Treasury Inspector General for Tax Administration 

Mission Statement 

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

integrity in the administration of the internal revenue laws. 

Program Summary by Budget Activity 

Dollars in Thousands 

Appropriation FY 2008 FY 2009 FY 2010

Enacted ARRA Enacted Request $ Change % Change

 Audit $52,959 $5,600 $55,186 $56,289 $1,103 2.0%

 Investigations $87,574 $1,400 $90,897 $92,711 $1,814 2.0%

Total Appropriated Resources $140,533 $7,000 $146,083 $149,000 $2,917 2.0%

Total FTE 835 - 835 835 - -

FY 2010 Priorities 

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

and mitigating intensified risks associated with modernization, security, addressing 

the tax gap, and human capital challenges facing the IRS; 

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

information; 

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

abuse and misconduct by IRS employees; 

• Conducting comprehensive audits, inspections, and evaluations that include 

recommendations for monetary benefits and enhancing IRS’ service to taxpayers; and 

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

problems and progress made to resolve them. 

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Table of Contents 

Treasury Inspector General for Tax Administration.................................................... 1

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

1A – Description of Bureau Vision and Priorities.......................................................... 3 

1B – Program History and Future Outlook..................................................................... 4 

Section 2 – Budget Adjustments and Appropriation Language................................... 8

2.1 – Budget Adjustments Table..................................................................................... 8 

2A – Budget Increases and Decreases Description ........................................................ 8 

2.2 – Operating Levels Table.......................................................................................... 9 

2.3 – Appropriations Detail Table ................................................................................ 10 

2B – Appropriations Language and Explanation of Changes....................................... 10 

2C – Legislative Proposals ........................................................................................... 11 

Section 3 – Budget and Performance Plan ................................................................... 12

3.1 – Budget by Strategic Outcome .............................................................................. 12 

3.2.1 – Audit Budget and Performance Plan ................................................................ 14 

3.2.2 – Investigations Budget and Performance Plan ................................................... 17 

Section 4 – Supporting Materials.................................................................................. 18

4A – Human Capital Strategy Description ................................................................... 18 

4.1 – Summary of IT Resources Table ......................................................................... 20 

4B – Information Technology Strategy ........................................................................ 21 

4.2 – Program Assessment Table.................................................................................. 24 

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Section 1 – Purpose

1A – Description of Bureau Vision and Priorities 

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

Congress as a part of the Internal Revenue Service Restructuring and Reform Act of 1998 

(RRA 98). TIGTA’s audits and investigations protect and promote the fair administration 

of the American tax system. TIGTA conducts audits that advise the American people, 

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

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

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

maintaining fair and equitable treatment of taxpayers. TIGTA’s 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 

Federal tax administration system. TIGTA ensures that the American taxpayer can have 

confidence that the IRS collects nearly $3 trillion in tax revenue in an effective and 

efficient manner using a system that is just and equitable. 

TIGTA’s FY 2010 Budget request is $149,000,000, an increase of 2.0 percent above the 

FY 2009 enacted level. These requested resources will finance critical audit, 

investigative, and inspection and evaluation services, protecting the integrity of tax 

administration on behalf of the Nation’s taxpayers. TIGTA’s audit, investigative, and 

inspection and evaluation priorities include: 

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

and mitigating intensified risks associated with modernization, security, addressing 

the tax gap, and human capital challenges facing the IRS; 

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

information; 

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

abuse or misconduct by IRS employees; 

• Conducting comprehensive audits, inspections, and evaluations that include 

recommendations for monetary benefits and enhancing IRS’ service to taxpayers; and 

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

problems and progress made to resolve them. 

 

Additionally, TIGTA’s strategic goals contribute to the Department’s goals and 

objectives. These strategic goals are to: 

 

• Promote the Economy, Efficiency, and Effectiveness of Tax Administration; 

• Protect the Integrity of Tax Administration and; 

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• Be an Organization that Values Its People. 

In FY 2010, TIGTA faces the challenge of adapting its oversight activities to address 

increasingly complex and high-risk issues associated with IRS operations. Some of these 

issues include detection and investigation of fraud and electronic crime, review of 

procurement activities, safeguarding taxpayer privacy, and an increasing number of 

requests for IRS program reviews from Congress and other IRS stakeholders. Each of 

these issues presents significant challenges for TIGTA and the IRS. 

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

1978 (as amended), the Treasury Inspector General for Tax Administration submits the 

following information related to its requested budget for FY 2010: 

• the aggregate budget request for the operations of TIGTA is $149,000,000, 

• the portion of this amount needed for TIGTA training is $2,536,000. 

The amount requested for training satisfies all TIGTA training needs for fiscal year 2010. 

1B – Program History and Future Outlook 

Previously a longstanding enforcement office within the IRS, TIGTA was established as 

an independent office in January 1999 in accordance with RRA 98. TIGTA is mandated 

to provide independent audit, investigative, and inspection and evaluation services 

necessary to improve the quality and credibility of IRS oversight, including oversight of 

the IRS Chief Counsel and the IRS Oversight Board. TIGTA’s audits, investigations, and 

inspections and evaluations are integral to the efficient and equitable application of the 

Nation’s tax laws, and thereby ensure that this critical source of Federal revenue is 

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

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

IRS operations and investigate exploited weaknesses in tax administration. 

