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Part 1. Organization, Finance and Management

Chapter 55. Wage and Investment

Section 6. W&I Government Accountability Office (GAO) and Treasury Inspector General for Tax Administration (TIGTA) Post-Audit Process

1.55.6  W&I Government Accountability Office (GAO) and Treasury Inspector General for Tax Administration (TIGTA) Post-Audit Process

1.55.6.1  (01-01-2011)
Overview

  1. The Internal Revenue Service (IRS) is subject to annual audits conducted by the GAO and the TIGTA to ensure its programs and activities are operating according to established policies and procedures. The Office of Internal Control (OIC) administers the agency's management control programs. Within the Wage and Investment (W&I) division the Office of the Director, Planning, Research and Analysis, maintains program oversight. Management controls are identified as:

    • A-123 Assessments

    • Remediation Plans

    • Material Weaknesses (MW)

    • Significant Deficiencies (SD)

    • Taxpayer Advocate Most Serious Problems (MSPs)

    • GAO and TIGTA Audit Planned Corrective Actions (PCAs)

1.55.6.2  (01-01-2011)
Management Systems

  1. In accordance with the Audit/Federal Managers Financial Integrity Act/Federal Financial Management Improvement Act, the Office of Internal Control (OIC) tracks the status of all IRS Material Weakness, Significant Deficiencies and audit action plans and financial accomplishments. Information from these plans is used to evaluate the effectiveness and progress of IRS addressing potential weaknesses and implementing suggested recommendations.

  2. The Joint Audit Management Enterprise System (JAMES) is a U.S. Treasury owned web based system used to track and report data from action plans resulting from Treasury Office of Inspector General (OIG), the Treasury Inspector General for Tax Administration (TIGTA), and the Government Accountability Office (GAO) audits. The JAMES also tracks IRS planned corrective actions that address findings from internal management reviews, information on the Federal Managers' Financial Integrity Act (FMFIA), material weaknesses, significant deficiencies, Federal Financial Management Improvement Act (FFMIA) remediation plans, as well as IRS' responses to recommendations made by the National Taxpayer Advocate (NTA) in the Annual Report to Congress.

  3. Program users are issued a logon and password from Treasury to access the system.

  4. Data can be extracted from the JAMES by responsible organization (business division), responsible employee (business function), or control number.

1.55.6.3  (01-01-2011)
Organization and Responsible Employee Codes

  1. planned corrective actions tracked in the JAMES are identified by organizational symbols referred to as the "responsible employee." The lead business division's organizational symbols are extended to the third level; organizational symbols for the responsible function within the business unit are extended to the fourth level. See table 1.1.

    Table 1.1. – W&I Organizational Codes

    Responsible Business Unit Organizational Symbols Responsible Business Function Responsible Employee Organization Symbols
    Customer Account Services SE:W:CAS Joint Operations Center SE:W:CAS:JOC
        Accounts Management SE:W:CAS:AM
      Submission Processing SE:W:CAS:SP
        Electronic Products Service & Support SE:W:CAS:EPSS
    Customer Assistance, Relationships and Education: SE:W:CAR Stakeholder Partnerships, Education and Communications SE:W:CAR:SPEC
        Media and Publications SE:W:CAR:MP
        Field Assistance SE:W:CAR:FA
    Compliance SE:W:CP Program Management SE:W:CP:PM
        Reporting Compliance SE:W:CP:RC
        Filing & Payment Compliance SE:W:CP:F&PC
    Electronic Tax Administration & Refundable Credit SE:W:ETARC Earned Income Tax Credit SE:W:ETARC:EITC
        Electronic Tax Administration SE:W:ETARC:ETA
        Health Care Tax Credit SE:W:ETARC:HCTC
    Office of Taxpayer Correspondence SE:W:OTC Office of Taxpayer Correspondence SE:W:OTC

1.55.6.4  (01-01-2011)
Roles and Responsibilities

  1. The Office of Internal Control (OIC) has program oversight for all Internal Revenue Service (IRS) Government Accountability Office (GAO) and Treasury Inspector General for Tax Administration (TIGTA) audit corrective action plans (findings, recommendations and planned corrective actions). Business unit and field coordinators assist in managing the post-audit inventory.

