Tax Administration

IRS Needs More Reliable Information on Enforcement Revenues Gao ID: GGD-90-85 June 20, 1990

Pursuant to a congressional request, GAO reviewed the Internal Revenue Service's (IRS) revenue estimates generated by its various enforcement programs, focusing on: (1) overall IRS enforcement revenue estimates; (2) IRS budget estimates for collection and document matching programs; (3) the IRS Enforcement Resource Allocation Model (ERAM); and (4) IRS efforts to develop more reliable data on the results of its enforcement actions.

GAO found that: (1) IRS has recognized the need for a better management information system on the costs and revenues associated with its enforcement programs, but has made little progress in developing one; (2) IRS does not know how much revenue its enforcement program actually generates; (3) large discrepancies in two major IRS enforcement programs were attributable to uncertainty about actual revenues and insufficient information on how IRS made revenue projections; (4) improved data on actual revenues and sufficient data linking staffing and results could enhance the estimation process; (5) there was inadequate documentation to assess the reasons for variances between estimated and actual underreporter revenues; (6) IRS was not using ERAM as intended, and the agencies involved did not use ERAM because of their concern over its reliability; and (7) IRS does not know whether the planned information system will provide the comprehensive data needed to meet its objectives.

Recommendations

Our recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.

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