. For example, based on an analysis of education credits 

claimed and received on Tax Year 2012 tax returns, TIGTA projected that approximately $11 

billion in potentially erroneous education credits could be paid over the next several years if 

corrective actions are not taken. Increased/protected revenue includes the assessment or 

collection of additional taxes (increased revenue) and the validation of the accuracy of the total 

taxes, penalties, and interest paid to the federal government (revenue protection). TIGTA reports 

total projections in the year the audit is completed. TIGTA also issued audit reports with 

Figure 2: TIGTA's Return on Investment (ROI)
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recommendations that identified a potential $9.1 billion in cost savings. 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 means 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 

$40,443,892 in court-ordered fines, penalties, and restitution.

FY 2017 Budget Request

TIGTA’s FY 2017 budget request of $169,634,000 represents an increase of 1.41 percent above 

its FY 2016 budget request. 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),4 TIGTA submits the following information related to its FY 2017 Budget Request:

• The aggregate budget request for TIGTA operations is $169,634,000;

• 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 $508,900.

The amount requested for training supports TIGTA’s training needs for FY 2017.

FY 2017 Priorities

TIGTA’s audit, investigative, and inspection and evaluation 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 for taxpayer data and IRS employees; tax systems 

and online services; identity theft; oversight of tax-exempt organizations; tax compliance; the 

implementation of tax law changes; and human capital challenges facing the IRS in its 

domestic and/or international operations;

• Developing advanced analytics and innovative approaches to help prevent and detect the 

flow of dollars fraudulently obtained by criminals and IRS employees to help ensure the 

security of IRS and TIGTA data;

 4 5 U.S.C. app. 3 § 6(f)(1).
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• Providing the IRS with the investigative coverage and the information necessary to mitigate 

threats against its employees, facilities, and data systems;

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

data infrastructure, and sensitive information;

• Rapidly and effectively responding to attempts to impersonate the IRS for fraudulent 

purposes;

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

misconduct, including the unauthorized disclosure of confidential taxpayer information by 

IRS employees;

• Conducting comprehensive audits and inspections and evaluations that provide 

recommendations for achieving 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 increase international tax 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 the IRS faces major risks, including:

• ACA implementation and administration;

• Identity theft detection and prevention;

• International tax compliance; and

• Oversight of the tax-exempt organizations.

The ACA resulted in the largest set of tax law changes in 20 years, with more than 40 provisions 

modifying or expanding the IRC. These provisions provide incentives and tax breaks to 

individuals and small businesses to offset health care expenses. They also impose penalties, 

administered in accordance with the IRC, for individuals and businesses that do not obtain health 

coverage for themselves or their employees. TIGTA’s independent oversight plays a key role in 

ensuring that the provisions are implemented and administered in accordance with the law and 

the intent of Congress.

Beginning with the filing of Tax Year (TY) 2014 returns, individuals must indicate whether they 

maintain minimum coverage for themselves and their dependents. Individuals who do not 

maintain minimum coverage and are not exempt from the requirement will have to pay a 

penalty. To assist individuals with the cost of their health insurance premiums, the ACA also 

created a refundable tax credit, referred to as the Premium Tax Credit. Individuals who receive 

advance payments must file a tax return to reconcile advanced payments to their allowable credit 

beginning in the 2015 filing season. TIGTA will continue to evaluate the IRS’s effectiveness in 
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ensuring compliance with the individual coverage mandate and the accuracy of Premium Tax 

Credit claims.

FY 2016 will be a significant year for the IRS’s implementation of ACA provisions. The ACA 

requires employers and insurers to file information returns with the IRS identifying individuals 

to whom employers offered health insurance and indicating whether the insurance offered met 

minimum requirements. Reporting of this information to the IRS was delayed from 2015 to

2016. TY 2015 will be the first in which the IRS will have all of the reporting information 

required to verify related claims on individual tax returns. In addition, certain employers 

offering minimum coverage will be required to report to the IRS whether they offer full-time 

employees and their dependents the opportunity to enroll in coverage. An assessed payment will 

be imposed on employers who fail to provide employees with the opportunity to enroll in 

minimum coverage plans. TIGTA will also assess the IRS’s efforts to develop processes to 

identify employers not filing information reports and not offering insurance that meets minimum 

requirements.

