The Treasury Inspector General for Tax Administration

Program Summary by Budget Activity

Dollars in thousands

Appropriation FY 2011 FY 2012 FY 2013 FY 2012 TO FY 2013

 Enacted Enacted Request $ Change % 

Change

Audit $57,306 $57,306 $59,710 $2,404 4.2%

Investigations $94,390 $94,390 $94,124 ($266) (0.3%)

Subtotal, Inspector General for Tax Administration $151,696 $151,696 $153,834 $2,138 1.4%

Offsetting Collections - Reimbursables $1,300 $900 $900 $0 0%

Total Program Operating Level $152,996 $152,596 $154,734 $2,138 1.4%

Direct FTE 835 835 864 29 3.5%

Reimbursable FTE 2 2 2 0 0%

Total FTE 837 837 866 29 3.5%

Summary

The FY 2013 President’s Budget request for 

Treasury Inspector General for Tax 

Administration (TIGTA) will be used to 

continue to provide critical audit, 

investigative, and inspection and evaluation 

services, ensuring the integrity of tax 

administration on behalf of the nation’s 

taxpayers. While there are a number of critical 

areas where TIGTA will provide oversight, 

highlights include: 

 Adapting to the IRS’s continuously 

evolving operations and mitigating 

intensified risks associated with 

modernization and security, procurement 

fraud, addressing the Tax Gap, and human 

capital challenges facing the IRS in 

domestic and international operations in 

order to increase voluntary tax compliance;

 Providing the IRS with the investigative 

coverage and the information necessary to 

mitigate threats against its employees, 

facilities, and systems; 

 Responding to domestic and foreign 

threats and attacks against IRS employees,

property, data infrastructure, and sensitive 

information;

 Improving the integrity of IRS operations 

by detecting and deterring fraud, waste, 

abuse or misconduct by IRS employees; 

 Conducting comprehensive audits, 

inspections, and evaluations that include 

recommendations for monetary benefits, 

addressing erroneous and improper 

payments, and enhancing IRS’s service to

taxpayers; 

 Informing the American people, the 

Congress, and the Secretary of the 

Treasury of problems and progress made to 

resolve them; and

 Overseeing the IRS’s efforts to administer 

tax provisions of the Patient Protection 

and Affordable Care Act, and the Health 

Care and Education Reconciliation Act of 

2010 (ACA).

TIGTA was created by the Congress as a part 

of the Internal Revenue Service Restructuring 

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

audits, investigations, inspections and 

evaluations protect and promote the fair 

administration of the American tax system. 

TIGTA conducts audits that advise the 

American people, the Congress, the Secretary 

of the Treasury, and IRS management of highrisk issues, problems, and deficiencies related 
to the administration of IRS programs and 

operations. TIGTA’s audit recommendations 

improve IRS systems and operations, while 

maintaining fair and equitable treatment of 

taxpayers. TIGTA’s investigations ensure the 

integrity of IRS employees, contractors, and 

other tax professionals; provide for 

infrastructure security; and protect the IRS 

from external attempts to threaten or corrupt 

the administration of the tax laws. TIGTA’s 

Office of Inspections and Evaluations (I&E) 

provides responsive, timely, and cost-effective 

inspections and evaluations of IRS challenge 

areas. TIGTA’s oversight is essential to the 

efficiency and equity of the IRS’s tax 

administration system. TIGTA ensures that 

taxpayers can have confidence that the IRS 

collects more than $2 trillion in tax revenue in 

an effective and efficient manner.

Total resources required to support TIGTA 

activities for FY 2013 are $154,734,000, 

including $153,834,000 from direct 

appropriation and $900,000 from offsetting 

collections and reimbursable programs.

TIGTA FY 2013 Budget Highlights

Dollars in thousands

Inspector General for Tax 

Administration

FTE Amount

FY 2012 Enacted 835 $145,561

Changes to Base:

Maintaining Current Levels 

(MCLs):

- $1,522

Maintaining Current Levels - $1,522

Efficiency Savings: - ($3,828)

Program Reductions & 

Efficiencies

- ($2,894)

Reducing RRA 98 Reporting 

Requirements

- ($840)

Telework & Right-sizing - ($94)

Subtotal FY 2013 Changes to 

Base

- ($2,306)

Total FY 2013 Base 835 $149,390

Program Changes:

Program Decreases: - ($56)

Council of the Inspectors 

General on Integrity & 

Efficiency

- ($56)

Program Increases: 29 $4,500

Oversight of IRS 

Implementation of Affordable 

Care Act 

29 $4,500

Total FY 2013 Request 864 $153,834

FY 2013 Budget Adjustments

Maintaining Current Levels (MCLs) 

Maintaining Current Levels +$1,522,000 / +0 

FTE 

Funds are requested for inflation adjustments 

(1.7 percent) in non-labor expenses such as 

GSA rent adjustments, postage, supplies and 

equipment and health benefits and the increase 

in Federal Employees Retirement System 

participation. Funds are also requested for the 

proposed 2013 pay raise (0.5 percent).

