Appendix I Material Weaknesses, Significant Deficiency, and Compliance Issues_2 pptx

Appendix I Material Weaknesses, Significant Deficiency, and Compliance Issues Page 123 GAO-12-165 IRS’s Fiscal Years 2011 and 2010 Financial Statements Budget (OMB) Circular No. A-123 49 and we began reviewing these test results. In our review and validation of IRS’s testing of 59 statistically selected tax cases with liens in which the t axpayers’ total outstanding tax liabilities were either paid off or abated during fiscal year 2011, we noted that IRS’s testing identified two instances in which it did not release the applicable federal tax lien within the statutorily mandated 30 days. 50 On the basis of this sample of unpaid tax assessment c ases resolved in the first 6 months of fiscal year 2011 for which it had filed a tax lien, IRS estimated that it did not release liens within 30 days for 3.4 percent of the cases. IRS is 95 percent confident that the percentage of cases in which it did not release the lien within 30 days does not exceed 10.3 percent. On the basis of these results, we concluded that the potential noncompliance in the tested population exceeded the amount IRS designated as acceptable for its test. 51 As identified by IRS, the delay in lien releases was caused by processing delays and errors. In one case, IRS did not timely update the taxpayer’s account to reflect that the taxpayer had been discharged of the taxes in bankruptcy court. In the other case, IRS needed more than one attempt to correctly post the taxpayer’s satisfying payment onto the taxpayer’s master file account module. In fiscal year 2000, we issued a report discussing the delays IRS was experiencing in releasing tax liens and recommended that IRS analyze the cause of delays in releasing liens and 49 OMB’s revised Circular No. A-123, Management’s Responsibility for Internal Control, became effective on October 1, 2005. App. A to OMB Circular No. A-123 provides internal control guidance and requirements for executive branch agencies to follow in conducting management’s assessment of the effectiveness of internal control over financial reporting. On the basis of this assessment, agency management is required to prepare an assurance statement on the effectiveness of internal control over financial reporting to be included in its performance and accountability report. These requirements are applicable to the  24 Chief Financial Officers Act agencies, including the Department of the Treasury, of which IRS is a significant component. 50 The time between satisfaction of the liability and release of the lien in these two cases was 36 and 41 days. 51 When evaluating statistical results, GAO and IRS compare the projected upper error limit to the acceptable error rate set for the test. In this case, the acceptable noncompliance rate is 5 percent while the projected upper error limit is 10.3 percent. Consequently, IRS and we concluded that IRS continued to be noncompliant with the lien release provisions of the Internal Revenue Code. This is trial version www.adultpdf.com . Appendix I Material Weaknesses, Significant Deficiency, and Compliance Issues Page 123 GAO- 12- 165 IRS’s Fiscal Years 20 11 and 20 10 Financial Statements Budget (OMB) Circular No. A- 123 49 . liabilities were either paid off or abated during fiscal year 20 11, we noted that IRS’s testing identified two instances in which it did not release the applicable federal tax lien within the. agencies, including the Department of the Treasury, of which IRS is a significant component. 50 The time between satisfaction of the liability and release of the lien in these two cases was 36 and