  2. The OIC Desk Officer is responsible for:

    1. Serving as the liaison between the business division and the Department of Treasury

    2. Coordinating the completion of management controls with each business division

    3. Establishing reports in the JAMES tracking system of IRS' planned corrective actions, reports, material weaknesses, significant deficiencies, and remediation plans

    4. Reviewing and validating all Program Office (PO) User (business unit coordinators) entries into the JAMES that implement or extend planned corrective actions

    5. Preparing reports/charts regarding IRS audit(s); material weaknesses; remediation plan(s); and status and inventory activities

  3. The W&I Business Division Coordinator is responsible for:

    1. Serving as the liaison between Wage and Investment (W&I) and the OIC

    2. Overseeing the completion of W&I GAO/TIGTA corrective action plan inventory

    3. Coordinating status updates with each business unit coordinator

    4. Tracking performance measures

    5. Preparing and providing status reports to W&I management

    6. Serving as the business division JAMES coordinator

    7. Maintaining final audit and post-audit records

    8. Reconciling the business division corrective action plan inventory

  4. The W&I Functional Unit Coordinator is responsible for:

    1. Verifying and tracking post-audit GAO/TIGTA activity

    2. Serving as the business unit JAMES coordinator

    3. Ensuring activities required to implement planned corrective actions are monitored and completed by field personnel

    4. Preparing and providing status reports through the business unit to division headquarters management and the OIC

    5. Updating the status of planned corrective actions

    6. Conducting a review of the action status and inventory

    7. Reconciling the business unit’s inventory of planned corrective actions

    8. Preparing ad hoc reports

    9. Maintaining audit files

1.55.6.5  (01-01-2011)
Tracking Corrective Action Plans

  1. At the close of an audit, a corrective action report is entered into the JAMES. In order for management to comply with the OIC’s reporting requirements, each corrective action within an action plan has an estimated implementation date. The JAMES tracks planned corrective actions for all Treasury Department agencies by the projected implementation date.

  2. A new report number is assigned in the JAMES. This number tracks post-GAO and TIGTA audit activity. For TIGTA, the report numbering sequence includes the fiscal year the report was issued followed by two digits representing the lead stakeholder or lead business division, followed by a three digit sequential number (for example 2005-40-018). For a list of business division codes, see Table 1.2.

  3. For GAO, the numbering sequence usually changes from the job code under which the work was conducted (for example, 450389) to the corrective action plan report. The two middle digits represent the fiscal year in which the report is issued followed by a three digit sequential number (for example GAO-05-062).

    Table 1.2 Business Division Codes

    Business Division Business Division Code
    Headquarters Operations and Exempt Organizations Programs 10 or 11
    Information Systems Programs 20 or 21
    Small Business and Corporate Programs 30 or 31
    Wage and Investment Income Programs 40 or 41

    Note:

    Business division codes ending in "1" associate the report with the American Recovery and Reinvestment Act of 2009 and have a subject matter area category of Recovery Act/ARRA

1.55.6.5.1  (01-01-2011)
Obtaining Access to the Joint Audit Management Enterprise System(JAMES)

  1. Contact the W&I headquarters coordinator for the correct forms and W&I will forward them to the OIC to be processed through the Department of Treasury.

  2. Provide proof of completion for the Information Systems Security Briefing for the last available fiscal year. This course is available in the Enterprise Learning Management System (ELMS). A screen print of the learning history showing completion of the Information Systems Security Briefing can be substitute for the certificate of completion.

  3. Submit the following three forms to the headquarters office via email: (1) Financial Analysis and Reporting System (FARS) Request form, (2) FARS Rules of Behavior Signature Page, and (3) Proof of completion for the Information Systems Security briefing.

  4. Wait one to two days to receive an email from the FARS Help Desk with notification of access and a user id and temporary password. Passwords should be changed every 90 days.

    Note:

    New accounts generally expire after six months with no activity.

1.55.6.5.2  (01-01-2011)
Verifying the JAMES Report

  1. When new actions are entered into the JAMES, the OIC desk officer sends a notification email to the business division. See Exhibit 1.55.6-1 for an example. The verification process involves the division coordinator and the business unit coordinator reviewing the JAMES report (findings, recommendations and corrective action plan(s)) for accuracy and returning a notification of concurrence or non-concurrence. When a business unit concurs with the report and no monetary benefits are identified, an email response can be returned to the OIC.

  2. When a business unit has major discrepancies with the report and/or monetary benefits are identified a memo should be sent to the OIC under executive signature. See Exhibit 1.55.6-2 for an example of a memo. If more than one business unit is identified in a report, a separate notification is forwarded from each business unit.

