U.S. flag

An official website of the United States government

Dot gov

Official websites use .gov
A .gov website belongs to an official government organization in the United States.

Https

Secure .gov websites use HTTPS
A lock () or https:// means you’ve safely connected to the .gov website. Share sensitive information only on official, secure websites.

The IRS Has Not Adequately Prioritized Federal Civilian Employee Nonfilers

Report Information

Date Issued
Report Number
2023-30-011
Report Type
Audit
Joint Report
No
Agency Wide
Yes (agency-wide)
Questioned Costs
$0
Funds for Better Use
$0
View Report

Recommendations

Work with the Office of Fraud Enforcement and CI to enhance Internal Revenue Manual (IRM) procedures and develop annual refresher training to the FERDI staff that can be used to develop potential fraud referrals.

Revise IRM 5.19.18 to refer employees to the Fraud Handbook for fraud and/or willfulness procedures as soon as indications of fraud are present in any FERDI nonfiler case.

Conduct an annual analysis on open FERDI cases that have multiple nonfiling years and determine the next course of action dependent upon this analysis and recommendations from the Office of Fraud Enforcement. Cases that are deemed to have indicators of willfulness and/or fraud should be referred to CI.

Work with the DOJ to develop referral criteria for Federal employee nonfilers with multiple years of unfiled tax returns, including standalone nonfiler cases that can be investigated and prosecuted where warranted.

Share this report and recommendation with the Treasury Department Office of Tax Policy to consider a legislative proposal to amend I.R.C. § 7203 by replacing “misdemeanor” with “felony,” and additionally, by replacing the time for potential imprisonment from “one year” to “two years,” thereby making willful nonfiling a felony.