TIGTA will continue its assessment of IRS’s development of systems to prevent, detect, and 

resolve fraud and abuse during ACA tax return processing. The IRS’s ACA implementation 

plan is designed, when fully developed and implemented, to leverage third-party reporting from 

the exchanges and the Return Review Program. The plan calls for the development of the ACA 

Verification Service to identify improper ACA-related refunds. The ACA Verification Service 

will be designed to screen improper refunds and identify fraud including multiple returns. Until 

these new systems are successfully developed, TIGTA is concerned that the IRS’s existing fraud 

detection system may be incapable of identifying ACA refund fraud prior to the issuance of tax 

refunds. Many of the ACA tax provisions relating to Health and Human Services (HHS) and 

IRS processes and procedures will also require continued coordination between TIGTA and 

HHS’s Office of Inspector General during FY 2016.

Identity theft poses another significant and growing problem affecting tax administration. 

Identity theft tax fraud occurs when an individual uses another person’s name and Taxpayer 

Identification Number (generally a Social Security Number) to file a fraudulent tax return to 

obtain a refund. The IRS has made this issue one of its top priorities; however, significant 

improvements are still needed.

A real-time example of TIGTA’s need to have the newest technology, data tools, and human 

resources to investigate complex financial crimes occurred in May 2015. The IRS originally 

reported to TIGTA that criminals used taxpayer-specific data acquired from non-IRS sources to 

successfully gain unauthorized access to over 100,000 tax accounts through the IRS’s “Get 

Transcript” application. In August 2015, as a result of TIGTA’s investigation, the IRS 

conducted a deeper analysis in which it identified an additional 220,000 successful attempts to 

clear the “Get Transcript” verification process by individuals with taxpayer-specific sensitive 

data. The updated review also identified an additional 170,000 suspected attempts that failed to 

clear the authentication processes. Following TIGTA’s advice, the IRS disabled the “Get 

Transcript” application until this matter is investigated. As of February 2016, the “Get 

Transcript” application is still disabled and under further investigation. The loss of taxpayer 

account information will also be reviewed by OA to determine if appropriate controls and 
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policies were in place to safeguard taxpayers’ information. In addition, OA will evaluate the 

adequacy of the assistance provided by the IRS to victims of the data breach.

The risk for this type of unauthorized access to tax accounts will continue to grow as the IRS 

focuses its efforts on delivering taxpayers self-assisted interactive online tools. The IRS 

Commissioner’s vision is to provide taxpayers and tax professionals with more robust online 

services, based on the idea of allowing access to government services anywhere, anytime, on any 

device, in three to five years. In addition to the IRS’s Get Transcript application, the IRS also 

provides several other online services that could also pose a risk for unauthorized access.

International tax compliance remains a significant area of concern for the IRS, which is 

responsible for ensuring that all international taxpayers are compliant with U.S. tax obligations. 

In the past, TIGTA found that the IRS did not provide effective oversight to the International 

Collection program, which contributed to several control weaknesses in the program. The scope, 

complexity, and magnitude of the international financial system present significant challenges 

for the IRS. The number of taxpayers conducting international business transactions continues to 

grow as technology provides new opportunities for offshore investments.

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

program. These entities are not subject to federal income tax, but they represent a significant 

aspect of tax administration.

Office of Investigations

In FY 2015, through its investigative 

programs, OI sought to protect the IRS’s 

ability to process 242 million tax returns and 

collect more than $3.1 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 (Figure 3).

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 sensitive personal and financial information belonging to American taxpayers. As 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 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.

OI places the highest priority on its statutory responsibility to safeguard approximately 91,000 

IRS employees located in 601 facilities throughout the United States. Threats of physical 

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

aggressively investigates and refers for prosecution. As a result, IRS employees feel more secure

Figure Figure 3: TIGTA’s Protection of the Federal Tax System 3: TIGTA's Protection of the Federal Tax System
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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 

with its other investigative programs that help to protect the integrity of the federal tax system.

Emerging Issues

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 December 2015, TIGTA had received more than 896,000 reports of these calls, between 

10,000 and 13,000 each week. To date, more than 5,000 victims have paid more than $26.5

million to the scammers. This nationwide scam is being conducted by criminals who are part of 

a broader international ring of scam artists operating outside the United States. The scam artists 

use Voice-Over Internet Protocol technology, which makes it more difficult for investigators to 

identify criminals. The FY 2017 budget request includes resources needed to investigate these 

crimes and prevent more people from being victimized.

Data Breach: In May 2015, the IRS originally reported to TIGTA that criminals used taxpayerspecific data acquired from non-IRS sources to successfully gain unauthorized access to more 

than 100,000 tax accounts through IRS’s “Get Transcript” application. In August 2015, as a 

result of TIGTA’s investigative findings, the IRS conducted a deeper analysis in which it 

identified an additional 220,000 successful attempts to clear the “Get Transcript” verification 

process by individuals with taxpayer-specific sensitive data. The updated review also identified 

an additional 170,000 suspected attempts that failed to clear the authentication processes. 

