Tax Compliance
Some Hurricanes Katrina and Rita Disaster Assistance Recipients Have Unpaid Federal Taxes Gao ID: GAO-08-101R November 16, 2007Since February 2004, we have issued a series of reports detailing how some organizations and individuals, including defense, civilian agency, and General Services Administration (GSA) contractors; tax-exempt (not-for-profit) organizations; and Medicare physicians, abused the federal tax system at the same time they were doing business with or receiving benefits from the federal government. While we performed this work it came to our attention that some organizations and individuals that were recipients of federal grants and other direct assistance were also abusing the tax system. Thus, Congress asked us to perform additional work and report specifically on organizations and individuals that abuse the federal tax system at the same time they receive federal grants or other similar types of federal assistance, known as direct payments for specified use (direct assistance) programs. Based on Congressional request, we completed a forensic audit and related investigations of unpaid federal taxes owed by recipients of the Federal Emergency Management Agency's (FEMA) Individuals and Households Program (IHP) following hurricanes Katrina and Rita. IHP is a federal direct assistance program authorized by the Robert T. Stafford Disaster Relief and Emergency Assistance Act (Stafford Act), as amended by the Disaster Mitigation Act of 2000. We conducted our audit of IHP concurrently with our broader audit of federal grant and direct assistance recipients that have unpaid federal taxes, which Congress also requested. We will be reporting the results of that work separately. The specific objectives of our work were to (1) determine, to the extent practical, the estimated magnitude of federal taxes owed by individuals receiving IHP disaster assistance benefit payments following hurricanes Katrina and Rita and (2) provide illustrative examples of abusive or criminal activity related to the federal tax system by IHP recipients with unpaid federal taxes.
While about 95 percent of all IHP recipients of disaster relief assistance following hurricanes Katrina and Rita paid their federal taxes, tens of thousands owed federal taxes at the time of the disaster. We identified about 80,000 of the 1.5 million individuals (about 5 percent) who received disaster assistance benefits for hurricanes Katrina and Rita and owed over $700 million combined in unpaid federal taxes prior to those hurricanes. However, our estimates of the taxes owed by these recipients is understated in that we did not include amounts owed by individuals who have not filed tax returns or who have failed to report the full amount of taxes due (referred to as nonfilers and underreporters) and for whom IRS has not determined that specific tax debts are owed. FEMA officials stated that they do not screen disaster applicants for tax debts. FEMA officials stated that there is no law or regulation that requires FEMA to screen IHP applicants prior to providing disaster assistance. The five IHP recipients with which we chose to illustrate abusive and criminal activity related to the federal tax system had tax debts ranging from about $400,000 to over $2 million. Our investigation found that a number of these individuals had a history of failing to file tax returns for several years prior to the hurricane disasters. We also found instances in which IHP recipients attempted to transfer property to avoid IRS seizure. For example, one IHP recipient in the oil and gas industry forged a third party's signature to illegally transfer land. Another IHP recipient, a lawyer, transferred a large quantity of stock to a family member while IRS was taking collection actions against the lawyer. We received written comments on a draft of this report from the Department of Homeland Security (DHS). In its written comments, DHS stated that FEMA's administration of disaster assistance programs to victims of hurricanes Katrina and Rita with tax liabilities was consistent with federal law and policy. As recognized in our draft report, DHS is not required to screen applicants for tax debts. We have reprinted DHS's written comments in their entirety in the enclosure. In addition, IRS and DHS provided technical comments on the draft report, which we incorporated as appropriate.
GAO-08-101R, Tax Compliance: Some Hurricanes Katrina and Rita Disaster Assistance Recipients Have Unpaid Federal Taxes
This is the accessible text file for GAO report number GAO-08-101R
entitled 'Tax Compliance: Some Hurricanes Katrina and Rita Disaster
Assistance Recipients Have Unpaid Federal Taxes' which was released on
December 17, 2007.
This text file was formatted by the U.S. Government Accountability
Office (GAO) to be accessible to users with visual impairments, as part
of a longer term project to improve GAO products' accessibility. Every
attempt has been made to maintain the structural and data integrity of
the original printed product. Accessibility features, such as text
descriptions of tables, consecutively numbered footnotes placed at the
end of the file, and the text of agency comment letters, are provided
but may not exactly duplicate the presentation or format of the printed
version. The portable document format (PDF) file is an exact electronic
replica of the printed version. We welcome your feedback. Please E-mail
your comments regarding the contents or accessibility features of this
document to Webmaster@gao.gov.
