Additional Actions Are Needed to Improve and Secure the Income Verification Express Service Program

The IVES Program is authorized to have 14 analysts and one manager to oversee the program. However, for most of CY 2021, there were only five analysts assigned to support the IVES Program, and one of the analysts was serving as the temporary manager. On April 22, 2022, we notified the Director, Submission Processing, Wage and Investment Division, of our concerns with continued staffing shortages. We recommended that IRS management cancel or permanently reassign the two individuals on long-term details to other IRS functions and obtain funding to add additional analysts, as needed, for the IVES Program to be fully and permanently staffed.

On February 17, 2022, we notified the Director, Submission Processing, Wage and Investment Division, of our concerns with participant applications not being timely processed. IVES Program guidelines require that applications to participate in the IVES Program be processed by the IVES Headquarters office. However, we found procedures to process IVES applications were inefficient and undocumented. For example, procedures did not ensure that the IVES sites were doing preliminary checks of the participant applications to determine if they were accurately completed (e.g., ensuring that a signature was present) and there were no measurable goals or policies for completing the applications in a timely manner. We recommended that IRS management immediately determine the backlog of participant applications and develop a plan to address the backlog of applications.

On February 17, 2022, we recommended that the Director, Submission Processing, Wage and Investment Division, develop a plan to centralize the processing of all participant applications. In the interim, we recommended that management ensure that IVES coordinators at each site begin performing minimum checks upon receipt of the application to avoid unnecessary delays in processing.

On February 17, 2022, we notified the Director, Submission Processing, Wage and Investment Division, of our concerns with the lack of metrics/goals for processing participant applications. We recommended that IRS management update its internal guidance with this information.

On April 22, 2022, we notified the Director, Submission Processing, Wage and Investment Division, of our concerns with a lack of authentication of taxpayer identity within the IVES Program. IVES analysts are responsible for reviewing submissions by IVES participants on their continued compliance with IVES Program electronic signature (e-signature) policies and procedures. IVES analysts review the submission for sufficiency of the audit and independence of the auditor. We found that reviews of IVES participant compliance with e-signature policies were largely not conducted. As such, IVES participants that did not submit their required report did not have their access to the e-signature program revoked. This increases the risk that IVES participants may be more noncompliant with IVES Program policies regarding authentication and validation of taxpayer identity. We recommended that management implement a system for revocation and notification of participants if an IVES analyst reviews the results of the participant’s independent audit of their e-signature system and deems the audit results or the system to be insufficient.