United States Government Accountability Office GAO November 2011 Report to the Secretary of the Treasury _part4 pot

Management Discussion and Analysis Page 39 GAO-12-165 IRS’s Fiscal Years 2011 and 2010 Financial Statements INTERNAL REVENUE SERVICE Management Discussion and Analysis For the Fiscal Year Ended September 30, 2011 17 Integrated Financial System (IFS) FY 2011 accomplishments include: ♦ Upgraded the Business Ware- house (BW) for improved perfor- mance and reporting capabilities. ♦ Improved security of IFS by upgrading to Oracle 11g. assessments and write-offs. Under federal accounting standards, unpaid assessments require taxpayer or court agreement to be considered federal taxes receivable. Assessments not agreed to by taxpayers or the courts are considered compliance assessments and are not considered federal taxes receivable. Assessments considered to have no future collection potential are called write-offs. The following provides detail on unpaid assessments: ♦ Taxes receivable represent $147 billion (41%) of unpaid assessments and increased $9 billion (7%) from $138 billion as of September 30, 2011. About $112 billion (76%) of this balance is estimated to be uncollectible due primarily because of the economic situations of the taxpayers. Except for bankruptcy situations, the IRS may continue collection actions for 10 years after the assessment. About $35 billion (24%) of taxes receivable is estimated to be collectible. ♦ Compliance assessments of $103 billion represent amounts that have not been agreed to by either the taxpayer or a court. These assessments result primarily from various IRS enforcement programs promoting voluntary compliance. ♦ Write-off amounts of $106 billion include amounts owed by defunct corporations with no assets and failed financial institutions. The remaining amounts are owed by taxpayers with extreme economic and/or financial hardships, deceased taxpayers, and taxpayers who are insolvent due to bankruptcy. The Integrated Financial System (IFS) The IFS is the financial management system for the administrative activities in IRS. IFS also provides timely financial statements and reports in accordance with the federal accounting and reporting standards including information for budgeting, analysis, and government- wide reporting. In addition, IFS provides the core processes of General Ledger, Accounts Payable, Accounts Receivable, Budget Execution, Cost Accounting, Administrative Tax and Travel Accounting, Cost Allocations, some tax processing functionality for Health Coverage Tax Credit (HCTC) payments, Budget Formulation, Labor Forecasting and Budget Execution decision support. This is trial version www.adultpdf.com . from $138 billion as of September 30, 2011. About $112 billion (76%) of this balance is estimated to be uncollectible due primarily because of the economic situations of the taxpayers. Except. not been agreed to by either the taxpayer or a court. These assessments result primarily from various IRS enforcement programs promoting voluntary compliance. ♦ Write-off amounts of $106 billion. System (IFS) FY 2011 accomplishments include: ♦ Upgraded the Business Ware- house (BW) for improved perfor- mance and reporting capabilities. ♦ Improved security of IFS by upgrading to Oracle 11g.