This is a work of the U.S. government and is not subject to copyright
protection in the United States. It may be reproduced and distributed
in its entirety without further permission from GAO. Because this work
may contain copyrighted images or other material, permission from the
copyright holder may be necessary if you wish to reproduce this
material separately.
United States Government Accountability Office:
Washington, DC 20548:
GAO-08-101R:
November 16, 2007:
The Honorable Joseph I. Lieberman:
Chairman:
The Honorable Susan M. Collins:
Ranking Member:
Committee on Homeland Security and Governmental Affairs:
United States Senate:
The Honorable Carl Levin:
Chairman:
The Honorable Norm Coleman:
Ranking Member:
Permanent Subcommittee on Investigations:
Committee on Homeland
Security and Governmental Affairs:
United States Senate:
Subject: Tax Compliance: Some Hurricanes Katrina and Rita Disaster
Assistance Recipients Have Unpaid Federal Taxes:
Since February 2004, we have issued a series of reports detailing how
some organizations and individuals, including defense, civilian agency,
and General Services Administration (GSA) contractors; tax-exempt (not-
for-profit) organizations; and Medicare physicians, abused the federal
tax system at the same time they were doing business with or receiving
benefits from the federal government.[Footnote 1] While we performed
this work it came to our attention that some organizations and
individuals that were recipients of federal grants and other direct
assistance were also abusing the tax system. Thus, you asked us to
perform additional work and report specifically on organizations and
individuals that abuse the federal tax system at the same time they
receive federal grants or other similar types of federal assistance,
known as direct payments for specified use (direct assistance)
programs.[Footnote 2]
Based on your request, we completed a forensic audit and related
investigations of unpaid federal taxes owed by recipients of the
Federal Emergency Management Agency's (FEMA) Individuals and Households
Program (IHP) following hurricanes Katrina and Rita.[Footnote 3] IHP is
a federal direct assistance program authorized by the Robert T.
Stafford Disaster Relief and Emergency Assistance Act (Stafford Act),
as amended by the Disaster Mitigation Act of 2000. We conducted our
audit of IHP concurrently with our broader audit of federal grant and
direct assistance recipients that have unpaid federal taxes, which you
also requested. We will be reporting the results of that work
separately.
The specific objectives of our work were to (1) determine, to the
extent practical, the estimated magnitude of federal taxes owed by
individuals receiving IHP disaster assistance benefit payments
following hurricanes Katrina and Rita and (2) provide illustrative
examples of abusive or criminal activity related to the federal tax
system by IHP recipients with unpaid federal taxes.
To estimate the magnitude of unpaid federal taxes owed by IHP disaster
relief assistance recipients following hurricanes Katrina and Rita, we
matched the Internal Revenue Service's (IRS) tax debts as of September
30, 2005, with IHP disaster assistance benefit payments made for
hurricanes Katrina and Rita maintained in FEMA's National Emergency
Management Information System. We used only taxes assessed for tax
periods prior to 2005 to ensure that our analysis included only taxes
owed prior to when the hurricanes struck. To be conservative in our
estimate, we further excluded from our analysis tax debts that had not
been agreed to by the tax debtor or affirmed by the court and tax debts
of $100 or less. To provide examples of the extent and nature of abuse
or potential criminal activity related to the federal tax system by IHP
recipients with unpaid federal taxes, we performed more in-depth
investigative work on a nonrepresentative selection of five IHP
recipients. These cases were selected based on amounts owed in federal
taxes from the top 10 percent of the IHP recipient population. For
these five cases, we reviewed copies of automated tax transcripts and
other tax records (for example, revenue officers' notes) and performed
additional investigative research on available criminal, financial, and
public records.
We conducted our work from January 2007 through August 2007. We
performed our audit in accordance with U.S. generally accepted
government auditing standards. The investigative portion of our work
was completed in accordance with investigative standards established by
the President's Council on Integrity and Efficiency.
