The Internal Structure of TIGTA

Most of the time the Treasury Inspector General for Tax Administration (TIGTA) is described as a government watchdog; an entity charged with keeping tabs on the Internal Revenue Service.  The Honorable J. Russell George, the guy in charge at TIGTA, describes TIGTA’s role as follows:

[W]e provide the American taxpayer with assurance that the approximately 95,000 IRS employees who collected over $2.9 trillion in tax revenue, processed over 241 million tax returns, and issued $364 billion in tax refunds during FY 2013, do so in an effective and efficient manner while minimizing the risks of waste, fraud, or abuse.

~ J. Russell George’s testimony before the Senate Appropriations Committee on April 30, 2014

Besides providing a neat little collection of IRS statistics, this description very succinctly describes TIGTA’s role in U.S. tax administration.  But the organizational structure of this “watchdog” is more complex than would appear in this description.  There are three offices within TIGTA, each with different, but overlapping, responsibilities.

TIGTA Office of Audit (OA)

OA recommends improvements to IRS systems and operations, with an emphasis on detection and prevention of waste, abuse, and fraud.  OA is also charged with ensuring that the IRS strikes a balance between aggressive tax collection on the one hand, and the fair & equitable treatment of taxpayers on the other.

TIGTA Office of Investigations (OI)

OI has two primary responsibilities.  One is to investigate allegations of IRS employee misconduct (including extortion, theft, taxpayer abuses, false statements, financial fraud, and identity theft), which poses a significant threat to the idea of voluntary compliance and trust in the US government.  The other is to investigate and (in cooperation with the Department of Justice) put a stop to harassment and threats levied against IRS personnel by disgruntled taxpayers and tax protestors.

TIGTA Office of Inspections and Evaluations (I&E)

There is definitely some overlap in the functions of I&E  compared to the functions of the two primary offices (Audits & Investigations) described above.  However, I&E can be seen as a “lower-level”  investigative arm of TIGTA that provides in-depth reviews and assessments so both TIGTA and the IRS have a better idea of how specific programs and functions are progressing.

You may not think TIGTA has much to do with you as an individual taxpayer, but I’m not sure how much the IRS would care about customer service and average hold times if TIGTA wasn’t monitoring and auditing that and a thousand other daily functions.

IRS Funding: Seems Adequate to Me

Some say the biggest problem at the IRS is that they are not allocated enough money to be able to administer the tax laws fairly and competently.  Even Nina Olson, the National Taxpayer Advocate, has bought into this theory:

Today, the IRS is an institution in crisis. In my view, however, the real crisis is not the one generating headlines. The real crisis facing the IRS — and therefore taxpayers — is a radically transformed mission coupled with inadequate funding to accomplish that mission. As a consequence of this crisis, the IRS gives limited consideration to taxpayer rights or fundamental tax administration principles as it struggles to get its job done.

~ Nina Olson, in her mid-year report to Congress

What’s ironic about this quote is it was released today along side juicy headlines about IRS employees using government credit cards to make some highly questionable purchases of alcohol, expensive meals, party supplies, and even porn.  Of course many of these purchases were made on cards that were reported stolen.  I’m sure that’s true because there is no way any IRS employee would abuse his card privileges.

I don’t know Nina, I usually agree with your opinions, but it seems to me that the crisis is fairly well summarized by the headlines.  Why downplay the high-profile mistakes that are so very telling of what’s going on at the IRS?  And how is it that the IRS’ mission has been “radically transformed”?  Regardless of any official mission statements, their mission has always been, and always will be, to collect as much revenue as possible without too much regard to fairness, tax relief, and taxpayer rights.

So if the “real crisis” is inadequate funding, then why should we turn a blind eye to outrageous spending abuse?  There is no way in this world we should increase funding to the IRS until they clean house.

IRS Debt Collection Practices Deemed "Fair"

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The latest audit conducted by the Treasury Inspector General for Tax Administration (aka TIGTA, aka “Big Brother”) looked for instances of harassment, oppression, and abuse in the tax debt collection practices of the IRS.  But I don’t think they looked hard enough.

According to the audit report:

 [T]here were no cases involving Fair Tax Collection Practices (FTCP) violations for which an IRS employee received administrative disciplinary action in FY 2011, and no taxpayers received civil damages for an FTCP violation.

Ok fine, but what does that really say about IRS debt collection practices?  The conclusion that was drawn in the report (and the same conclusion that has been drawn year after year in this annual report) is that “taxpayers have reasonable assurance that communications with the IRS in connection with the collection of unpaid taxes generally did not violate the FTCP statute.”

So, let me get this straight.  Because no IRS employee was disciplined for harrassing taxpayers and because no taxpayers prevailed in a civil suit under the FTCP statute, then we are to assume that everything is on the up and up?  This is pure ridiculousness!  From my point of view (my point of view being a tax attorney who has clients come to me on a regular basis complaining about how they were treated by IRS personnel), all this statement means is that IRS management is either too conservative with their discipline, or they are actually going out of their way to protect employees who cross the line.  And as for the finding that no taxpayers have received civil damages for a FTCP violation in 2011, well . . . geez, could it be that it is practically impossible to prevail in a civil suit when the claim is that an IRS employee abused his authority and chewed you out?

This report is a slap in the face for those who have been treated unfairly by IRS employees.