PDF - Department of the Treasury

Taxpayer Protection
and Rights
The IRS recognizes the growing challenge
of identity theft and its effect on tax
administration. Two primary types of
identity theft that relate to tax are: (1) an
individual who files a return using another
person’s name and Social Security Number
(SSN) to steal a tax refund; and, (2) an
individual using another person’s name,
SSN, or both to obtain employment.
The IRS has no corporate strategy to
address identity theft issues. It does not
have a consistent process to educate and
assist taxpayers, and does not always take
additional actions to deal with the
individuals who have used another’s name
and/or SSN to file fraudulent tax returns or
obtain employment. In addition, the IRS
does not have comprehensive or centralized
data on identity theft to determine its effect
on tax administration. IRS management
agreed with the recommendations presented
in the report and has developed an
Enterprise Identity Theft Strategy.
Report Reference No. 2005-40-106
Some concerns have been expressed by tax
professionals and the National Taxpayer
Advocate that new policies, programs, and
structures initiated by the IRS since
enactment of RRA 98 may be
compromising the independence of the
Office of Appeals. TIGTA found that the
overall independence provided by the
Office of Appeals’ structure and processes
appears to comply with the intent of
RRA 98.
Survey results from taxpayers indicate that
there has been an improvement in the
overall perception of the Office of Appeals’
independence. In addition, representatives
from the American Bar Association, the
American Institute of Certified Public
Accountants, the National Association of
Enrolled Agents, and the National Society
of Accountants along with former IRS
officials advised TIGTA that they believe
the independence is generally very high.
However, these tax professionals have
concerns with independence of specific
programs and initiatives – primarily to
those involving high-dollar cases in which
there appears to be coordination between
the Office of Appeals and IRS compliance
functions. TIGTA reviewed the programs
and areas of concern. While there were
some specific areas where clarification of
procedures and guidance is needed, the
actions taken to streamline processes and
the coordination to ensure that taxpayers
receive consistent treatment appear to be
necessary for the Office of Appeals to
effectively perform its function.
TIGTA recommended that the IRS clarify
certain procedures related to coordinated
issues. In addition, TIGTA recommended
that IRS officials, with the exception of the
IRS Commissioner and the Chief, Office of
Appeals, avoid discussing the impact of
specific court cases on Appeals Settlement
Guidelines and revise policies and
procedures to promote consistency. IRS
management agreed with the
recommendations and will take corrective
action.
Report Reference No. 2005-10-141
April 1, 2005 to September 30, 2005 19