Results in Brief:
While about 95 percent of all IHP recipients of disaster relief
assistance following hurricanes Katrina and Rita paid their federal
taxes, tens of thousands owed federal taxes at the time of the
disaster. We identified about 80,000 of the 1.5 million individuals
(about 5 percent) who received disaster assistance benefits for
hurricanes Katrina and Rita and owed over $700 million combined in
unpaid federal taxes prior to those hurricanes. However, our estimates
of the taxes owed by these recipients is understated in that we did not
include amounts owed by individuals who have not filed tax returns or
who have failed to report the full amount of taxes due (referred to as
nonfilers and underreporters) and for whom IRS has not determined that
specific tax debts are owed. FEMA officials stated that they do not
screen disaster applicants for tax debts. FEMA officials stated that
there is no law or regulation that requires FEMA to screen IHP
applicants prior to providing disaster assistance.
The five IHP recipients with which we chose to illustrate abusive and
criminal activity related to the federal tax system had tax debts
ranging from about $400,000 to over $2 million. Our investigation found
that a number of these individuals had a history of failing to file tax
returns for several years prior to the hurricane disasters. We also
found instances in which IHP recipients attempted to transfer property
to avoid IRS seizure. For example, one IHP recipient in the oil and gas
industry forged a third party's signature to illegally transfer land.
Another IHP recipient, a lawyer, transferred a large quantity of stock
to a family member while IRS was taking collection actions against the
lawyer.
We received written comments on a draft of this report from the
Department of Homeland Security (DHS). In its written comments, DHS
stated that FEMA's administration of disaster assistance programs to
victims of hurricanes Katrina and Rita with tax liabilities was
consistent with federal law and policy. As recognized in our draft
report, DHS is not required to screen applicants for tax debts (see the
Agency Comments and Our Evaluation section of this report). We have
reprinted DHS's written comments in their entirety in the enclosure. In
addition, IRS and DHS provided technical comments on the draft report,
which we incorporated as appropriate.
Background:
Making landfall in late August 2005, Hurricane Katrina devastated much
of the Gulf Coast; the storm surge caused major or catastrophic damage
along the coastlines of Alabama, Mississippi, and Louisiana. In
September 2005, Hurricane Rita caused further devastation, making
landfall on the Louisiana and Texas Gulf Coasts. These two hurricanes
left more than 1,500 dead, affected 90,000 square miles, caused more
than $80 billion in damage, and forced mass evacuations. An estimated
600,000 households were displaced, and FEMA has reported that over
50,000 households remained in temporary housing 2 years later.
The Stafford Act grants the principal authority for the President to
provide assistance in mitigating, responding to, and preparing for
disasters and emergencies such as earthquakes, hurricanes, floods,
tornadoes, and terrorist acts. The mission of FEMA, within DHS, which
administers the Stafford Act, is to reduce loss of life and property
and protect the nation from all types of hazards through a
comprehensive, risk-based emergency management program. Section 408 of
the Stafford Act, 42 U.S.C. § 5174, is the general authority for the
President to provide assistance to individuals and households. This
section encompasses housing assistance as well as "other needs"
assistance, which includes medical, dental, funeral, personal property,
transportation, and other financial assistance for certain needs
arising from a major disaster. These two types of assistance are
administered by FEMA under IHP. IHP provides housing and "other needs"
assistance in the forms of direct assistance (the provision of
temporary housing units) and financial assistance (grant funding for
temporary housing and other disaster-related needs) to eligible
disaster victims.
Our previous forensic audits and related investigations found
significant control weaknesses in FEMA's disaster relief program. In
several hearings, we testified that control weaknesses in FEMA's IHP
have left the government vulnerable to significant fraud, waste, and
abuse. In February 2006, we testified that specific control weaknesses
in IHP resulted in improper expedited assistance payments and
nonexistent controls left the government vulnerable to substantial
fraud and abuse related to IHP.[Footnote 4] Several months later, in
June 2006, we testified on additional work performed whereby we
projected that the weak or nonexistent controls resulted in an
estimated $600 million to $1.4 billion dollars in potentially
fraudulent and improper IHP payments or about 16 percent of the first
$6 billion of IHP disbursements for hurricanes Katrina and
Rita.[Footnote 5] In December 2006, we again testified that FEMA made
nearly $17 million in potentially improper rental assistance payments,
fraudulent rental assistance payments, or both to individuals after
they had moved into FEMA trailers.[Footnote 6] Based on this work, we
referred to the Katrina Fraud Task Force thousands of cases of
individuals we believe received fraudulent and improper payments of IHP
benefits.