 

TIGTA continues to provide comprehensive coverage and oversight of all aspects of the 

IRS’ operations. In FY 2008, TIGTA’s overall accomplishments included: 

Ensuring Taxpayer Privacy and Security: Millions of taxpayers entrust the IRS with 

sensitive financial and personal data, which is processed and stored by IRS computer 

systems. This trust is the cornerstone of the Nation’s voluntary tax compliance system. 

However, increased connectivity of computer systems, the increasingly volatile threat 

environment resulting from increased terrorist and hacker activity, and increasing reports 

of identity theft from both the private and public sectors emphasize the importance of 

protecting taxpayer data. In FY 2008, TIGTA’s Office of Audit (OA) issued reports 

addressing network and database security risks and provided the IRS with 

recommendations to improve controls in both areas. 

To protect sensitive taxpayer information from being jeopardized, TIGTA proactively 

identifies IRS employees who inappropriately access and/or disclose private taxpayer 

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information. These violations, known as unauthorized access (UNAX), are often the 

initial phase of IRS employee misconduct and frequently result in the uncovering of other 

criminal violations, including fraud and identity theft. IRS employees who are found to 

have committed UNAX violations are subject to Federal prosecution, termination of 

employment, or other disciplinary action. Since enactment of the Taxpayer Browsing 

Protection Act in August 1997, TIGTA investigations have resulted in more than 2,000 

adverse personnel actions taken by the IRS and 196 criminal prosecutions for UNAX 

violations through September 2008. 

Although TIGTA’s audit efforts examine a wide range of IRS computer systems and 

address overall computer and physical security at the IRS, investigative efforts prior to 

FY 2008 monitored only one IRS system of records, the Integrated Data Retrieval System 

(IDRS), containing confidential taxpayer information. Over the past three years, TIGTA 

initiated an average of 468 criminal investigations that involved UNAX per year. 

TIGTA’s proactive program for identifying UNAX was responsible for the initiation of 

between 50 and 59 percent of these UNAX investigations. Of the proactively identified 

UNAX leads closed in FY 2008, 89 percent were substantiated by TIGTA investigators 

as UNAX violations and 28 percent resulted in the identification of further potential 

criminal violations, including falsification of records, fraud, embezzlement and identity 

theft. Last year, TIGTA established an investigative group to keep pace with the IRS’ 

modernization efforts. As the IRS currently utilizes over 240 computer applications 

which may contain sensitive IRS employee and taxpayer information and is continuing a 

vigorous implementation of modernized systems, TIGTA is now better positioned to 

provide appropriate oversight of those efforts, and to investigate the criminal violations 

committed by those who abuse the new systems. 

Tax Compliance: TIGTA’s increased community outreach efforts have helped the IRS 

to deliver quality customer service to taxpayers and the tax practitioner community. 

TIGTA worked diligently to make contact with large segments of the IRS workforce and 

other external entities. By doing so, TIGTA developed relationships with these groups 

that assist in identifying crimes against the IRS and taxpayers. The outreach efforts 

resulted in increased reports of bribery, UNAX violations, and other offenses that 

undermine effective tax administration. Between October 2007 and September 2008, 

TIGTA provided presentations to more than 69,000 IRS employees and external entities. 

Specifically, TIGTA’s Office of Investigations (OI) provided integrity and fraud 

awareness presentations to revenue officers and revenue agents at their continuing 

professional education conferences. During this same period, OI worked to educate tax 

professionals by providing 72 awareness presentations to tax practitioners and preparers 

at professional conferences. 

Advising Congress: Between October 1, 2007 and September 30, 2008, TIGTA 

provided 4 testimonies, 19 briefings, and 25 responses to Congress regarding audit, 

investigative, and inspection and evaluation activities. Through direct communication, 

TIGTA aims to address the interest of Congressional committees on critical issues 

involving IRS operations. In FY 2008, TIGTA’s Office of Inspections and Evaluations 

(I&E) began its first year of operation as a separate office after a successful pilot project 

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during FY 2006 and FY 2007. I&E complements the work of our audit and investigative 

functions and provides TIGTA with additional flexibilities and capabilities to meet its 

mission and address increasing requests for IRS program reviews from Congress and 

other IRS stakeholders. The scope of the group’s efforts ranges from answering 

Congressional concerns to evaluating IRS’ ability to administer the tax laws. I&E will 

provide TIGTA the ability to conduct in-depth evaluations of major IRS functions, 

activities, and programs. 

I&E has positioned TIGTA well to respond to external stakeholders in a rapid response 

mode. As the group continues its work, we expect its influence in overseeing tax 

administration to grow and its service of informing interested parties to expand. 

Fraud and Electronic Crime: TIGTA’s reviews have identified IRS computer 

weaknesses that could jeopardize the security of personally identifiable information. The 

sensitivity of the data makes the IRS an attractive target for employees, hackers, and 

others who could use the information for fraud and identity theft. TIGTA’s audit, 

investigative, and inspection and evaluation work provides for coverage of this growing 

national problem, providing proactive prevention and detection efforts that are required in 

this highly vulnerable and ever-evolving area. As described in Presidential Decision 

Directive NSC-63, IRS operations that fund the Federal government are part of the 

Nation’s critical infrastructure. Degradation of the public’s trust in the tax system 

leading to a decline in voluntary compliance represents a potential risk to national 

security. 

Audit Outcomes: TIGTA’s audits not only focus on the economy and efficiency of IRS 

functions, but also the protection of taxpayers’ rights. TIGTA strives to protect the 

integrity of America’s tax system. Among other significant tax administration related 

issues, TIGTA reports have identified opportunities for the IRS to enhance its tax 

compliance initiatives, including improved identification of unreported self-employment 

taxes and consistent use of penalties to promote fairness in the tax system and encourage 

voluntary compliance. Between October 1, 2007, and September 30, 2008, TIGTA 

issued 179 reports identifying approximately $2.4 billion in potential financial benefits 

(i.e., cost savings, increased/protected revenue, taxpayer rights and entitlements, and 

inefficient use of resources). These reports also impacted approximately 5.7 million 

taxpayers’ 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. These audits returned $53 for each $1 invested in FY 2008. 

Investigative Outcomes: OI investigates threats to America’s tax system which could 

impede the collection of revenues or which could erode public confidence. Between 

October 1, 2007, and September 30, 2008, 78 percent of the 3,662 closed investigations 

generated results, including 1,569 cases of employee misconduct referred for potential 

disciplinary action and 171 cases accepted for prosecution. Unauthorized access to 

confidential tax information remains a significant problem for the IRS. During the same 

period, TIGTA opened 434 new UNAX cases and closed 491 cases, 471 of which 

resulted in personnel action against IRS employees. 

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Inspections and Evaluations Outcomes: I&E provided regular status reports on the IRS’ 

private debt collection initiative and produced analysis related to the recent flooding of 

the IRS headquarters. Additionally, I&E has reported on several pertinent issues 

including Protecting Hardcopy Personally Identifiable Information from Identity Theft, 

Enhancing Controls to Further Strengthen Lockbox Bank Oversight, and Preventing 

Abuses of Religious Compensatory Time. Planned evaluations will result in 

recommendations to streamline operations, enhance data quality, and improve the 

efficiency and effectiveness of IRS programs. 

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Section 2 – Budget Adjustments and Appropriation Language 

2.1 – Budget Adjustments Table 

Dollars in Thousands 

Inspector General for Tax Administration FTE Amount

FY 2009 Enacted 835 146,083

Changes to Base: 

Maintaining Current Levels (MCLs): - $3,264

Across the Board Program Reduction - (504)

Non-Pay Inflation Adjustment - 318

Pay Annualization - 1,110

Pay Inflation Adjustment - 2,340

Non-Recurring Costs: - ($347)

No obligation to fund CIGIE - (347)

Subtotal FY 2010 Changes to Base - $2,917

Total FY 2010 Base 835 149,000

Total FY 2010 President's Budget Request 835 149,000

2A – Budget Increases and Decreases Description 

Maintaining Current Levels (MCLs) ...........................................+$3,264,000 / +0 FTE 

Across the Board Program Reduction -$504,000 / +0 FTE 

This amount reflects a calculated across the board program reduction. 

Non-Pay Inflation Adjustment +$318,000 / +0 FTE 

Funds are requested for non-pay related items such as contracts, travel, supplies, 

equipment and GSA rent. 

Pay Annualization +$1,110,000 / +0 FTE 

Funds are requested for the FY 2010 cost of the January 2009 pay raise. 

Pay Inflation Adjustment +$2,340,000 / +0 FTE 

Funds are requested for the January 2010 pay raise. 
2.2 – Operating Levels Table 

Bureau: Inspector General for 

Tax Administration

FY 2008 

Enacted

FY 2009 

ARRA

FY 2009 

President's 

Budget

Congressio

nal Action

Including 

Rescission

FY 2009 

Enacted 

Level

Proposed 

Reprogra

mmings

FY 2009 

Proposed 

Operating 

Level

FY 2010 

Requested 

Level

% Change

FY 2009 

to FY 2010

 

FTE 835 0 835 0 835 0 835 835 0.00%

Object Classification: 

11.1 - Full-time permanent 75,901 4,501 78,314 0 78,314 0 78,314 80,624 2.95%

11.3 - Other than full-time 576 0 576 0 576 0 576 593 2.95%

permanent 

11.5 - Other personnel 9,398 497 9,131 0 9,131 0 9,131 9,443 3.42%

compensation 

12 - Personnel benefits 25,226 1,603 26,298 0 26,298 0 26,298 27,109 3.08%

21 - Travel and transportation of 4,552 301 4,834 0 4,834 0 4,834 4,694 -2.90%

persons 

22 - Transportation of things 24 0 24 0 24 0 24 24 0.00%

23.1 - Rental payments to GSA 8,024 0 8,952 0 8,952 0 8,952 9,143 2.13%

23.2 - Rental payments to others 282 0 288 0 288 0 288 288 0.00%

23.3 - Comm, utilities, and misc 8,688 0 2,570 0 2,570 0 2,570 2,570 0.00%

charges 

24 - Printing and reproduction 8 0 8 0 8 0 8 8 0.00

25.1 - Advisory and assistance 1,152 0 1,175 0 1,175 0 1,175 1,135 -3.40%

services 

25.2 - Other services 921 0 986 0 986 0 986 921 -6.59%

25.3 - Other purchases of goods 0 0 6,695 347 7,042 0 7,042 6,710 -4.71%

and services from Govt. accounts 

25.4 - Operation and maintenance 407 0 407 0 407 0 407 407 0.00%

of facilities 

25.5 - Research and development 0 0 0 0 0 0 0 0 0.00

contracts 

25.7 - Operation and maintenance 1,252 0 1,277 0 1,277 0 1,277 1,232 -3.52%

of equip 

26 - Supplies and materials 1,170 98 1,193 0 1,193 0 1,193 1,164 -2.43%

31 - Equipment 2,750 0 2,805 0 2,805 0 2,805 2,732 -2.60%

42 - Insurance claims and 150 0 150 0 150 0 150 150 0.00%

indemnities 

91.0 - Confidential Expenditures 52 0 53 0 53 0 53 53 0.00%

Total Budget Authority $140,533 $7,000 $145,736 $347 $146,083 $0 $146,083 $149,000 2.00%