  3. The OIC desk officer, the W&I division coordinator, and the business unit program coordinator each play significant roles in ensuring planned corrective actions are implemented and reported timely to Congress.

  4. The OIC desk officer is responsible for:

    1. Receiving notification of an audit closing from GAO or TIGTA

    2. Entering the report into the JAMES

    3. Identifying the responsible business division and/or functional program coordinators of the corrective action plan(s)

    4. Noting reports issued without recommendations

    5. Requesting missing corrective action plan(s) if necessary

    6. Notifying the responsible business division and/or functional program coordinators the corrective action report is being tracked in the JAMES

  5. The W&I business division coordinator is responsible for:

    1. Receiving notification of new actions being tracked in the JAMES

    2. Preparing memos of concurrence and/or non-concurrence for each responsible function identified in the JAMES report according to IRM 1.10.1, The Internal Revenue Service Correspondence Manual.

    3. Notifying the business unit functional coordinator of the response due date

    4. Tracking planned corrective actions until completion

  6. The W&I functional coordinator is responsible for:

    1. Confirming finding(s), recommendation(s), and corrective action(s) are stated accurately

    2. Ensuring the due date of the corrective action is the 15th day of the month

    3. Ensuring the correct responsible official is designated

    4. Ensuring potential monetary benefits are correctly stated and a tracking method is in place to report the realized/unrealized benefits when the recommendation is implemented

    5. Obtaining authorized signatures when a substantial disagreement with the findings, recommendations, corrective action(s), or monetary benefits are addressed; when this occurs, the memo should clearly address the discrepancies and monetary benefit types and amounts. The responsible executive within the function should sign the memo.

    6. Ensuring a notification of concurrence or non-concurrence is returned to the OIC on or before the due date; usually within 30 - 45 days after the issuance of the final audit report

    Note:

    For a GAO report, the OIC may request verification of a JAMES report containing only the findings and recommendations. When this occurs, OIC makes an open request for the business unit to submit the missing action plan(s) including planned corrective action(s); established due date(s); and the responsible official(s). This information should be outlined in the 60 day response.

  7. For a TIGTA report, the OIC may request verification of a closed planned corrective action or a closed JAMES report containing only findings with no reported recommendations. The business unit coordinator should still be contacted to concur or not concur with the information in the report. The data tracked in the JAMES is reported to Congress through the Department of Treasury; therefore, the accuracy of the information is very important.

1.55.6.6  (01-01-2011)
Updating a Corrective Action Plan

  1. Activities in a corrective action plan should be updated to record actions taken to delay an action past the original due date; to implement an action, cancelled an action or superseded an action. When activities are delayed, it generally means extreme circumstances have prevented implementation by the scheduled due date. See 1.55.6.6.4 (a) for a complete list of acceptable reasons to extend the due date of a planned corrective action. Due dates of open action plans should be closely monitored to ensure actions are updated timely and actions taken accurately complete the recommended task.

  2. A "place holder" action plan may be established allowing management to address recommendations before the final due date. Actions in a "place holder" action plan are usually presented in complete or partial steps pending outcomes of task forces, studies, or annual reviews. The action plan as well as the place holder plan should clearly identify those actions management intends to take on the agreed-upon recommendation(s).

  3. If a "place holder" action plan is being tracked in the JAMES, management has time to address and implement the plan while considering their options or desired future goals. Management can also reassess the situation and provide a new action plan with a delayed due date that fully addresses the recommendation(s) or provides a "place holder " action plan and delayed due date with steps management will now take to get closer to addressing the recommendation(s).

1.55.6.6.1  (01-01-2011)
Implementing

  1. Most corrective actions are set with an implementation due date of the 15th of the month. Activities implementing the corrective action plan should be completed by the agreed upon due date. The responsible business unit consults with field representatives and management officials to ensure activities are completed timely and accurately. IRM 1.55.6.7. Refer to Table 1.3, The Timely Implementation of Corrective Actions, Table 1.4, Timely Extending a Planned Corrective Action, and Table 1.5 Timely Updating a Planned Corrective Action in the JAMES.

  2. The Form 13872 Planned Corrective Action (PCA) Status Update for TIGTA/GAO/MW/SD/TAS/REM Reports (Rev. 10-2010) is used to document the status change of the corrective action plan.