Efficiency Savings

Program Reductions and Efficiencies -

$2,894,000 / +0 FTE

TIGTA has closely scrutinized its budget for 

cost-saving opportunities. Reaching this 

savings target without impacting the quality of 

TIGTA’s programs will require a combination 

of actions. TIGTA examines all vacancies to 

determine the impact of delayed back-filling 

and will strategically indentify positions where 

longer lapses will have the smallest impact on 

mission. TIGTA is also lowering its 

administrative costs by 20 percent compared to 

FY 2010 levels, as outlined in Executive Order 

13589, Promoting Efficient Spending.

Reducing RRA 98 Reporting Requirements -

$840,000 / +0 FTE

Reducing the reporting requirements identified 

in TIGTA’s charter document, RRA 98 will

generate $840,000 in savings. However, these 

reductions would require statutory change and 

are further discussed in the Legislative 

Proposals section of this document.

Telework & Right-sizing -$94,000 / +0 FTE

TIGTA has closely scrutinized its budget for 

cost-saving opportunities and is aggressively 

implementing telework and office right-sizing 

measures to reduce its footprint. 
Program Decrease

Council of the Inspectors General on Integrity 

& Efficiency -$56,000 / +0 FTE 

Decrease in contribution for Council of the 

Inspectors General on Integrity & Efficiency 

(CIGIE) to support coordinated governmentwide activities that identify and review areas 

of weakness and vulnerability in federal 

programs and operations with respect to fraud, 

waste, and abuse.

Program Increase

Oversight of IRS Implementation of Affordable 

Care Act +$4,500,000 / +29 FTE

The IRS components of the new ACA 

legislation are a cornerstone of the 

Administration’s plan to expand coverage for 

millions of Americans. TIGTA is in a unique 

position to ensure that IRS implements the law 

effectively, substantiate the integrity of the 

program, and reassure lawmakers that the 

program functions properly. TIGTA has often 

paved the way for new initiatives that are 

administered through the tax code. TIGTA’s 

work requires close coordination among its 

Audit, Investigations, and Inspections and 

Evaluation functions. Each program office 

brings unique skills and experience, but the 

bureau’s overall success depends greatly upon 

these offices’ close collaboration. The success 

of the new ACA program will depend on the 

government’s ability to assure taxpayers that 

the new changes are properly administered.

Explanation of Budget Activities

Audit ($59,710,000 from direct appropriations 

and $500,000 from reimbursable resources):

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

provide comprehensive coverage and oversight 

of all aspects of the IRS’s daily operations. 

Audits not only focus on the economy and 

efficiency of IRS functions but also ensure that 

taxpayers’ rights are protected and the 

taxpaying public is adequately served. In FY 

2011, audit reports produced potential 

financial benefits of approximately $16.9

billion, and potentially impacted 

approximately 22.7 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. Each fiscal year, OA develops an 

annual audit plan that communicates oversight 

priorities to the Congress, the Department of 

the Treasury, and the IRS. This plan strikes a 

balance between statutory audit coverage and 

high-risk audit work. The statutory coverage 

includes audits mandated by the IRS 

Restructuring and Reform Act of 1998, as well 

as reviews that address computer security and 

financial management. The high-risk 

workload includes issues pertaining to the 

IRS's modernization efforts, its major 

management challenges, its progress in 

achieving its strategic goals, as well as 

Congressional and other stakeholder requests 

for audit coverage.

Investigations ($94,124,000 from direct 

appropriations and $400,000 from 

reimbursable resources) 

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: IRS employee 

misconduct can hinder the IRS’s ability to 

collect revenue for the federal government. 

Fifty percent of TIGTA’s current 
investigations involve alleged employee 

misconduct. In addition to unauthorized 

access (UNAX) investigations, employee 

misconduct investigations include allegations 

of extortion, theft, false statements, and 

financial fraud. TIGTA also administers a 

proactive integrity program to help detect IRS 

employees who might be committing fraud 

and other misconduct. 