Following TIGTA’s advice, the IRS disabled the “Get Transcript” application until this matter 

has been investigated. As of February 2016, the “Get Transcript” application is still disabled and 

under further investigation.

As part of its overall investigation into the data breach, OI is conducting an in-depth forensic 

review of more than 300,000 accounts to determine if they were used for any other type of 

identity theft. The investigation will also identify the vulnerabilities that allowed the accounts to 

be stolen and to generate the evidence necessary to bring the responsible individuals to justice.

ACA: TIGTA anticipates a significant rise in the number of complaints and investigations in 

FY 2017 because of the IRS’s increased role in the ACA implementation. This 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 collecting ACA 

tax penalties that took effect in Calendar Year (CY) 2015;

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

fraudulently obtain personally identifiable information from unsuspecting taxpayers; and

• The number of employee integrity investigations, to ensure that IRS employees and 

contractors are appropriately safeguarding sensitive information from taxpayers’ health 
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insurers, and to reduce the potential for unauthorized access to, or disclosure of, confidential 

taxpayer information.

International Cybercrimes and Identity Theft: By the end of CY 2013, the IRS had reported 

nearly 2.9 million identity theft cases, of which taxpayers had reported 13 percent and the IRS 

had detected approximately 87 percent. The tools and techniques used by the perpetrators of 

identity theft are such that they can be deployed from anywhere in the world, without regard to 

borders, using Internet-connected computers. OI’s 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.

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. 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 (Figure 4). OI will continue 

to support these critical international 

investigations with its highly trained special 

agents.

Office of Inspections and Evaluations

I&E provides a range of specialized services and products, including quick reaction reviews, onsite office inspections, and in-depth evaluations of major functions, activities, or programs. 

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.

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

and minimize inefficient and ineffective procedures. In FY 2015, I&E produced four reports

reviewing:

• The IRS’s use of its streamlined critical pay authority;

• Adherence to required bargaining processes and federal guidance in payment of FY 2013 

employee performance awards;

• Whether requests for taxpayer information were processed properly; and

• Significant unimplemented corrective actions, as shown in the September 30, 2015

Semiannual Report to Congress.

Figure 4: Examples of countries linked to TIGTA cybercrimes 

investigations
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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 are completed in a more compressed period of time than are traditional audits. 

The work of I&E complements OA and OI, and its findings may result in subsequent audits 

and/or investigations.

Office of Information Technology

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

technology (IT) products and services that permit successful completion of TIGTA’s business 

goals, while at the same time 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 the benefit of audit, investigative, 

legal, and management services.

TIGTA’s OA, OI, and I&E functions rely heavily on the products and services provided by OIT 

to execute TIGTA’s mission. IT is the dynamic force that allows auditors, special agents, and 

inspectors and evaluators 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 as well as a skilled staff to provide those services to 

the organization.

TIGTA has no major IT investments, based on the 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 TIGTA. These investments 

include:

• Telecommunications Infrastructure – The utilization of smaller devices (e.g., smartphones 

and tablets) requires new and different types of connectivity to serve the increasingly mobile

workforce. Greater capacity, additional services, and lower cost alternatives are also 

necessary to meet the ever growing needs of a changing workforce. TIGTA’s OIT also faces 

the challenges of migrating to a new Department-wide telecommunications contract along 

with meeting user expectations.

• Refreshed Applications and Collaboration Environment – Given the evolving work 

model, not only are new applications expected to be available on the mobile platforms, but 

also legacy and mission critical applications will need to be adapted to this mode of 

operation.

• Secure IT Mobility – The emphasis on ensuring TIGTA has proper controls in place will 

only increase as the number and frequency of intrusions and data losses highlight the 

importance of IT security. To prevent the compromise of the data TIGTA obtains, it must 

aggressively ensure that its own security posture is properly maintained.

• Server and Storage Infrastructure – Deep data analysis and predictive analysis will require 

additional resources to prevent waste, fraud, and abuse.
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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.

As part of TIGTA’s oversight activities, 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, OI has established a Threat Information Notification System (TINS) 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 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 cybercrime. Effective information systems 

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

unauthorized 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 91,000 

employees and 601 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.

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

employees who access tax information without authorization. This is referred to as IRS 

Unauthorized Access, Attempted Access or Inspection of Taxpayer Records or commonly 

known as UNAX. The initial investigation into an allegation of UNAX by an IRS employee 

often leads to the discovery of 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 2015, TIGTA 

initiated 225 UNAX investigations and closed 197 cases that resulted in adjudicated personnel 

actions against IRS employees.