  3. Executive signature is required on the Form 13872 or the transmittal cover memo. See Exhibit 1.55.6-4. for an example of a Status Update Cover Memo. The contact person(s) listed on Form 13872 section eight (a - c) should be a subject-matter expert able to clarify activities related to the corrective action plan requested by the OIC, TIGTA, GAO, or a management official . The signature of the responsible business unit JAMES coordinator in section nine (a - d) is also required. Documentation that does not reflect the appropriate signatures or contain the required information should be returned for correction.

1.55.6.6.1.1  (01-01-2011)
Implementing With Monetary Benefits

  1. Potential monetary benefits represent either the possible dollar amounts available (cost savings) or the funds gained (additional revenue) when recommendations from an audit are implemented.

  2. There are only three categories of outcome measures associated with planned corrective actions that are tracked in the JAMES, they are Increased Revenue, Questioned Costs, or Funds Put to Better Use. When implementing a corrective action with associated monetary benefits, a statement of benefits realized must be included on Form 13872. The category of the realized monetary benefit should be the same as the potential monetary benefit first identified. The JAMES must be updated to reflect realized monetary benefits (including zero amounts) in order to complete the status update. One of these three formats are used:

    • $1 = indicates IRS disagreed to outcome measure as noted in the audit response. The OIC generally codes when the JAMES report is initiated;

    • $0 = indicates zero monetary benefits were realized; or used to close a PCA associated with a recommendation in which your business division does not own the monetary benefits; or

    • $xxx,xxx,xxx = reports the dollar amount realized as identified in appendix IV; or reports a calculated dollar amount based on actual data.

1.55.6.6.2  (01-01-2011)
Canceling

  1. When the implementation of an agreed-upon corrective action plan first identified in the final audit report is not possible, a request to cancel or close an action(s) can be made to the auditing agency. The request to cancel a corrective action plan should be approved before the due date identified in the JAMES. The reasoning should be clear, and the justification substantiated. See Exhibit 1.55.6-5. for an example of A Request to Cancel a Planned Corrective Action.

  2. To request cancellation of a TIGTA action, prepare a memo for the signature of the business unit director, address the memo to the Inspector General. Copy the OIC. A notification of TIGTA's decision to concur or not concur will be returned. See Exhibit 1.55.6-6 for an example of a Concurrence to Cancel An Action From The Auditing Agency.

  3. To request cancellation of a GAO planned corrective action, address the memo to the Director, Office of Internal Control and that office will route the request to the GAO.

1.55.6.6.3  (01-01-2011)
Superseding

  1. When an audit produces action(s) previously recommended in another audit, and that action is still open, the status of the previous action will be updated from "open" to "superseded." The recommended action will then be tracked through the new report. The repeat audit indicator field in the JAMES should also be updated.

1.55.6.6.4  (01-01-2011)
Extending

  1. When an activity, program or product required to implement a corrective action plan is unattainable by the original due date, implementation of the corrective action is usually postponed. A status update and justification for the extension is required; the status remains open and a historical record of each postponed due date is tracked.

  2. The Department of Treasury has identified the following categories and definitions for extending planned corrective actions:

    • Research/Analyze Data – Delays in implementation in order to perform additional analysis or studies;

    • Publishing – Delays in issuing or publishing guidance or manuals;

    • Concurrence – Delays due to PCAs that are coordinated with other offices before the action could be implemented, closed, or cancelled;

    • Monetary Benefits – Delays to address associated actual monetary benefits;

    • Legal – Delays due to waiting for the resolution of a legal issue;

    • Clearance – Routing delays for comments or reviews (supporting documentation must show that it is in the final stage of the review process);

    • Budget – Delays due to waiting for the approval of funding;

    • Resources – Delays due to the lack of insufficient resources due to budget constraints;

    • Contracting – Delays due to waiting for contract awards or when procurement activities are not complete; and

    • Information Technology (IT) – Unforeseen release delays due to programming or hardware/software issues.

    Note:

    Extending the original implementation date of an action is considered a past due response date by the Department of Treasury. The agency's planned corrective actions categorized as an extended or missed response are reported to Congress by the Department of Treasury. This information is also shared with IRS executives during operational reviews and other executive briefings (e.g. Operations Strategy Board (OSB), and Financial Management Control Executive Steering Committee (FMC ESC)).

1.55.6.7  (01-01-2011)
Timeliness

  1. The activities implementing planned corrective actions should be completed by the agreed-upon date in order to be considered timely implemented . The status of a planned corrective action must also be updated in the JAMES on or before the controlled due date, in order to be considered timely implemented. The OIC requires all status changes (implementations, cancellations, and extensions) to be updated in the JAMES on or before the due date. Tables 1.3, 1.4, and 1.5 show criteria for implementing and extending all corrective actions and updating the JAMES..