Magnitude of Unpaid Taxes Owed by IHP Recipients:
While about 95 percent of all IHP recipients of hurricanes Katrina and
Rita assistance did not have unpaid federal taxes, we identified tens
of thousands of IHP recipients with unpaid federal taxes. We identified
about 80,000 of the nearly 1.5 million registrants (about 5 percent)
who received IHP disaster assistance payments for hurricanes Katrina
and Rita and had over $700 million in unpaid federal taxes at about the
time the hurricanes struck. Most of the taxes owed by these IHP
recipients were individual federal income taxes. In addition, as
reflected in figure 1, about two-thirds of unpaid federal taxes were
for tax periods through calendar year 2000.[Footnote 7]
Figure 1: IHP Recipients with Unpaid Federal Taxes (by Tax Year) as of
September 30, 2005:
[See PDF for image]
This figure is a pie-chart depicting IHP recipients with unpaid federal
taxes (by tax year) as of September 30, 2005. The following data is
depicted:
Prior to 1996: 29% ($218 million);
1996 to 2000: 38% ($284 million);
2001 to 2004: 33% ($244 million).
Source: GAO analysis of FEMA and IRS data as of September 30, 2005.
[End of figure]
Although $700 million in unpaid taxes owed by IHP participants as of
September 30, 2005, is a substantial amount, this amount understates
the full extent of unpaid federal taxes for these individuals. To avoid
overestimating the amount owed, we limited our scope to federal tax
debts that were affirmed by either the individual or a tax court for
tax periods prior to 2005. We did not include any debts incurred during
the most current tax year to avoid including any tax debts that were
assessed subsequent to the hurricanes. We also purposely excluded
recently assessed tax debts that appear as unpaid taxes because they
may involve matters that will be routinely resolved between the
taxpayer and IRS. We further excluded tax debts of less than $100
because they are insignificant for the purpose of determining the
extent of taxes owed.
Our estimate is also likely to be understated because the IRS tax
database we used to derive our estimate reflects only the amount of
unpaid taxes either reported by an individual or organization on a tax
return or assessed by IRS through its various enforcement programs. The
IRS database does not reflect amounts owed by organizations and
individuals that have not filed tax returns and for which IRS has not
assessed tax amounts due. For example, during our audit, we identified
instances from our case studies in which individuals failed to file tax
returns for a particular tax period and IRS had not assessed taxes for
these tax periods. Consequently, while these individuals may have
additional unpaid taxes, they were listed in IRS records as having no
unpaid taxes for that period. Further, our analysis did not attempt to
account for individuals who purposely underreported income and were not
specifically identified by IRS as owing the additional taxes. According
to IRS, underreporting of income accounted for more than 80 percent of
the estimated $345 billion annual gross tax gap.[Footnote 8]
Federal law and regulations do not prohibit IHP applicants that owe tax
debts from receiving disaster assistance from the federal government.
In fact, Office of Management and Budget (OMB) policy is to allow
disaster loans to individuals with federal tax debts.[Footnote 9]
Consistent with this policy, FEMA officials stated that they do not
screen disaster applicants for tax debts. FEMA officials stated that
there is no law or regulation that requires FEMA to screen IHP
applicants prior to providing disaster assistance.
Examples of IHP Recipients Involved in Abusive and Criminal Activity
Related to Federal Tax System:
The five IHP recipients with which we chose to illustrate abusive and
criminal activity related to the federal tax system had tax debts
ranging from about $400,000 to over $2 million. A number of these
individuals had a history of failing to file tax returns for several
years. Two IHP recipients also attempted to transfer property to avoid
IRS seizure. Table 1 highlights the five cases of IHP recipients we
investigated with unpaid taxes.
Table 1: Descriptions of Five IHP Recipients with Unpaid Federal Taxes
Investigated for Possible Abusive and Criminal Activity:
Case: 1;
Nature of work: Doctor;
Unpaid tax amount[A]: $2 million;
Comments:
* FEMA recipient received several thousand dollars in disaster
assistance;
* FEMA recipient has a history of repeated failures to pay income tax
and filing late returns, spanning back to the 1980s;
* FEMA recipient's return in the early 2000s reported income of several
hundred thousand dollars, but recipient did not report income in recent
years;
* Recipient had unreported gambling winnings totaling over a quarter of
a million dollars at the same time that the recipient owed federal
taxes;
* FEMA recipient was charged with illegally dispensing a controlled
substance.