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

computer applications that contain sensitive information. The IRS currently has 132 application 

systems that process sensitive data, of which 83 are considered to be at risk for UNAX. With the 

FY 2017 resources, TIGTA will be able to ensure that these applications are evaluated properly 

and provide any necessary recommendations, so the IRS can implement improvements to 

mitigate these risks.

OI will conduct in-depth forensic review of taxpayer accounts that were compromised, as first 

reported in May 2015 by the IRS, when criminals used taxpayer-specific data acquired from non-
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IRS sources to successfully gain unauthorized access to tax accounts through IRS’s “Get 

Transcript” application. The investigation will also identify the vulnerabilities that allowed the 

accounts to be stolen and to generate the evidence necessary to bring the responsible individuals 

to justice. The loss of taxpayer account information will also be reviewed by OA to determine if 

appropriate controls and policies were in place to safeguard the taxpayers’ information.

TIGTA’s outreach program continues to play an important role in its broader efforts to raise the 

awareness of, educate, and train IRS employees and tax practitioners about potential threats and 

crimes against the IRS and taxpayers. Every year, special agents conduct security 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. In FY 2015, TIGTA provided 1,119 awareness presentations to 36,240 IRS 

employees and 35 awareness presentations to 3,180 tax practitioners and preparers.

Fraudulent Claims and Improper Payments: The Improper Payments Information Act of 20025

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. Improper payments by federal 

government agencies have been an issue for many years, and numerous efforts have been made 

to identify, measure, and reduce them. In FY 2015, TIGTA issued a report noting that 3,285 

electronically-filed corporate income tax returns filed in 2013 claimed potentially erroneous 

carryforward credits totaling over $2.7 billion. In addition, a programming error prevented more 

than $170 million in Empowerment Zone Employment credits claimed in CY 2013 from being

received by the corporations claiming the credit.

According to another FY 2015 TIGTA report, the IRS does not have an effective process for 

identifying erroneous claims for education credits. TIGTA estimated that taxpayers received 

more than $5.6 billion in potentially erroneous education credits claimed on TY 2012 returns.

TIGTA projected that approximately $11 billion in potentially erroneous education credits could 

be paid over the next several years if corrective actions are not taken.

Tax Compliance Initiatives: Increasing budgetary pressure has led to a reduction of IRS 

resources in the enforcement area, which affects how the IRS addresses tax noncompliance. In 

FY 2015, TIGTA reported additional actions to enforce payment card reporting requirements 

could reduce the tax gap. TIGTA found that taxpayers are not compliant with backup 

withholding requirements directing a taxpayer to immediately withhold 28 percent of amounts 

reported on Forms 1099-K for payees that failed to provide a valid Taxpayer Identification 

Number (TIN). TIGTA’s review of Calendar Year 2013 Forms 1099-K identified 10,216 forms 

with a missing TIN. The Forms 1099-K reported gross transactions totaling more than $10.6 

billion. To address the challenges, TIGTA made seven recommendations; the IRS agreed to six 

of them and implemented pilot initiatives in an effort to identify payment card noncompliance.

Advising Congress: In FY 2015, TIGTA provided six testimonies, more than 25 briefings, and 

more than five official written responses to Congress on its audit, investigative, and inspection 

 5 Pub. L. No. 107-300, 116 Stat. 2350.
TIGTA - 15

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

congressional committees in critical issues involving IRS programs and operations.

Fraud and Electronic Crime: Historically, investigations and audits have shown that the 

sensitivity of the data the IRS collects makes such data an attractive target for employees, 

hackers, and others residing throughout the world, who could use the information to commit 

crimes involving fraud and identity theft. TIGTA’s audit, investigative, and inspection and 

evaluation work provides coverage of this growing national and international problem, providing 

proactive prevention and detection efforts that are critically necessary 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, which provide essential services that underpin American society. Degradation of 

the public’s trust in the tax system could lead to a decline in voluntary compliance and present a 

risk to national security.

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

commitment to promote efficient spending and cut waste. All investments and procurements

undergo a rigorous review by TIGTA’s Investment Review Board. The Board performs regular 

monitoring of these investments to ensure proper management. For FY 2016 and FY 2017, 

TIGTA will continue to scrutinize its budget and identify areas for cost savings and efficiencies. 

For example, TIGTA will generate savings from the reduction of personnel investigations it will 

need to conduct based on the results of an ongoing position sensitivity designation review.

In order for TIGTA to maintain a highly skilled, proactive, and diverse Inspector General 

organization with a reputation of protecting and promoting fair tax administration, its employees 

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

and priorities. In addition, TIGTA will ensure that its workforce receives training that 

strengthens the knowledge and skills it needs to continue to protect the public and to ensure 

Congress’s confidence in the tax system.
TIGTA - 16

Section 2 – Budget Adjustments and Appropriations Language

2.1 – Budget Adjustments Table

Dollars in Thousands

Treasury Inspector General for Tax Administration FTE Amount

FY 2016 Enacted 859 $167,275

Changes to Base:

Maintaining Current Levels (MCLs): - $2,376

Pay-Raise - $1,315

Pay Annualization - $437

Non-Pay - $624

Efficiency Savings: - ($17)

Personnel Security Background Investigations - ($17)

Subtotal Changes to Base - $2,359

Total FY 2017 Base 859 $169,634

Total FY 2017 Request 859 $169,634

2A – Budget Increases and Decreases Description

Maintaining Current Levels (MCLs) ......................................................+$2,376,000 / +0 FTE

Pay-Raise +$1,315,000 / +0 FTE

Funds are requested for the proposed January 2017 pay-raise.

Pay Annualization +$437,000 / +0 FTE

Funds are requested for annualization of the January 2016 pay-raise.

Non-Pay +$624,000 / +0 FTE

Funds are requested for non-labor costs such as travel, contracts, rent, and equipment.

Efficiency Savings ...........................................................................................-$17,200 / +0 FTE

Personnel Security Background Investigations - $17,200/ +0 FTE

TIGTA will generate a savings of $17,200 from a reduction in the number of personnel 

investigations it will need to conduct based on the results of an ongoing position sensitivity 

designation review.
TIGTA - 17

2.2 – Operating Levels Table

Dollars in Thousands 

Treasury Inspector General for Tax Administration FY 2015 FY 2016 FY 2017

Object Classification Actual Enacted Request

11.1 - Full-time permanent 81,433 91,135 91,726

11.3 - Other than full-time permanent 445 590 594

11.5 - Other personnel compensation 7,991 8,405 8,460

11.9 - Personnel Compensation (Total) 89,869 100,130 100,780

12.0 - Personnel benefits 33,470 34,307 35,409

Total Personnel Compensation and Benefits $123,339 $134,437 $136,189

21.0 - Travel and transportation of persons 4,295 3,514 3,581

22.0 - Transportation of things 18 19 19

23.1 - Rental payments to GSA 9,197 9,221 9,396

23.2 - Rental payments to others 150 229 233

23.3 - Communication, utilities, and misc. charges 519 1,829 1,864

24.0 - Printing and reproduction 6 7 7

25.1 - Advisory and assistance services 2,067 790 805

25.2 - Other services 1,030 708 721

25.3 - Other purchases of goods & servs from Govt accounts 10,233 8,218 8,357

25.4 - Operation and maintenance of facilities 13 416 424

25.7 - Operation and maintenance of equip 2,494 926 944

26.0 - Supplies and materials 945 1,052 1,072

31.0 - Equipment 4,593 5,832 5,943

42.0 - Insurance claims and indemnities 4 52 53

91.0 - Confidential Expenditures 36 25 26

Total Non-Personnel $35,600 $32,838 $33,445

Subtotal New Appropriated Resources $158,939 $167,275 $169,634

Budget Activities:

Audit 57,845 65,700 66,620

Investigations 101,906 103,075 104,514

Total Budgetary Resources $159,751 $168,775 $171,134

$159,710

FTE 758 861 861
TIGTA - 18

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 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; [$167,275,000,] $169,634,000, of which 

$5,000,000 shall remain available until September 30, [2017] 

2018; 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, 

2016.)

2C – Legislative Proposals

TIGTA has no legislative proposals.
TIGTA - 19

Section 3 – Budget and Performance Plan

3A – Audit

($66,020,000 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 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 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 to the Nation’s system of tax administration. By focusing on the 

most critical areas, TIGTA identifies and recommends improvements that add value while 

addressing high-risk tax administration issues. In FY 2015, OA issued 92 final audit reports that 

included potential financial benefits totaling approximately $26.6 billion and affected 

approximately 5.3 million taxpayer accounts.

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

and key 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 Government Accountability Office, 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 ACA implementation and 

administration, identity theft detection and prevention, security of taxpayer data, tax compliance, 

fraudulent claims and improper payments, tax systems and online services, tax-exempt 

organizations, 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.

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.

In addition to its coverage of the major management challenges facing the IRS, OA places 

importance on key emphasis areas based on significance and impact on tax administration:

• ACA Implementation and Administration – The ACA impacts individual and business 

taxpayers at all income levels, IRS compliance and enforcement programs, information 

reporting requirements, the administration of tax penalties, and information technology. 

Ensuring the confidentiality of taxpayer data provided to the Federal and State Exchanges,

developing a compliance strategy for certain requirements of the ACA, and identifying 

potential fraud related to the premium tax credit provision are all challenges facing the IRS. 
TIGTA - 20

In FY 2015, TIGTA identified that the IRS needs to ensure that health insurance policy 

issuers and self-insured sponsors are paying a Patient-Centered Outcome Research (PCOR)

fee (ACA excise tax) based on the average number of lives covered. The new fee is used to 

offset the costs of the PCOR Institute, which funds research to assist decision-making for 

patients and healthcare providers. For TY 2012, TIGTA found that of 72,035 health 

insurance policy issuers/self-insured plan sponsors, 30,996 (43 percent) paid a PCOR fee of 

less than $4.25, which is the IRS’s cost to process these returns.

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

reviewing applications for tax-exempt status has been a significant concern, and the IRS has 

made substantial changes in its administration of this process. However, a FY 2015 audit 

determined that the IRS uses a subjective process that will be replaced with a clearly defined 

social welfare test upon finalized guidance from the Department of the Treasury.

• Identity Theft Detection and Prevention – Stopping identity theft and refund fraud continues 

to be a top priority for the IRS, as its work in these areas continues to grow and includes 

nearly every part of the organization. The IRS has put in place a strategy to prevent fraud, 

investigate these crimes, and assist taxpayers victimized by identity thieves. While the IRS 

has made progress, this is no comfort to the victims and the IRS needs to do more. In May 

2015, the IRS originally announced that criminals used taxpayer-specific data acquired from 

non-IRS sources to gain unauthorized access to information on over 100,000 tax accounts 

through IRS’s “Get Transcript” application. As a result of TIGTA’s investigative findings, 

in August 2015, the IRS conducted a deeper analysis in which it identified an additional 

220,000 successful attempts to clear the “Get Transcript” verification process by individuals 

with taxpayer-specific sensitive data. The updated review also identified an additional 

170,000 suspected attempts that failed to clear the authentication processes. Before trying to 

access the IRS site, the criminals gained sufficient information from an outside source to 

clear a multi-step authentication process, including several personal verification questions 

that typically are only known by the taxpayer. Additionally, TIGTA’s review found that the 

IRS continues to make errors when resolving the tax accounts of identity theft victims. 

TIGTA estimated that 10 percent of the 267,692 taxpayers whose accounts were resolved 

may have been resolved incorrectly, resulting in the delay of refunds or the identity theft 

victims’ receiving incorrect refund amounts.

• International Tax Compliance – The tax compliance of business and individual taxpayers 

involved in international transactions remains a significant area of concern for the IRS. As 

the number and complexity of international transactions continues to grow, the IRS must 

focus its international efforts on ensuring compliance with the tax laws, regardless of where 

the taxpayers reside. The enactment of FATCA to combat tax evasion by U.S. persons 

holding investments in offshore accounts is an important development in the IRS’s efforts to 

improve U.S. tax compliance involving foreign financial assets and offshore accounts.

In addition to the areas addressed above, TIGTA’s reports for FY 2015 addressed issues that 

included:

• Education Credits – The IRS still does not have effective processes to identify erroneous 

claims for education credits. Erroneous claims include claims for individuals who did not 

appear to have attended a postsecondary educational institution, individuals who did not 

attend an eligible educational institution, individuals who did not appear to attend the 

educational institute for the required length of time, and individuals who claimed the credit 
TIGTA - 21

for more than the four tax years allowed by law. Based on the audit, more than $11 billion of 

increased revenue/revenue protected and more than $9.1 billion in cost savings could 

potentially be achieved.

• General Business Credits – Carryforward – TIGTA identified 3,285 corporate income tax 

returns electronically filed in CY 2013, on which corporations claimed potentially erroneous 

carryforward credits totaling more than $2.7 billion. TIGTA also found that a programming 

error prevented more than $170 million in Empowerment Zone Employment Credits claimed 

on 717 returns from being received by the corporate taxpayers.

• Fresh Start Initiatives – Under the Fresh Start Initiatives, taxpayers struggling to pay their 

outstanding tax obligations signed direct debit installment agreements and the IRS withdrew 

their Notices of Federal Tax Lien (NFTL). However, 524 taxpayers, who owed 

approximately $10.5 million, defaulted on their installment agreements, and the IRS did not 

file new NFTLs.

Description of Performance:

TIGTA uses two performance measures to gauge the success of the 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 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).

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 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.

In FY 2015, the actual Percentage of Audit Products Delivered when Promised to Stakeholders 

was 80 percent, against a full-year target of 68 percent.