    Note:

    Functional coordinators are encouraged to submit the appropriate paperwork to the division coordinator which documents the status change of a planned corrective action(s) by the first of the month. This should allow adequate time to process and validate the status change.

    Table 1.3. – Timely Implementing a Planned Corrective Action

    If ... And ... Then ...
    Activities to implement a planned corrective action plan have a due date in the JAMES of December 15, and are completed by December 15; The cover memo or Form 13872 Planned Corrective Action (PCA) Status Update for GAO/TIGTA Reports is signed on, or before December 15. The action is considered implemented timely.
    Activities to implement a planned corrective action plan have a due date in the JAMES of December 15, and are not completed by December 15;   The action is considered not implemented timely.

    Table 1.4 - Timely Extending a Planned Corrective Action in the JAMES

    If... And... Then...
    Activities to implement a planned corrective action plan have a due date in the JAMES of December 15, and are not completed by December 15; The status change to extend the due date is input into the JAMES on or before December 15; The action is considered extended timely.
    Activities to implement a planned corrective action plan have a due date in the JAMES of December 15, and are not completed by December 15; The status change to extend the due date is input into the JAMES after December 15. The action is considered not extended timely.

    Note:

    The planned corrective action will appear as MISSED on the Treasury scorecard until timely implemented or timely extended.

    Table 1.5. – Timely Updating a Planned Corrective Action in The JAMES

    If ... And ... Then ...
    The planned corrective action due date is December 15; The status change is input into the JAMES on or before December 15th; The action is considered updated timely. The JAMES should reflect the implementation date as December 15.
    The planned corrective action due date is December 15; The status change is input into the JAMES after December 15th, but by the 5th work day (e.g., December 18); The action is considered updated timely in the JAMES.

    Note:

    The OIC rejects the update; and rolls back the status change date to December 15, and considers the PCA updated timely in the JAMES.

    The planned corrective action due date is December 15; The status change is input into the JAMES after December 15th and after the 5th work day (e.g., December 26); The action is not considered updated timely in the JAMES.

    Note:

    All necessary documentation (e.g. signed Form 13872, cover memo, etc.) must be submitted timely to the Office of Internal Control in order to validate actions to the Department of Treasury.

1.55.6.7.1  (01-01-2011)
Final Validation

  1. The OIC desk officer performs a final review and validates the action in the JAMES. The signed Form 13872 is sent electronically and/or faxed to the OIC desk officer and the business division coordinator. If additional information is needed, the OIC desk officer should communicate through the business division coordinator.

1.55.6.8  (01-01-2011)
Reports

  1. A variety of reports are used to manage the GAO/TIGTA planned corrective action inventory and communicate related information about management controls data. Monthly and quarterly reports are prepared to capture the number of actions opened, closed, delayed, and the performance rating of timely responses. See Table 1.6 for a list of frequently used reports.

1.55.6.8.1  (01-01-2011)
JAMES Reports

  1. Standard reports are developed and enhanced by programmers at the Department of Treasury. The Reports Menu in the JAMES list over 29 standard reports. Refer to the JAMES User Manual for a complete list of reports. Standard reports are generated in a HTML or Excel format.

  2. The JAMES also allows the creation of user defined reports. Data from user defined reports are formatted using Microsoft Office applications (e.g. Excel, Word, and PowerPoint). Information from almost every data element can be extracted and/or used in a calculation to obtain requested information. User defined reports can be shared among JAMES program users. Refer to the JAMES User Manual for assistance in creating user defined reports.

    Table 1.6 List of Frequently Used Reports

    REPORT TITLE REPORT DESCRIPTION
    A3 - Open Recommendations without PCAs Used to identify reports entered without the planned corrective actions; pending submission of the final response to OIC.
    A4 - Overdue PCAs Used to identify currently due actions not implemented or the due date is not extended. Ran after the 15th of the month.
    A5 - Statistical Inventory Used to compare percentage of corrective actions W&I owns. Ran at the agency and division level.
    A6 - Audit Summary Used to obtain a full report of findings, recommendations, and planned corrective actions for a specific audit.
    S2 - Scorecard Detail Report Used to report bureau scores of "Met", "Missed" and "Extended" PCAs during a specific time-frame.
    User Defined - Actions Currently Due Used to reconcile the Monthly Tracking Report. Ran monthly and sent to the business unit coordinators.
    User Defined - Actions Entered as of Used to reconcile Monthly Tracking Report and Scorecard. Ran in the middle and end of the month.
    User Defined - Actions Closed as of Used to reconcile the Monthly Tracking Report and Scorecard. Ran at the end of the month.

