Tuesday, June 22, 2021

TIGTA Finds IRS Criminal Restitution Procedures Need Improvement

In Audit Report No. 2021-30-033, the Treasury Inspector General for Tax Administration (TIGTA) has called on IRS to improve its procedures related to the collection of assessed criminal restitution in tax-related cases. 

According To The Audit, During Fiscal Years 2016 Through 2020, Defendants Were Ordered To Pay More Than $2.7 Billion In Criminal Restitution To IRS But Paid Only $844 Million
(Or 31%) During That Same Period.

"TIGTA found that in cases for which the IRS had the authority to assess the restitution ordered, a higher percentage of restitution was paid," the audit said.

TIGTA suggested ways to ensure that the restitution ordered is properly assessed. For example, IRS Criminal Investigation (CI) should be certain that it always sends closing documents to the Small Business/Self-Employed (SB/SE) Division for the assessment of restitution. Furthermore, the division must correctly assess interest and penalties on all restitution-based assessments.

"TIGTA also found that a lack of resources within CI and the SB/SE Division contributed to the IRS not being able to adequately monitor defendants' compliance with the conditions of probation or supervised release," the audit said. Bolstering those resources would be a positive step for IRS to take, TIGTA suggested.

In addition, TIGTA found that internal controls could be improved to prevent IRS from issuing erroneous refunds for restitution payments, the audit noted.

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