Case: 2;
Nature of work: Doctor;
Unpaid tax amount[A]: $2 million;
Comments:
* FEMA recipient received IHP assistance of several thousand dollars;
* FEMA recipient did not file required tax returns for several years;
* FEMA recipient said the reason for not filing returns was that the
recipient was overwhelmed with the filing process and decided to wait
for IRS to seek the returns;
* IRS filed several tax liens against recipient's property.
Case: 3;
Nature of work: Contractor;
Unpaid tax amount[A]: $500,000;
Comments:
* FEMA recipient received IHP assistance of several thousand dollars;
* FEMA recipient has over a 10-year history of tax problems;
* While owing taxes, FEMA recipient earned compensation up to $300,000
prior to the hurricane;
* FEMA recipient purchased numerous vehicles, including a luxury
vehicle;
* IRS filed multiple tax liens against taxpayer's assets.
Case: 4;
Nature of work: Attorney;
Unpaid tax amount[A]: $400,000;
Comments:
* FEMA recipient received over a thousand dollars in disaster
assistance;
* FEMA recipient has a history of repeated noncompliance with paying
federal individual and employer payroll taxes,[B] spanning back to the
late 1980s and did not file tax returns for several years;
* Recipient transferred ownership of a large quantity of stock to a
family member while IRS was taking collection actions against the
recipient;
* IRS filed tax liens against recipient.
Case: 5;
Nature of work: Oil and gas entrepreneur;
Unpaid tax amount[A]: $400,000;
Comments:
* FEMA recipient received several thousand dollars in disaster
assistance;
* FEMA recipient's annual income prior to the hurricane was from
$50,000 to $100,000;
* FEMA recipient has a history of repeated federal tax noncompliance
dating back to the early 1990s;
* FEMA recipient forged a third party's signature to illegally transfer
land to avoid IRS seizure.
Source: GAO's analysis of IRS records, IHP assistance payments, and
other records.
[A] Rounded dollar amount of unpaid federal taxes as of September 30,
2005.
[B] Payroll taxes include employee's income taxes and Social Security
and Medicare taxes withheld from an employee's paycheck. Employers are
to collect and remit these taxes to the federal government. Employers
are deemed to have a fiduciary responsibility to hold withheld funds
"in trust" for the federal government until the employer makes a
federal tax deposit in that amount. The employer's owners or officers
may be held personally liable for these amounts and may be subject to
civil and criminal penalties for failure to remit payroll taxes.
[End of table]
Our previous forensic audits and related investigations found
significant control weaknesses in FEMA's disaster relief program that
have left the government vulnerable to significant fraud, waste, and
abuse. Our review of FEMA data found that in several of these cases,
the IHP recipient received disaster assistance without FEMA inspection
of the claimed damaged property or after the inspection actually found
no damage to the property. As a result, FEMA was at risk of paying
disaster assistance to recipients that were not entitled to such
benefits. For these five cases, we did not make a determination of
potential fraud related to the disaster relief program because it was
not included in the scope of this work.
Agency Comments and Our Evaluation:
On October 26, 2007, we received written comments on a draft of this
report from the Department of Homeland Security (DHS). In its written
comments, DHS stated that FEMA's administration of disaster assistance
programs to victims of hurricanes Katrina and Rita with tax liabilities
was consistent with federal law and policy. As recognized in our draft
report, DHS is not required to screen applicants for tax debts. We have
reprinted DHS's written comments in their entirety in the enclosure. In
addition, IRS and DHS provided technical comments on the draft report,
which we incorporated as appropriate.
As agreed with your offices, unless you publicly release its contents
earlier we plan no further distribution of this report until 30 days
from its date. At that time, we will send copies of this report to the
Secretary of Homeland Security and the Acting Commissioner of Internal
Revenue. We will make copies available to others upon request. In
addition, the report will be available at no charge on the GAO Web site
at [hyperlink, http://www.gao.gov].
Please contact me at (202) 512-6722 or kutzg@gao.gov if you have any
questions concerning this report. Contact points for our Offices of
Congressional Relations and Public Affairs may be found on the last
page of this report.