1.55.6.9  (01-01-2011)
Records Management

  1. In accordance with the Federal Records Act of 1950 and pursuant Title 44, USC 3102, an official record of a GAO or TIGTA audit should be maintained by the division headquarters office.

  2. The IRS established a records management program to ensure the economical and efficient management of its records. The program provides for the application, on a continuing basis, of sound management practices and techniques in the creation, maintenance, retrieval, preservation and disposition of records. See IRM 1.15.1, The Records Management Program, for additional information. All Federal employees are required by law to preserve records containing adequate and proper documentation of the organization, functions, policies, decisions, procedures and essential transactions of the agency. See also IRM 1.10.3.2.3, E-mails as Possible Federal Records, for additional information.

  3. GAO audit records should be retired to the Washington National Records Center (WNRC) two years after closing, and destroyed when 20 years old.

  4. TIGTA Records should be prepared for retirement to the WNRC two years after closing; transferred in five-year segments (i.e., 1993 – 1998); and destroyed after ten years. Refer to the W&I Record Maintenance Guide for GAO and TIGTA Records for information on how to prepare, file, and maintain audit file folders (this is an internal document).

Exhibit 1.55.6-1 
Example of JAMES Report Verification Email

The Office of Internal Control (OIC) is now tracking the following new Treasury Inspector General for Tax Administration (TIGTA) and/or Government Accountability Office (GAO) audit reports in Treasury’s Joint Audit Management Enterprise System (JAMES): 2006-40-XXX (TIGTA DRAFT #200540XXX), “INDIVIDUAL INCOME TAX RETURNS WERE TIMELY PROCESSED IN 2005; HOWEVER, IMPLEMENTATION OF TAX LAW CHANGES COULD BE IMPROVED,” ISSUED DECEMBER 29, 2005

Audit Report - New audit report listed above has been entered into the JAMES. A JAMES A6 audit report abstract is provided as an attachment for these new audit reports. To ensure accuracy of the information reported to Treasury, please review the audit report findings, recommendations, corrective action descriptions and monetary benefits, if applicable. The A6 report can also be reviewed in JAMES by clicking on the “Standard Reports” button, enter the report number and then click “Run - A6 Report.”

Please follow the steps below and respond by the response due date at the top of this email:

  • Notify me immediately (phone/email) if the information contained in the JAMES is incomplete and/or inaccurate

  • If the information contained in the JAMES is correct, the lead coordinator in the functional area responsible to address the corrective action(s) should send me an email concurrence by the response due date

  • A concurrence memorandum, signed by a responsible official at the executive level, is only required if there is a substantial disagreement or if monetary benefits have been identified

Future Updates - IRS requires the responsible employee to notify OIC regarding the status of their corrective actions. For a corrective action to be considered entered in JAMES timely:

  • All implemented corrective actions must be reported in the JAMES within five working days of the due date and, if applicable, must address any potential monetary benefits and documentation is received in OIC during the same time period

  • All extended/rescheduled corrective actions must be reported in the JAMES on or before the scheduled due date and documentation is received in OIC during the same time period

  • Documentation for all corrective actions must be signed by an executive or equivalent and e-mailed or faxed to ((XXX) XXX-XXXX) for validation to ensure timely validation in JAMES, BPO user should ensure the PCA has been updated in JAMES and accurate documentation has been received in OIC

For implemented actions, OIC will backdate the action five working days to reflect the implementation date. For example: to be considered timely, a corrective action due June 15, 2010 must be completed on or before June 15, 2010 and entered into JAMES by June 21, 2010. OIC has the capability to backdate your entry date to June 15, if you meet the above reporting requirements.

Transfers and Changes - If responsibility is being transferred to another official, you must provide OIC with a memorandum identifying the report and reason for transfer. The transfer must have a signed concurrence from the accepting official. All information previously received, including this e-mail should be provided to the accepting official. In order to REJECT a recommendation, CANCEL a corrective action, or CHANGE a corrective action you will need concurrence from the Treasury Inspector General for Tax Administration (TIGTA) or for GAO reports you will need concurrence from the Director, Office of Internal Control.

