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TIGTA Report on the Employment Tax Examination Process

On Wednesday, the Treasury Inspector General for Tax Administration (TIGTA) released a report titled “Improvements to the Employment Tax Examination Process Are Needed to Increase Taxpayer Compliance and Collection Potential.” This report was conducted to assess the IRS’s controls over the selection and examination of employment tax cases, including relief from employment tax obligations.

Based off their findings that the IRS does not have a method to track business taxpayers that were granted relief from Section 530 provisions, TIGTA recommended five suggestions.

The suggestions include:

  • (1) require that quality standards be documented in the classification process and create a segregation of duties for managerial reviews;
  • (2) ensure that all required managerial reviews are properly conducted and documented;
  • (3) create a tracking mechanism for cases that are granted Section 530 relief;
  • (4) issue a policy alert to remind examiners of procedures and guidance when documenting cases that were granted Section 530 relief; and
  • (5) ensure that managers are verifying that all required and applicable documentation is included in Issue Management System case files.

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