Signed by:
Gregory D. Kutz:
Managing Director:
Forensic Audits and Special Investigation:
Enclosure - 1:
[End of section]
Comments from the Department of Homeland Security:
U.S. Department of Homeland Security:
Washington, DC 20528:
October 26, 2007:
Mr. Gregory D. Kutz:
Managing Director:
Forensic Audits and Special Investigations:
U.S. Government Accountability Office:
441 G Street, NW:
Washington, DC 20548:
Dear Mr. Kutz:
Re: Draft Letter of Correspondence GAO-08-1018, Tax Compliance: Some
Hurricanes Katrina and Rita Disaster Assistance Recipients Have Unpaid
Federal Taxes (GAO Job Code 192258):
The Department of Homeland Security appreciates the opportunity to
review and comment on the draft letter of correspondence referenced
above. The U.S. Government Accountability Office (GAO) sought to
determine the magnitude of federal taxes owed by individuals receiving
disaster assistance benefit payments made under the Individual and
Housing Program (IHP) following hurricanes Katrina and Rita. GAO also
sought to provide examples of abusive or criminal activity related to
the federal tax system by IHP recipients with unpaid federal taxes. The
letter of correspondence contains no recommendations; so action on the
part of the Department is not warranted.
The Federal Emergency Management Agency's (FEMA's) administration of
disaster assistance programs involving Hurricanes Katrina and Rita
recipients with tax liabilities has been consistent with federal law
and policy. Disaster assistance provided to individuals with
outstanding tax debts does not constitute the same type of potential
improper payments or fraud that was the subject of other GAO reports
and investigations regarding controls within FEMA's disaster relief
programs. Additionally, disaster assistance payments are not considered
to be taxable income and are therefore not subject to the IRS
continuous levy program.
The results in brief section notes that "FEMA officials stated that
there is no law or regulation that requires FEMA to screen IHP
applicants prior to providing disaster assistance." However, the draft
does not cite the two existing portions of the law and federal
regulations indicating that we are not required to do such screening:
* Robert T. Stafford Disaster Relief and Emergency Assistance Act, P.L.
93-288, as amended, 42 U.S.C. 5121-5206, and Related Authorities (June
2007)- "Assistance not income- Federal major disaster and emergency
assistance provided to individuals and families under this Act, and
comparable disaster assistance provided by States, local governments,
and disaster assistance organizations, shall not be considered as
income or a resource when determining eligibility for or benefit levels
under federally funded income assistance or resource-tested benefit
programs." 42 U.S.C. Sec. 5155(d),
* 44 C.F.R. Sec. 206.110 (g) – Emergency Management and Assistance
(Revised October 1, 2006) – "Exemption from Garnishment – All
assistance provided under this subpart is exempt from garnishment,
seizure, encumbrance, levy, execution, pledge, attachment, release of
waiver. Recipients of rights under this provision may not reassign or
transfer the rights. The exemptions do not apply to FEMA recovering
assistance fraudulently obtained or misapplied."
The Department of Homeland Security and FEMA remain committed to the
effective and efficient administration of federal disaster relief
programs, including the prevention of fraud, waste and abuse.
Sincerely,
Signed by:
Steven J. Pecinovsky:
Director:
Departmental GAO/OIG Liaison Office:
[End of enclosure]
Related GAO Products:
Tax Compliance: Thousands of Organizations Exempt from Federal Income
Tax Owe Nearly $1 Billion in Payroll and Other Taxes. GAO-07-1090T.
Washington, D.C.: July 24, 2007.
Tax Compliance: Thousands of Organizations Exempt from Federal Income
Tax Owe Nearly $1 Billion in Payroll and Other Taxes. GAO-07-563.
Washington, D.C.: June 29, 2007.
Tax Compliance: Thousands of Federal Contractors Abuse the Federal Tax
System. GAO-07-742T. Washington, D.C.: April 19, 2007.
Medicare: Thousands of Medicare Part B Providers Abuse the Federal Tax
System. GAO-07-587T. Washington, D.C.: March 20, 2007.
Internal Revenue Service: Procedural Changes Could Enhance Tax
Collections. GAO-07-26. Washington, D.C.: November 15, 2006.
Tax Debt: Some Combined Federal Campaign Charities Owe Payroll and
Other Federal Taxes. GAO-06-887. Washington, D.C.: July 28, 2006.
Tax Debt: Some Combined Federal Campaign Charities Owe Payroll and
Other Federal Taxes. GAO-06-755T. Washington, D.C.: May 25, 2006.
Financial Management: Thousands of GSA Contractors Abuse the Federal
Tax System. GAO-06-492T. Washington, D.C.: March 14, 2006.
Financial Management: Thousands of Civilian Agency Contractors Abuse
the Federal Tax System with Little Consequence. GAO-05-683T.
