Is TIGTA's Audit Process Missing a Step?

Posted by Wetenkamp on
image via katilda.com

The Treasury Inspector General for Tax Administration (TIGTA) is the government watchdog agency that makes sure the IRS does its job.  At least that’s what they’re supposed to do.  From where I sit, it looks like they do a great job identifying IRS problems, and describing the problems in audit reports, and even in recommending solutions to the problems.  But, what seems to be lacking is follow-up.

Case in point: according to the most recent TIGTA audit report, the IRS let about 1.5 million fraudulent refund returns slip by them in 2011 — a potential loss of $5.2 billion.  As usual, at the conclusion of the report, TIGTA made its recommendations to reduce these illegal tax relief schemes — seven of them this time.  But then what?  This is not a new audit topic, and I wouldn’t be surprised to find out that TIGTA has made similar (if not the same) recommendations before.  When does TIGTA follow up on this to see if the IRS made the recommended changes?

This is TIGTA’s detailed audit process (as shown on their website):

  1. Engagement letter
  2. Opening conference
  3. Fieldwork
  4. Discussion draft report
  5. Exit conference
  6. Formal draft report
  7. Agency response
  8. Final report

Shouldn’t there be a 9th item on this list for “follow-up”?

 

Olympic Medal Tax Rates

Posted by Wetenkamp on
image via en.wikipedia.org

US citizens are generally required to pay taxes on their worldwide income, regardless of where they are living.  If you don’t believe me, you can read all about it in IRS Publication 54 “Tax Guide for U.S. Citizens and Resident Aliens Living Abroad.”  So the olympic medals and prize money obtained by American athletes — you guessed it: taxable.

The people at Americans for Tax Reform calculated the tax on each prize level:

  • Bronze – tax bill is $3,502 on prize of $10,000
  • Silver – tax bill is $5,385 on prize of $15,000
  • Gold – tax bill is $8,986 on prize of $25,000

And that’s just the prize money tax rate associated with the medal.  If our Olympians really want to do things correctly, they will have to pay tax on the medal itself too.

Some think that our “amateur” athletes should get tax relief similar to that which we extend to our military personnel.  They do represent the United States, but I’m not sure the public policy reasons are quite the same.