 

Budget Activities: 

Audit 52,959 5,600 55,055 131 55,186 0 55,186 56,289 2.00%

Investigations 87,574 1,400 90,681 216 90,897 0 90,897 92,711 2.00%

Total Budget Authority $140,533 $7,000 $145,736 $347 $146,083 $0 $146,083 $149,000 2.00%

 

%

%

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2.3 – Appropriations Detail Table 

Dollars in Thousands 

2.3 Appropriation Detail Table

(Dollars in Thousands)

This chart displays total resources available by budget activity, including funding and FTE.

% Change

FY 2008 FY 2008 FY 2009 FY 2009 FY 2010 FY 2009

Resources Available for Obligation Obligations Enacted ARRA Enacted Request to FY 2010

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

New Appropriated Resources:

Audit 349 $50,852 349 $52,959 0 $5,600 349 $55,186 349 $56,289 0.00% 2.00%

Investigations 486 89,161 486 87,574 0 1,400 486 90,897 486 92,711 0.00% 2.00%

Subtotal New Appropriated Resources 835 $140,013 835 $140,533 0 $7,000 835 $146,083 835 $149,000 0.00% 2.00%

Other Resources:

Offsetting Collections - Reimbursable 3 1,266 3 900 0 0 3 900 3 1,300 0.00% 44.44%

Subtotal Other Resources 3 $1,266 3 $900 0 $0 3 $900 3 $1,300 0.00% 44.44%

Total Resources Available for Obligation 838 $141,279 838 $141,433 0 $7,000 838 $146,983 838 $150,300 0.00% 2.26%

2B – Appropriations Language and Explanation of Changes 

Appropriations Language Explanation of Changes 

DEPARTMENT OF THE TREASURY 

TREASURY INSPECTOR GENERAL FOR TAX 

ADMINISTRATION 

Federal Funds 

General and Special Funds: 

SALARIES AND EXPENSES 

For necessary expenses of the Treasury Inspector General 

for Tax Administration, in carrying out the Inspector 

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

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

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

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

be determined by the Inspector General for Tax 

Administration, not to exceed $6,000,000 for official 

travel expenses; and not to exceed $500,000 for 

unforeseen emergencies of a confidential nature, to be 

allocated and expended under the direction of the 

Inspector General for Tax Administration [$146,083,000] 

$149,000,000; and of which not to exceed $1,500 shall be 

available for official reception and representation 

expenses. (Department of the Treasury Appropriations 

Act, 2009)

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2C – Legislative Proposals 

TIGTA does not have any legislative proposals for FY 2010. 

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Section 3 – Budget and Performance Plan

This table lists all FY 2010 resources by strategic goal, objective and outcome outlined in 

the FY 2007-2012 Treasury Department Strategic Plan. The Treasury Strategic Plan is a 

corporate level plan for the Department that provides a description of what the Agency 

intends to accomplish over the next five years. 

For detailed information about the FY 2007-2012 Treasury Strategic Plan, please go to: 

http://www.treas.gov/offices/management/budget/strategic-plan/

3.1 – Budget by Strategic Outcome 

Dollars in Thousands 

Treasury Strategic Outcome FY 2009 

Enacted

FY 2009 

Recovery

FY 2010 

Request

Percent 

Change

 Accountability & trans 146,983 7,000 150,300 2.3%

Total $146,983 $7,000 $150,300 2.3%

3A – Audit ($56,289,000 from direct appropriations and $551,000 from reimbursable 

programs): OA’s mission is to promote the sound administration of the Nation’s tax laws 

by conducting comprehensive, independent performance and financial audits of IRS 

programs. 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. Moreover, implementation of TIGTA audit recommendations results in cost 

savings and increased or protected revenue, reduction of taxpayer burden, protection of 

taxpayer rights and entitlements, protection of taxpayer privacy, and protection of IRS 

resources. 

OA strategically evaluates IRS programs, activities, and functions so that TIGTA 

resources are expended in the areas of highest vulnerability. To carry out this goal, OA 

develops an annual audit plan that communicates its priorities and incorporates both 

statutory audit coverage and high risk audit work identified through an annual risk 

assessment process and stakeholder requests. By focusing on critical areas, OA ensures 

that TIGTA audits identify and recommend improvements in the most vulnerable IRS 

programs. 

As of September 30, 2008, 179 audit reports produced potential financial benefits of 

approximately $2.4 billion and potentially impacted approximately 5.7 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. These reports included the following aspects of tax administration: 

Tax Compliance: The IRS estimated the gross tax gap, defined as the difference between 

the estimated amount taxpayers owe and the amount they voluntarily and timely pay for a 

tax year, to be $345 billion in Tax Year 2001. This gap exemplifies the considerable 

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challenges the IRS faces in collecting sufficient revenue and the Federal tax system’s 

critical dependence on voluntary compliance. 

Self-employment tax is estimated to make up about $39 billion or 11 percent of the total 

gross tax gap, making it one of the largest components of the tax gap. An FY 2008 OA 

audit recommended that the IRS improve its processes for identifying taxpayers who are 

subject to but do not pay self-employment taxes. The report estimated that the IRS could 

assess an additional $39 billion in Social Security and Medicare taxes over a five-year 

period by making the changes recommended in the report. 