Washington, D.C.: June 16, 2005.
Financial Management: Thousands of Civilian Agency Contractors Abuse
the Federal Tax System with Little Consequence. GAO-05-637. Washington,
D.C.: June 16, 2005.
Financial Management: Some DOD Contractors Abuse the Federal Tax System
with Little Consequence. GAO-04-414T. Washington, D.C.: February 12,
2004.
Financial Management: Some DOD Contractors Abuse the Federal Tax System
with Little Consequence. GAO-04-95. Washington, D.C.: February 12,
2004.
[End of section]
Footnotes:
[1] See related GAO products at the end of this report.
[2] As classified by GSA's Catalog of Federal Domestic Assistance,
published annually pursuant to 31 U.S.C. § 6104 and OMB Circular No. A-
89, Federal Domestic Assistance Program Information (Aug. 17, 1984).
[3] IHP provides temporary housing or financial assistance to eligible
victims.
[4] GAO, Expedited Assistance for Victims of Hurricanes Katrina and
Rita: FEMA's Control Weaknesses Exposed the Government to Significant
Fraud and Abuse, GAO-06-403T (Washington, D.C.: Feb. 13, 2006).
[5] GAO, Hurricanes Katrina and Rita Disaster Relief: Improper and
Potentially Fraudulent Individual Assistance Payments Estimated to Be
Between $600 Million and $1.4 Billion, GAO-06-844T (Washington, D.C.:
June 14, 2006).
[6] GAO, Hurricanes Katrina and Rita Disaster Relief: Continued
Findings of Fraud, Waste, and Abuse, GAO-07-252T (Washington, D.C.:
Dec. 6, 2006).
[7] There is a 10-year statute of limitations beyond which IRS is
prohibited from attempting to collect tax debt. The 10-year time may be
suspended for a variety of reasons, including for periods during which
the taxpayer is involved in a collection due process appeal,
litigation, or a pending offer in compromise or installment agreement.
As a result, fig. 1 includes taxes that are for tax periods from more
than 10 years ago.
[8] According to IRS, nonfilers and underpayment of taxes constituted
the rest of the gross tax gap.
[9] OMB Circular No. A-129, Policies for Federal Credit Programs and
Non-Tax Receivables (Revised November 2000).
[End of section]
GAO's Mission:
The Government Accountability Office, the audit, evaluation and
investigative arm of Congress, exists to support Congress in meeting
its constitutional responsibilities and to help improve the performance
and accountability of the federal government for the American people.
GAO examines the use of public funds; evaluates federal programs and
policies; and provides analyses, recommendations, and other assistance
to help Congress make informed oversight, policy, and funding
decisions. GAO's commitment to good government is reflected in its core
values of accountability, integrity, and reliability.
Obtaining Copies of GAO Reports and Testimony:
The fastest and easiest way to obtain copies of GAO documents at no
cost is through GAO's Web site [hyperlink, http://www.gao.gov]. Each
weekday, GAO posts newly released reports, testimony, and
correspondence on its Web site. To have GAO e-mail you a list of newly
posted products every afternoon, go to [hyperlink, http://www.gao.gov]
and select "Subscribe to Updates."
Order by Mail or Phone:
The first copy of each printed report is free. Additional copies are $2
each. A check or money order should be made out to the Superintendent
of Documents. GAO also accepts VISA and Mastercard. Orders for 100 or
more copies mailed to a single address are discounted 25 percent.
Orders should be sent to:
U.S. Government Accountability Office:
441 G Street NW, Room LM:
Washington, D.C. 20548:
To order by Phone:
Voice: (202) 512-6000:
TDD: (202) 512-2537:
Fax: (202) 512-6061:
To Report Fraud, Waste, and Abuse in Federal Programs:
Contact:
Web site: [hyperlink, http://www.gao.gov/fraudnet/fraudnet.htm]:
E-mail: fraudnet@gao.gov:
Automated answering system: (800) 424-5454 or (202) 512-7470:
Congressional Relations:
Gloria Jarmon, Managing Director, JarmonG@gao.gov:
(202) 512-4400:
U.S. Government Accountability Office:
441 G Street NW, Room 7125:
Washington, D.C. 20548:
Public Affairs:
Chuck Young, Managing Director, youngc1@gao.gov:
(202) 512-4800:
U.S. Government Accountability Office:
441 G Street NW, Room 7149:
Washington, D.C. 20548:
