IRS measuring effect of “10 Deadly Sins”

Officials are still in the early stages of measuring the effect of Section 1203 on tax enforcement, GAO says.

The IRS and the Treasury Department's inspector general for tax administration have taken preliminary steps to evaluate the Section 1203 process, a series of 10 regulations that are designed to protect taxpayers from improper actions by IRS employees.

The Government Accountability Office released a report (GAO-04-1039R) about the rules, dubbed the "10 deadly sins" by IRS employees, on Tuesday, but the watchdog agency declined to make specific recommendations, instead citing the steps already being taken by the IRS.

Section 1203 was created as part of the 1998 IRS Restructuring and Reform Act. The 10 infractions, include providing a false statement regarding a taxpayer, intentional failure to get proper signatures before seizing a taxpayer's property, failing to file a tax return on time and threatening to audit a taxpayer for personal gain, and can result in an IRS employee being fired.

After Section 1203 was implemented, however, lawmakers and IRS officials worried that the regulations could intimidate tax enforcement officials and prevent them from performing their jobs effectively. In its latest report, GAO found that the agency has taken initial steps to measure the effect of the rules, but has not launched a comprehensive effort.

"This survey is important to IRS management to periodically get an indication of how Section 1203 affects IRS employees' willingness to enforce the tax laws," GAO said in a letter to Reps. Bill Thomas, R-Calif., chairman of the House Ways and Means Committee and Amo Houghton, R-N.Y. "IRS has not yet committed to regularly surveying IRS employees, in part because of the time and effort of doing surveys."

The report noted, however, that the IRS is considering such a survey.

IRS Commissioner Mark Everson said the agency already ensures an independent review of all Section 1203 allegations and has goals in place for processing those cases in a timely manner. The IRS is developing "a balanced set of goals and measures for evaluating the Section 1203 process," according to Everson.

"We will continue to look at ways to measure our current processing and to improve service to taxpayers and employees in implementing Section 1203," Everson wrote in a response to GAO's report.