In a similar vein, the IRS established a Withholding Compliance Task Force in January 

2004 that estimated approximately $7.6 billion of potentially collectible taxes is lost 

annually to withholding non-compliance. An FY 2008 audit aimed at evaluating the 

effectiveness of the IRS’ actions on under withheld tax compliance cases estimated that 

the IRS could potentially have realized $34.5 million in additional tax withholding if the 

Withholding Compliance Program ensured employers complied with notice instructions. 

TIGTA will continue to work with the IRS to identify other opportunities to reduce the 

tax gap and improve the efficiency and effectiveness of America’s tax system. 

Quality of Taxpayer Services: During FY 2008, there was a great deal of public and 

Congressional interest in the IRS implementation of the Economic Stimulus Act of 2008. 

Because of the visibility of the program, the potential risks associated with the program, 

and the rapid implementation of the program, TIGTA auditors were actively involved in 

monitoring key aspects of this program. During OA’s review of the IRS’ planning efforts, 

issues were brought to IRS management’s attention while the audit was being conducted. 

This level of cooperation enabled the IRS to address potential problems immediately. 

An audit of the financial management of Low Income Tax Clinics revealed that 

additional guidance and oversight was necessary to ensure that grantees properly manage 

and report on their use of grant funds. OA recommendations have resulted in changes to 

this program to strengthen oversight of this program. 

Privacy and Security: Millions of taxpayers entrust the IRS with sensitive financial and 

personal data stored in and processed by IRS computer systems. Recent reports of 

identity theft from both the private and public sectors have heightened awareness of the 

need to protect this data. The risks that sensitive data or computer systems could be 

compromised and computer operations disrupted continue to increase. These risks are 

caused by: internal factors such as increased connectivity of computer systems and 

increased use of portable laptop computers, and external factors such as the volatile threat 

environment related to increased terrorist and hacker activity. 

TIGTA audits identified a variety of security threats in IRS computer systems. For 

example, OA identified approximately 1,800 internal web servers on the IRS network 

which had not been approved for connection to the network as well as approximately 

2,100 internal web servers that had at least one security vulnerability. In another audit, a 

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scan of IRS databases identified 369 installation accounts which had blank passwords or 

which used the default passwords. These audits provide recommendations which enhance 

information system security. 

Procurement: OA found that the IRS’ use of performance-based acquisitions was well 

below goals established by the Federal Government in part as a result of a lack of 

experienced personnel. IRS management has distributed a memorandum encouraging 

program office management to emphasize the use of performance-based acquisitions and 

encouraging training. 

OA also conducted a trend analysis of common issues and findings identified in 

previously issued invoice and voucher audits which found that the control environment 

was ineffective and did not prevent overpayments to contractors. In response to OA’s 

audits, IRS Procurement has developed a Guidebook for Acquisition Practices that 

provides a detailed process for reviewing invoices and vouchers. 

Human Capital: TIGTA audits have examined IRS human capital programs. As the 

result of OA recommendations, the IRS is developing a strategic leadership succession 

plan as well as a comprehensive, agency-wide workforce planning process. 

Other Resources: TIGTA receives $551,000 in reimbursement to support activity related 

to Defense Contract Audit Agency audits conducted on behalf of the IRS and other 

activity conducted on behalf of the Department of the Treasury. 

3.2.1 – Audit Budget and Performance Plan 

Audit Budget Activity

FY 2006 FY 2007 FY 2008 FY 2009 FY 2010

Resource Level Obligated Obligated Obligated ARRA Enacted Request

 Appropriated Resources $48,916 $49,087 $50,852 $5,600 $55,186 $56,289

 Reimbursable Resources $915 $300 $539 $0 $500 $551

Total Resources $49,831 $49,387 $51,391 $5,600 $55,686 $56,840

Budget Activity Total $49,831 $49,387 $51,391 $5,600 $55,686 $56,840

FY 2006 FY 2007 FY 2008 FY 2009 FY 2010 Budget Activity Performance Measure Actual Actual Actual ARRA Target Target

Audit Percentage of audit products delivered 0 68 65 65 65 65 

when promised to stakeholders (%) (Oe) 

Audit Percentage of recommendations made that 0 90 85 83 83 83 

have been implemented (%) (Oe) 

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

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

Description of Performance: The likelihood that TIGTA’s products will be used is 

enhanced 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). 

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Additionally, TIGTA makes recommendations designed to improve administration of the 

Federal tax system. The IRS must implement these recommendations in order for our 

work to produce financial or non-financial benefits. This measure assesses TIGTA’s 

effect on improving the IRS’ accountability, operations, and services. Since the IRS 

needs time to act on recommendations, TIGTA utilizes the Department’s Joint Audit 

Management Enterprise System to track the percentage of recommendations made four 

(4) years ago that have been implemented, rather than the results of our activities during 

the fiscal year in which the recommendations are made. TIGTA is able to track its 

recommendations that have not been implemented by the IRS. TIGTA also has a formal 

process with the IRS for closing out unimplemented recommendations for which 

circumstances may have changed, or for when the IRS has taken alternative corrective 

measures that address concerns identified by TIGTA. 

3B – Investigations ($92,711,000 from direct appropriations and $749,000 from 

reimbursable programs): While most Offices of Inspectors General focus primarily on 

fraud, waste, and abuse, TIGTA’s mission is more extensive. 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 violations and administrative misconduct by IRS 

employees, protects the IRS against external attempts to corrupt tax administration, and 

ensures IRS employee safety and IRS data and infrastructure security. The following 

summaries highlight TIGTA’s investigative efforts in these three core areas: 

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

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

misconduct. Over 50 percent of TIGTA’s current investigations involve alleged 

employee misconduct. These investigations of employee misconduct allegations include 

extortion, theft, taxpayer abuse, false statements, and financial fraud. In addition, an 

integral part of the employee integrity program involves investigations of unauthorized 

access to confidential taxpayer records by IRS employees. 

Employee and Infrastructure Security: In 1998, the President designated IRS operations 

as a critical infrastructure.1

 TIGTA meets the challenge of maintaining IRS employee 

and infrastructure security by conducting investigations in reaction to incidents in which 

IRS employees, facilities, and infrastructure are sabotaged, threatened, or assaulted. 

Potential threats to tax administration are identified by TIGTA’s administration of a 

Criminal Intelligence Program that utilizes law enforcement and intelligence resources to 

proactively identify individuals and groups who may pose a threat to tax administration. 

Congressional concern regarding the magnitude of uncollected revenue has prompted the 

IRS to intensify enforcement activities. Heightened enforcement is likely to cause a rise 

 

1 Presidential Decision Directive NSC-63.

TIGTA - 15 
in external threats to IRS employees and infrastructure. Both TIGTA’s proactive and 

reactive initiatives are critical to mitigating such future risks. OI currently participates on 

the Federal Bureau of Investigation (FBI) Joint Terrorism Task Forces and conducts 

criminal intelligence gathering to uncover and track external threats to tax administration 

from individuals, anti-government groups, and terrorists. From FY 2005 through the end 

of FY 2008, OI initiated 609 investigations of assaults and/or threats made against IRS 

employees, and 196 investigations of assaults and/or threats made against IRS facilities. 

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

administration impede the IRS’ ability to collect revenue. OI’s investigations of external 

attempts to corrupt or interfere with tax administration include: bribes offered by 

taxpayers to compromise IRS employees; the use of fraudulent IRS documentation to 

commit crimes; taxpayer abuse by tax practitioners; impersonation of IRS employees; 

and the corruption of IRS programs through procurement fraud. 

In FY 2010, OI expects major IRS programs to be at high risk for corruption of Federal 

tax administration and thus require intensified oversight. Particularly important to 

TIGTA are phishing scams that falsely depict e-mails from the IRS.2

 Such schemes 

attempt to retrieve a user’s Social Security number and banking information by 

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

refunds. The IRS, with investigative support provided by OI, has identified 3,810 

phishing sites between November 2005 and October 2008. Oversight in this area is 

necessary to ensure that misuse of the IRS name, impersonation of an IRS employee, and 

identity theft incidents are resolved properly. 

With the IRS focusing on increased revenue collection from delinquent taxpayers, OI 

anticipates a rise in attempts to bribe IRS employees involved in those collection 

activities. During FY 2008, OI conducted 51 investigations into bribery by non-IRS 

employees. In addition, OI conducted 169 investigations of attempts to manipulate or 

corrupt IRS systems and operations, and 605 investigations into fraud and other related 

activities. 

Current resources committed to addressing external security risks include four special 

agents working full-time and 35 special agents working part-time on domestic terrorism. 

The office also includes one intelligence analyst gathering information to protect against 

external threats. OI presently oversees security for the top 15 at-risk IRS locations, as 

identified by IRS Physical Security and Emergency Preparedness. Proactive measures in 

this area are critical to preventing breaches of security and deterring threats in future 

years. 

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

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

its dealings with the IRS, thereby promoting voluntary compliance with Federal tax laws. 

 

2

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

order to solicit private information for the purpose of identity theft. 

TIGTA - 16 
Other Resources: TIGTA receives $749,000 in offsetting collections and 

reimbursements to support activity related to the Inspector General Criminal Investigator 

Academy and other activity conducted on behalf of the Department of the Treasury. 

3.2.2 – Investigations Budget and Performance Plan 

Investigations Budget Activity

FY 2006 FY 2007 FY 2008 FY 2009 FY 2010

Resource Level Obligated Obligated Obligated ARRA Enacted Request

 Appropriated Resources $82,686 $83,427 $89,161 $1,400 $90,897 $92,711

 Reimbursable Resources $711 $627 $727 $0 $400 $749

Total Resources $83,397 $84,054 $89,888 $1,400 $91,297 $93,460

Budget Activity Total $83,397 $84,054 $89,888 $1,400 $91,297 $93,460

FY 2006 FY 2007 FY 2008 FY 2009 FY 2010 Budget Activity Performance Measure Actual Actual Actual ARRA Target Target

Investigations Percentage of results from investigative 79 81 78 78 78 78 

activities (%) (Oe) 

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

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

Description of Performance: Examples of the types of results generated from 

investigative activities include: bribes offered by taxpayers to compromise IRS 

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

and IRS financial reporting instruments; and impersonation of IRS officials. As of 

September 30, 2008, actual performance has exceeded expectations (actual performance 

was 78 percent, while the target was 76 percent). These results are indicative of OI’s 

continuous focus on quality investigative activities. 

 

For detailed information about each performance measure, including definition, 

verification and validation, please go to: 

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

TIGTA - 17 
Section 4 – Supporting Materials 

4A – Human Capital Strategy Description 

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

Department. One of the major goals of the Department is to “be an organization that 

values its people.” The objective associated with this goal is to “ensure a high-quality, 

diverse, and motivated workforce with the knowledge, skills, and abilities needed to 

produce quality products in an efficient and effective manner.” To support this goal, 

TIGTA’s performance management program differentiates levels of employee 

performance, incorporates TIGTA’s strategic goals and objectives, and holds employees 

accountable for performance. During FY 2010, TIGTA will continue implementation of 

the updated Strategic Human Capital Plan developed during FY 2009. 

Over the past ten years, TIGTA’s employee population has declined 17%. Authorized 

FTE have declined from 1,000 in 1999 to a current level of 835. Vacancies brought on by 

retirements and other employee departures reduced FTE realized in FY 2008 to 784. One 

of the most significant human capital challenges facing TIGTA is the impending 

retirement tidal wave. Approximately 38 percent of all TIGTA employees will be 

retirement eligible by September 30, 2011. This is especially troubling since the skills 

required of our auditors, investigators, and systems specialists are highly specialized and 

require several years to develop to the journeyman level. A continued decline in 

personnel strength threatens TIGTA’s overall ability to effectively fulfill its core mission. 

If TIGTA is unable to fill retirees’ vacated positions with skilled investigators, it will 

reduce TIGTA’s enforcement capacity and circumscribe efforts to combat IRS employee 

misconduct and external threats to the security and integrity of IRS personnel and 

infrastructure. FTE attrition further reduces opportunities to examine high-risk areas and 

thereby reduces financial benefits from audit recommendations and impacts fewer 

taxpayer accounts. Unabated attrition would also require TIGTA to curtail, delay, and/or 

fail to initiate reviews of high-risk areas and/or eliminate entire programs. Succession 

planning efforts are aimed at addressing these potential risks to TIGTA’s operations. 

TIGTA must address critical staffing deficiencies in terms of having the right number of 

people with the right skills to accomplish its mission. Because of the IRS’ modernization 

effort and its increasingly computerized operating systems and environment, TIGTA 

faces critical skill gaps. Auditors and criminal investigators with strong analytical skills 

and experience using business intelligence tools to identify fraud and other improprieties 

in IRS computer systems are needed. 

To help address these challenges, TIGTA implemented in FY 2009 a bureau-wide 

electronic learning management system containing a skills assessment program that 

identifies the critical skills needed for each of TIGTA’s major occupations and provides a 

means to assess resident skill levels. TIGTA will continue its strategic recruitment 

program to fill critical vacancies and align future hiring in geographic areas where most 

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of TIGTA’s workload is located. Additionally, TIGTA will enhance its Senior Executive 

Service development program to grow future leaders within the organization. 

While the nature and sensitivity of TIGTA’s work limits the possible use of on-site 

contractors, most of the routine human resources, accounting, travel, and acquisitions 

work are outsourced to the Bureau of the Public Debt’s Administrative Resource Center. 
4.1 – Summary of IT Resources Table 

Dollars in Thousands 

Information Technology Investments 1/ FY 2007 FY 2008 FY 2009 FY 2010

% Change % Change 

& Earlier Budget from FY08 from FY09 

Major IT Investments / Funding Source Budget Activity Enacted Enacted Request to FY09 Request to FY10

2/

Subtotal, Major IT Investments N/A N/A N/A N/A N/A N/A

TIGTA: Audit and 

Performance and Results Information System (PARIS) Investigations Activity $1,000 $1,000 $1,000 0.0% $574 -42.6%

TIGTA: Audit and 

PARIS Property Module (PPM) Investigations Activity $500 $500 $500 0.0% $149 -70.2%

TIGTA: Audit and 

Non-Major IT Investments Investigations Activity $1,500 $1,500 $1,500 0.0% $723 -51.8%

TIGTA: Audit and 

TIGTA End User Systems and Services Investigations Activity $2,450 $8,000 $8,293 3.7% $2,678 -67.7%

TIGTA: Audit and 

Telecommunications Systems and Services Investigations Activity $1,329 $3,100 $3,300 6.5% $2,465 -25.3%

TIGTA: Audit and 

Data Center Systems and Services Investigations Activity $267 $1,000 $1,000 0.0% $4,003 300.3%

TIGTA: Audit and 

IT Security 3/ Investigations Activity $0 $750 $0 -100.0% $0 0.0%

TIGTA: Audit and 

Infrastructure Investments 4/ Investigations Activity $4,046 $12,850 $12,593 -2.0% $9,146 -27.4%

TIGTA: Audit and 

Consolidated Enterprise Content Management 5/ Investigations Activity $0 $0 $129 0.0% $0 -100.0%

TIGTA: Audit and 

Consolidated Identity Management 5/ Investigations Activity $0 $0 $128 0.0% $0 -100.0%

TIGTA: Audit and 

Enterprise Architecture Investigations Activity $250 $250 $250 0.0% $275 10.0%

TIGTA: Audit and 

Total IT Investments Investigations Activity $5,796 $14,600 $14,600 0.0% $10,144 -30.5%

1/ This chart includes appropriated resources only, and may not reflect total project costs.2/ This column reflects appropriated resources provided to a project in FY 2007 and any previous years.3/ The $750 thousand decrease reflects the impact of eliminating IT Security as a separate investment and reflecting those resources with End User and Telecommunication systems and services.4/ The $8.8 million increase in Infrastructure from FY 2007 to FY 2008 is due to the inclusion of TIGTA costs which were previously not reflected.5/ The resources were realigned from End User systems and services to be reflected in the new Enterprise Content Management and Identity Management consolidated investments.

TIGTA - 20 
4B – Information Technology Strategy 

The Office of Information Technology (OIT) provides a full suite of information 

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

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

completion of TIGTA’s mission. OIT routinely works with auditors, investigators, and 

inspection and evaluation personnel, providing integrated support and/or data analysis 

services to foster the independence of TIGTA oversight and the integrity of its audit and 

investigative findings. 

End User Systems and Services: OIT provides traditional end-user systems services for 

all TIGTA employees. This includes the provisioning of personal computers, 

productivity software, electronic mail and other local area network services, such as 

network storage for effective data backup and recovery. OIT end user systems and 

services are based on a standardized tool suite for internal TIGTA business operations. 

This tool suite is augmented to provide specialized software tools that permit auditors, 

investigators, and inspection and evaluation personnel to access and analyze data residing 

on a wide variety of IRS and other governmental information systems. OIT monitors 

these tools to ensure security and availability, and to determine when technology 

maintenance and refreshment activities are needed for effective protection of TIGTAaccessed data. 

OIT provides TIGTA employees with enterprise collaboration tools that allow end users 

to form virtual work teams from any TIGTA office or broadband Internet connection. 

This collaboration capability will reduce travel costs over time and greatly enhances 

TIGTA’s ability to function throughout a widespread disaster event. 

Telecommunications Systems and Services: OIT supports a Wide Area Network (WAN) 

with access points throughout the continental United States, Hawaii, and Puerto Rico in 

direct support of a geographically distributed audit, investigative, and inspection and 

evaluation workforce. The WAN provides adequate bandwidth for internal and external 

data transmissions while providing secure access to TIGTA resources, and other 

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

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

well as for cost-effective access to IRS information systems. The WAN also enables 

secure, remote access from alternative work locations, supporting an award-winning 

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

permits investigators to safely conduct field operations with reliable wireless 

communication devices. 

Data Center Systems and Services: OIT operates information systems at various offices. 

In accordance with the OIT Strategic Plan and continuing cost containment measures, 

OIT is consolidating information technology services, where feasible, into data center 

facilities. The consolidation effort is designed to increase information system and 

resource utilization, and eliminate unneeded redundancies while improving TIGTA’s 

ability to support core audit and investigative activities. As part of a TIGTA data center, 

TIGTA - 21 
OIT provides extensive data analysis services in direct support of audit and investigative 

activities. For example, these services permit TIGTA to meet its responsibilities under 

the Taxpayer Browsing Protection Act of 1997. Specifically, the services are designed to 

analyze large volumes of data so that potential UNAX violations may be identified. 

Information Security Services: OIT provides Financial Information Systems 

Management Act (FISMA) support services to TIGTA. This support comes in three 

areas. The first support area is Information Integrity. OIT provides guidance on security 

controls and processes to help maintain the confidentiality, availability, and accuracy of 

its business information. The second support area is Insurance and Assurance which 

addresses information risk management. This area provides TIGTA with information on 

the risk factors it is facing with its information systems. This helps TIGTA in making 

decisions on accepting, avoiding, or mitigating assessed risks around its information 

systems. The third support area is Regulatory Compliance. OIT provides TIGTA 

support in interpreting guidance from regulatory sources and reporting TIGTA’s 

compliance in meeting FISMA requirements. 

Enterprise Architecture: TIGTA operates several programs to comply with various 

legislative mandates and to improve the reliability, availability, and effectiveness of its 

information technology. TIGTA’s enterprise architecture initiative responds to the 

Clinger-Cohen Act’s requirement to align business practices with technology needs. By 

doing so, enterprise architecture will provide for better decision-making ability on 

information technology investment and related resource allocation decisions. 

Identity Management: Although OIT prides itself on delivering a full set of IT support 

and services to TIGTA auditors and investigators, some administrative applications and 

services are better delivered at departmental and governmental levels. To support future 

authentication demands of those applications, TIGTA intends to manage the TIGTA 

aspect of identity management in concert with the IRS, the Department and the Federal 

government. TIGTA currently maintains the production of its own non-Homeland 

Security Presidential Directive-12 (HSPD-12) credentials using HSPD-12 processes and 

procedures and will migrate to departmental HSPD-12 solutions as they become 

available. In accordance with Department guidance, TIGTA HSPD-12 costs are reported 

to IRS for inclusion in a consolidated departmental investment. 

Enterprise Content Management: TIGTA continues to use Microsoft SharePoint as an 

internal content delivery service to our auditors, investigators, and inspection and 

evaluation personnel. There are a number of other applications TIGTA uses that contain 

Enterprise Content Management (ECM) functionality, but the functionality is minor to 

the business processes the applications serve. As a result, these investments are not 

included in TIGTA ECM, but remain with their associated IT infrastructure. As the 

Department ECM initiative presents opportunities, TIGTA will evaluate transition to 

those document, record, content and tracking, and workflow management functions. 

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

classified as non-major investments under Capital Planning and Investment Control 

TIGTA - 22 
guidelines. The Performance and Results Information System (PARIS) supports 

investigative compliance with the Government Performance and Results Act (GPRA). 

The system facilitates GPRA compliance by collecting data needed to measure 

performance of investigative activities, specifically as it pertains to complaint 

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

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

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

investigative activities and to track assets seized during law enforcement actions. 

TIGTA - 23 
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4.2 – Program Assessment Table 

Not applicable to TIGTA. 

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

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