In FY 2015, the actual Percentage of Recommendations Made that Have Been Implemented was 

92 percent, against a full-year target of 85 percent. TIGTA exceeded its target because of 

continued discussions with the IRS throughout the audit process concerning both the findings 

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

FY 2017, the target for Percentage of Audit Products Delivered when Promised to Stakeholders 

will remain 68 percent. The target for Percentage of Recommendations Made that Have Been 

Implemented will also remain at 85 percent.
TIGTA - 22

3.1.1 – Audit Budget and Performance Plan

Dollars in Thousands

Audit Budget Activity

Resource Level FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017

Actual Actual Actual Actual Actual Actual Enacted Request

Appropriated Resources $57,421 $57,306 $57,306 $54,309 $53,763 $57,463 $65,100 $66,020

Reimbursable Resources $529 $351 $0 $500 $600 $382 $600 $600

Budget Activity Total $57,950 $57,657 $57,306 $54,809 $54,363 $57,845 $65,700 $66,620

Measure FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2015 FY 2016 FY 2017

Actual Actual Actual Actual Actual Actual Target Target Target

Percentage of Audit 

Products Delivered 

when Promised to 

Stakeholders

76.0 68.0 71.0 84.0 65.0 80.0 68.0 68.0 68.0

Percentage of 

Recommendations 

Made that Have Been 

Implemented

95.0 93.0 94.0 87.0 89.0 92.0 85.0 85.0 85.0

3B – Investigations

($103,614,000 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. In addition to protecting the IRS’s ability to collect the majority of 

the revenue for the federal government’s operations, TIGTA also has the statutory responsibility 

of 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.

The performance model (Figure 5) results in reliable statistical data used to make mission-critical 

decisions regarding staffing, budgeting, and training. The performance model 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 investigative accomplishments to 

external stakeholders.

Figure 5: Investigative Performance Model
TIGTA - 23

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

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

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

abuses, unauthorized access, and disclosure of tax return information. In FY 2015, 49 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 activity and serious misconduct in the administration of IRS programs. In FY 2015, 

TIGTA initiated 37 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. This investigation resulted in numerous arrests, prosecutions, and terminations 

of IRS employees for fraud.

TIGTA received 12,080 complaints, opened 2,726 investigations, and closed 2,797

investigations in FY 2015. During this period, TIGTA referred for IRS action 1,185 cases of 

employee misconduct and accepted 146 cases of all types of investigations for criminal 

prosecution. As a result of a TIGTA investigation into employee misconduct, a former IRS 

employee was sentenced to 24 months in prison6 for her role in an identity theft scheme.7

 In 

another case, a Fresno, California, IRS employee was arrested8 after being indicted for filing 

fraudulent tax returns.9 The 20-year employee prepared and filed numerous fraudulent federal 

income tax returns for herself, her family members, and others, defrauding the United States of 

approximately $37,387.10

Employee and Infrastructure Security: In FY 2015, TIGTA responded to 1,936 threat-related 

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 (Figure 6).

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; RRA 98; the Inspector 

General Act of 1978, as amended, and the Inspector General Reform Act of 2008; and is

summarized in Treasury Order 115-01. All reports of threats, assaults, and forcible interference 

against IRS employees performing their official duties are referred to OI. 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.

 6 W.D. Mo. Judgment filed Nov. 13, 2014.

7 W.D. Mo. Indict. filed Mar. 19, 2014. 8 E.D. Cal. Executed Arrest Warrant filed Feb. 27, 2015.

9 E.D. Cal. Indict. filed Feb. 26, 2015.

10 Id.
TIGTA - 24

To ensure IRS employee safety, OI undertakes investigative initiatives to identify individuals 

who could commit violence against IRS employees, or who could otherwise pose a threat to IRS 

employees, facilities, or infrastructure. OI provides crucial intelligence to IRS officials to assist 

them in making proactive operational decisions about potential violence or other activities that 

could pose a threat to IRS systems, operations, and people.

Figure 6: Investigative Activities (Assaults and Threats) in FY 2015

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. TIGTA has processed 

over 12,176 threat-related complaints and investigated over 5,971 threats against IRS employees 

from FY 2011 through FY 2015.

TIGTA takes threats directed at the IRS and its employees very seriously. In October 2014, a 

Rhode Island man was sentenced to 12 months and a day in prison, plus three years of supervised 

probation and 300 hours of community service for threatening the life of an IRS employee and 

the employee’s family members.11 The threatening statements were made with the intent to 

impede the official duties of, and to retaliate against, the employee.12 In another case, a Utah 

man was sentenced to 24 months imprisonment and three years of supervised release for the 

illegal possession of a machine gun.13 An investigation was initiated after the individual made 

statements about bombing the IRS office, the police department, and a court building. The man 

 11 D. R.I. Judg. filed Oct. 7, 2014. 12 D. R.I. Indict. filed Jan. 15, 2014. 13 D. Utah Judg. filed Oct. 31, 2014.
TIGTA - 25

subsequently delivered a fully automatic firearm with an obliterated serial number to a Federal 

Bureau of Investigation undercover employee.14

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 collaborate with the 

IRS and protect 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 

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 IRS employees to conduct tax administration activities.

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 attempted bribery of IRS employees and impersonation of the IRS. 

Many IRS employees are in direct contact with taxpayers and often encounter situations where a 

taxpayer may challenge the employees’ integrity by offering a bribe. Bribery, or attempted 

bribery, of a public official is a criminal offense and is considered an attack on the integrity of 

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

investigating nationwide IRS impersonation schemes in which criminals are pretending to be 

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

taxpayers. Since the scam was first reported in the summer of 2013, the TIGTA Hotline has 

received more than 896,000 related contacts, and it is estimated that the scheme has resulted in 

more than $26.5 million in payments made by more than 5,000 victims as of December 2015.

OI is conducting an in-depth forensic review of taxpayer accounts for the May 2015 IRS 

reported data breach, in which criminals used taxpayer-specific data acquired from non-IRS 

sources to successfully gain unauthorized access to tax accounts through IRS’s “Get Transcript” 

application. The investigation will identify the vulnerabilities that allowed the accounts to be 

stolen and generate the evidence necessary to bring the responsible individuals to justice.

With adequate FY 2017 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. On 

average, the IRS awards approximately 9,500 contracts each year, worth approximately $2.1

billion. A 2014 Association of Certified Fraud Examiners report15 estimated that five 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 $105 million annually.

TIGTA focuses its contract fraud investigations on administrative, civil, and criminal violations. 

TIGTA’s contract fraud investigations add to the Nation’s treasury through court-ordered 

settlements and recoveries. With adequate FY 2017 resources, TIGTA could proactively identify 

 14 D. Utah Compl. filed July 9, 2013. 15 Association of Certified Fraud Examiners, Report to the Nations on Occupational Fraud and Abuse, 2014.
TIGTA - 26

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.

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 are used to make mission-critical 

decisions regarding investigative staffing, budgeting, and training.

The FY 2015 Percentage of Results from Investigative Activities was 93 percent, 14 percent 

above the target of 79 percent. This increase in investigative activities was due primarily to the 

finalization of a large number of cases opened in prior years that were accepted for prosecution. 

With the FY 2017 budget request, TIGTA plans to develop new special agents’ skills and 

abilities through training and mentoring programs designed to maintain a high level of 

performance. The FY 2017 budget request will provide funding for TIGTA to enhance its 

performance of investigative activities and support maintaining the performance goal of 81 

percent for FY 2017.

3.1.2 – Investigations Budget and Performance Plan

Dollars in Thousands

Investigations Budget Activity

Resource Level FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017

Actual Actual Actual Actual Actual Actual Enacted Request

 Appropriated Resources $94,579 $94,694 $94,390 $89,452 $95,748 $101,476 $102,175 $103,614

 Reimbursable Resources ($442) $949 $0 $400 $1,100 $429 $900 $900

Budget Activity Total $94,137 $95,643 $94,390 $89,852 $96,848 $101,905 $103,075 $104,514

Measure FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2015 FY 2016 FY 2017

Actual Actual Actual Actual Actual Actual Target Target Target

Percentage of Results 

from Investigative 

Activities

86.0 82.0 89.0 90.0 92.0 93.0 79.0 81.0 81.0
TIGTA - 27

Section 4 – Supplemental Information

4A – Summary of Investments

Technology Investments - TIGTA has no major IT investments based on criteria of the 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 including:

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

TIGTA's applications development responsible system design, development, testing, 

deployment and maintaining information applications systems (i.e., CRIMES, formerly 

known as PARIS).

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

of TIGTA's end user hardware (desktop, laptop, handheld devices), peripherals (local and 

shared printers) and software (operating systems, office automation suites, messaging and 

groupware), and help 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 & Enterprise Architecture - This investment represents an enterprise 

view of TIGTA's IT investments related to cyber security systems related to TIGTA's 

electronic systems in accordance with the Federal Information Security Management Act, 

and enterprise architecture services.

Law Enforcement Vehicles - Effective FY 2014, TIGTA acquires its vehicles by lease through 

the General Services Administration. However, TIGTA will maintain ownership of 

approximately 10 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 full 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 information technology and nontechnology 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.