Employee and Infrastructure Security: 

Congressional concern regarding the 

magnitude of uncollected revenue has 

prompted the IRS to intensify enforcement 

activities. Heightened enforcement is likely to 

cause a rise in external threats to IRS 

employees and infrastructure. Both TIGTA’s 

proactive and reactive investigations are 

critical to mitigating future risks. TIGTA 

maintains IRS employee and infrastructure 

security by conducting investigations into 

incidents that threaten IRS employees, 

facilities, and infrastructure. TIGTA’s highest 

priority complaints involve threats and assaults 

against IRS employees. TIGTA works 

aggressively and takes swift action to protect 

IRS employees, to include the providing of 

armed escorts. In October 2008, the Inspector 

General Reform Act of 2008 was signed into 

law, which allows TIGTA to provide physical 

security to protect IRS employees against 

external threats. TIGTA also operates a 

Criminal Intelligence Program that develops 

and facilitates pertinent information regarding 

potential threats to IRS employees and 

operations. This program includes 

participation in the Federal Bureau of 

Investigation sponsored Joint Terrorism Task 

Forces nationwide. In addition, TIGTA has a 

System Intrusion and Network Attack 

Response Team to defend against hackers who 

attempt to compromise the data integrity of 

taxpayer information stored in IRS computer 

systems. 

External Attempts to Corrupt Tax 

Administration: TIGTA is statutorily 

mandated to investigate external attempts to 

corrupt tax administration, which includes 

criminal misconduct by non-employees, such 

as, impersonation of IRS employees, 

interference with the administration of internal 

revenue laws, bribery, misuse of Treasury 

names, symbols, etc.; contract fraud; and tax 

practitioner fraud relating to thefts of taxpayer 

remittances and refunds.

Legislative Proposals

TIGTA proposes eliminating certain reviews 

conducted to comply with reporting 

requirements in RRA 98. These statutory

reviews yield little in the way of performance 

measures and are of relatively low value. 

TIGTA would prefer to redirect 

resources applied to these reviews to 

conducting high-risk audits. TIGTA proposes 

legislative changes, which are presented as 

part of the Administration’s overall tax 

agenda. This would eliminate reporting 

requirements in the following areas:

 

 The requirement to report information 

regarding any administrative or civil 

actions related to Fair Tax Collection 

Practices violations in TIGTA’s 

Semiannual Reports. This pertains to 

Internal Revenue Code §7803(d)(1)(G). 

 The requirement to review and certify 

annually that IRS is complying with the 

requirements of 26 U.S.C. §6103(e)(8) 

regarding information on joint filers. 

 The requirement to annually report on the 

IRS’s compliance with Internal Revenue 

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

employees to stop a taxpayer interview 

whenever a taxpayer requests to consult 

with a representative and to obtain their 

immediate supervisor’s approval to contact 

the taxpayer instead of the representative if 

the representative has unreasonably 
delayed the completion of an examination 

or investigation.

 The annual reporting requirement for the 

remaining RRA 98 provisions should be 

revised to a biennial reporting requirement.

TIGTA Performance by Budget Activity

Budget Activity Performance Measure FY 2009 FY 2010 FY 2011 FY 2012 FY 2013

Actual Actual Actual Target Target

Audit Percentage of Audit Products 

Delivered when Promised to 

Stakeholders

81 76 68 65 70

Audit Percentage of Recommendations 

Made that Have Been Implemented 

91 95 93 83 85

Investigations Percentage of Results from 

Investigative Activities

83 86 82 79 80

Key: DISC - Discontinued and B – Baseline

Description of Performance

 For FY 2011, TIGTA issued 139 audit, 

inspection, and evaluation reports, 

identifying approximately $16.9 billion in 

potential financial benefits (i.e., costs 

savings, increased or protected revenue, 

taxpayer rights and entitlements, and 

inefficient use of resources). 

 OA has revised its FY 2013 targets 

upwards as a result of ongoing project 

management training aimed at timely 

delivery of audit products and services as 

well as project management principles.

 For FY 2011, OI closed 82 percent of the 

3,799 final closed investigations which 

generated results, including 1,499 cases of 

employee misconduct referred to the IRS 

for action and 237 cases accepted for 

prosecution.

 For FY 2012 and FY 2013, OI will 

continue to use the performance model to 

measure its effectiveness, guide activities, 

and demonstrate its accomplishments to 

stakeholder.