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Some Legal Requirements to Deactivate Individual Taxpayer Identification Numbers Have Not Been Met

Report Information

Date Issued
Report Number
2018-40-011
Report Type
Audit
Joint Report
Yes
Participating OIG
Treasury Inspector General for Tax Administration
Agency Wide
Yes (agency-wide)
Questioned Costs
$0
Funds for Better Use
$3,294,227
View Report

Recommendations

The Commissioner, Wage and Investment Division, should modify its deactivation schedule to improve its timeliness in complying with the requirements of the PATH Act.

The Commissioner, Wage and Investment Division, should revise computer programming to deactivate ITINs when the Form W-7, Application for IRS Individual Taxpayer Identification Number, was rejected and the ITIN status field in the ITIN RTS is blank.

The Commissioner, Wage and Investment Division, should deactivate the 89,105 ITINs TIGTA identified that should have been deactivated.

The Commissioner, Wage and Investment Division, should review the 1,298 tax returns for which the IRS incorrectly paid personal tax exemptions and refundable credits as a result of the ITIN not being deactivated to ensure that tax benefits paid in error are recovered.

The Commissioner, Wage and Investment Division, should revise the methodology used to identify ITINs for deactivation to include all ITINs used on prior tax year paper-filed tax returns and all ITINs that are corrected during IRS processing to ensure that ITINs are not erroneously deactivated.
Recommendation rejected by IRS