If you have any questions or need further assistance, please e-mail me or contact me on (XXX) XXX-XXXX.

Exhibit 1.55.6-2 
Non-Concurrence Memorandum

Note:

The letter should be left justified and printed on W&I letterhead in accordance with IRM 1.10.1, Office of the Commissioner of Internal Revenue - The IRS Correspondence Manual

RESPONSE DUE DATE: JULY 22, 2005

MEMORANDUM FOR CHIEF OFFICE OF INTERNAL Control

FROM: John Doe

DIRECTOR, CUSTOMER ACCOUNT SERVICES (CAS) FOR W&I

SUBJECT: Verification of Joint Audit Management Enterprise System (JAMES) Audit Summary Report

The Customer Assistance Relationships and Education (CARE) function has been assigned the responsibility of responding to specific corrective actions found in the attached JAMES Verification Report, GAO-05-247R, "MANAGEMENT REPORT: IMPROVEMENTS NEEDED IN IRS’ INTERNAL CONTROLS " , ISSUED APRIL 27, 2005.

After careful review, we identified significant discrepancies with information pertaining to the findings, recommendations, corrective actions and or monetary benefits (if applicable).

We specifically do not concur with (fill-in)

If additional information is needed, please contact Jane Doe, JAMES Corrective Action Liaison, at (XXX) XXX-XXXX.

Attachment

Exhibit 1.55.6-3 
Concurrence Memorandum Addressing Monetary Benefits

Note:

The letter should be left justified and printed on W&I letterhead in accordance with IRM 1.10.1, Office of the Commissioner of Internal Revenue - The IRS Correspondence Manual

February 20, 2006

MEMORANDUM FOR CHIEF OFFICE OF INTERNAL Control

FROM: Jane Doe

Director, Customer Assistance Relationships and Education (CARE)

SUBJECT: Verification of Joint Audit Management Enterprise System (JAMES) Audit Summary Report

The Customer Assistance Relationships and Education (CARE) function has been assigned the responsibility of responding to specific corrective actions found in the attached JAMES Verification Report, 2004-30-XXX (200230XXX), "TRENDS IN CUSTOMER SERVICE TAXPAYER ASSISTANCE CENTERS SHOW PROCEDURAL & TRAINING CAUSES FOR INACCURATE ANSWERS TO TAX LAW QUESTIONS" , ISSUED NOVEMBER 22, 2003.

After careful review we, agree with the information pertaining to the findings, recommendations, corrective actions as identified in the attached report.

Potential Benefit Amounts: The following estimate(s) of potential benefit amounts in this audit are reasonable. Better Used Funds: $3,100,000 Questioned Costs: $0,000,000 Revenue Funds: $000,000,000

Concur: ____________________________ ______________________

Director, Customer Assistance Relationships and Education(CARE) Date:

If additional information is needed, please contact Jane Doe , JAMES Coordinator, at (XXX) XXX-XXXX.

Attachment

Exhibit 1.55.6-4 
Cover Memorandum

Note:

The letter should be left justified and printed on W&I letterhead in accordance with IRM 1.10.1, Office of the Commissioner of Internal Revenue - The IRS Correspondence Manual

MEMORANDUM FOR DIRECTOR, OFFICE OF INTERNAL CONTROL

FROM: John Doe

Director Customer Account Services Wage and Investment Division

SUBJECT: Update to the Joint Audit Management Enterprise System (JAMES)

Attached and summarized below are JAMES updates for planned corrective actions that fall within Wage and Investment Division’s Customer Account Services.

Report Number Corrective Action Status
2000-30-XXX 1-1-1 Completed
2001-30-XXX 4-2-2 Completed
2001-40-XXX 1-1-1 Completed
2002-30-XXX 1-2-2 Completed
2003-40-XXX 2-1-1 Completed
2003-30-XXX 1-3-1, 1-5-1 Delayed to 3-15-07
2003-30-XXX 1-6-1, 1-8-1 Completed
2003-40-XXX 1-1-1 Completed
GAO-03-XXX 1-14-1 Delayed to 1-15-07
GGD-99-XX 1-5-1 Superseded
GAO-03-XXXR 3-3-1 Completed

If you have questions or need additional information, please contact Jane Doe at (XXX) XXX-XXXX.

Attachments (12)

Exhibit 1.55.6-5 
Request to Cancel a Corrective Action

Note:

The letter should be left justified and printed on W&I letterhead in accordance with IRM 1.10.1, Office of the Commissioner of Internal Revenue - The IRS Correspondence Manual

MEMORANDUM FOR TREASURY INSPECTOR GENERAL FOR TAX ADMINISTRATION

FROM: John Doe

Commissioner, Wage and Investment Division

SUBJECT: Request to Close Corrective Action 1-1-3 from Internal Audit Report #71399, "Quality of Information Document Processing"

I am writing to request your concurrence to close corrective action 1-1-3 from the subject Internal Audit report dated March 3, 1997. Your recommendation and our justification for closing these actions follow.

Recommendation #1: Service reports, such as Martinsburg Computing Center (MCC) Report 405-02-12, should be reviewed to determine whether large variances between process years exist in the volume and dollars of information documents. These analyses should be completed prior to the release of information to the states and other third parties and should include multiple year comparisons.

Corrective Action #1-1-3: IRS management is considering creating an automated process that highlights dollar and volume anomalies by comparing the current tax year report data with the prior year report data. Until we automate this task, management will continue to perform cursory reviews, or reviews on specific income types. Customer Service and Submission Processing will coordinate writing a manual and developing automated review process.

Background: The Auditors found that service control systems allowed problems with Service Center Recognition/Image Processing System (SCRIPS) data to go undetected. Because of the SCRIPS scanning problems, we posted incorrect information to the Information Returns Master File (IRMF). After we identified the processing errors, we took corrective actions to minimize the effects of the erroneous data on compliance programs and external users of the data. We later analyzed the July 1996 IRS report (Martinsburg Computing Center Report 405-02-12), which showed that SCRIPS scanning errors continue.

The finding was the result of SCRIPS Optical Character Recognition (OCR) "misreading" dollar amount fields, human errors, and filer errors. The SCRIPS was "looking" for dollar amounts so small (font size) that it would see a comma as the number 9 and periods as the number 0. The SCRIPS would also translate dollars signs, negative signs, and other non-numeric characters into numbers resulting in, large errors, sometimes in the trillions of dollars. The SCRIPS transcribers also made keypunch errors or approved erroneous dollar amounts by answering "OK" to visual verifications of dollar amounts. Filers errors and our use of "summary forms" that totaled all the dollar amounts reported in a submission, also contributed to SCRIPS errors. SCRIPS transcribers processed summary forms as just another Form 1099.

To address Recommendation 1, we submitted a Request for Information Services (RIS) to create a report that highlights dollar and volume anomalies by comparing the current tax year report data with the prior year report data. We have attempted to have Information Systems (IS) implement the RIS numerous times since the completion of the audit, the last time in May 2002, but IS has repeatedly rejected the RIS.

Justification to Close This Action:

The IRS has taken actions to refine the OCR processes, modify transcription instructions, and alert filers of summary documents. These actions have reduced erroneous SCRIPS so much that the report, which we planned to create through the RIS, would be of no material value. The corrective actions we are taking and have taken to reduce erroneous SCRIPS errors, and the cursory reviews IS conducted, are the same corrective actions required if the proposed comparison report showed dollar or volume anomalies.

For a detailed description of IRS’ actions to reduce erroneous SCRIPS erroneous, see the attached.

I hope this information justifies our conclusion that implementing this corrective action is not appropriate. If you agree that we should close this corrective action, please sign below. If you have any questions, please call Jane Doe, Senior Tax Analyst at (XXX) XXX-XXXX.

Attachment

Concurrence:__________________________________________________

John Doe, Deputy Inspector General Date

Exhibit 1.55.6-6 
Concurrence to Cancel a Corrective Action

Treasury Inspector General for Tax Administration

DEPARTMENT OF THE TREASURY

WASHINGTON, D.C. 20220

MEMORANDUM FOR COMMISSIONER, WAGE AND INVESTMENT DIVISION

FROM: John Doe

Deputy Inspector General

SUBJECT: Request to Cancel Corrective Action 1-1-3 from Audit Report #73455, Quality of Information Document Processing

You have requested the Treasury Inspector General for Tax Administration’s concurrence in canceling corrective action 1-1-3 relating to the subject report. As requested, I have indicated my concurrence by my signature on the attachment.

If you have any questions, please contact me, or your staff may contact Jane Doe, Director, Office of Management and Policy at (XXX) XXX-XXXX.

Attachment

cc: Office of Internal Control

Attn: Jane Doe


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