IRS: Taxpayer Tips Can Turn Into Cash

Posted on October 12, 2017 by

photo of a pile of moneyThe Internal Revenue Service helps keep the federal government funded by enforcing tax laws and working to ensure that everybody pays their share. Nevertheless, every year some taxpayers—intentionally or inadvertently—overstate deductions, understate income, and don’t pay what they owe.

The IRS has an estimated $406 billion tax gap—the difference between the taxes owed and the taxes IRS has collected. To help close that gap, the IRS encourages the public to provide information about people and businesses that violate federal tax laws.

Today we’re examining some of the programs the IRS uses to get the public to report potential tax violations to the IRS.

Many options for helping

Members of the public can report potential tax violations to the IRS through 9 different referral programs. The largest is the whistleblower program, which pays whistleblowers 15-30% of the money the IRS collects based on a tip. How many people are reporting? The program received more than 13,000 tips in fiscal year 2016 and has collected over $3 billion since fiscal year 2007.

photo of the IRS building signIn addition, since expanding the whistleblower program about 10 years ago, the IRS has received thousands of high-dollar tips—those involving more than $2 million. While it’s collected on only 49 of these tips through fiscal year 2016, 17 of those resulted in more than $267 million paid to tipsters.

Other ways to share information

And there are 8 more processes, programs, and offices that allow the public to report different types of tax violators or violations. For example, the

  • Information Referral Process allows the public to report general types of tax violations by individuals or businesses
  • Identity Theft program, as you might imagine, is for people to report actual or potential incidents of ID theft
  • Return Preparer Office receives allegations related to tax return preparers who file or alter tax returns without the taxpayer’s consent

Other programs encourage the public to report suspected tax avoidance schemes or tax shelters, or suspected violations by tax-exempt organizations or retirement plans.

Our full report on IRS’s public referral programs provides details on each program.

Room for improvement

Despite collecting billions of dollars, the IRS could improve its public referral programs. For example, while a few programs communicate and coordinate with each other, they don’t share information across all 9 programs. Because of this, a person could report possible tax law violations to multiple programs—causing multiple offices to review the same claims. We recommended that the IRS set up a mechanism to help with information sharing, coordination, and communication.

To learn more about the tax gap and how to close it, check out our Tax Gap Key Issues page.

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The Surge Sealift Fleet—Shipping Military Supplies For Any Major Event

Posted on October 10, 2017 by

Surge Sealift Fleet ship More than 90% of military equipment, supplies, and fuel travels by sea. When the military deploys anywhere, the demand for naval transportation grows.

Additional shipping capacity must be ready to assist in any major event, ranging from a natural disaster to war. This requires both active and reserve ships. Today, the WatchBlog looks at our recent report on the surge sealift fleet of the Navy’s Military Sealift Command and the Department of Transportation’s Maritime Administration—61 reserve ships that provide millions of square feet of cargo capacity to transport equipment and supplies around the world.

Is the fleet ready for action?

When additional cargo capacity is needed, the Department of Defense changes the status of the surge sealift fleet from “reserve” to “active.” Nearly all of the surge sealift fleet is expected to be fully operational within 5 days of activation.

Earlier this year, we reported that the surge sealift fleet’s readiness is declining. Specifically, more mission critical equipment (such as engines and diesel generators) is breaking. Also, regular maintenance is taking longer than planned.

We also found that the fleet is aging. On average, the ships are nearly 40 years old, with some ships well over 50. Many of them are expected to be retired over the next 10 years. In fact, our analysis shows that the surge sealift fleet will lose over 25% of its cargo capacity by 2027 (as shown in the figure).

Figure 5: Projected Surge Sealift Capacity Decreases over Time, Based on Programmed Service Life(excerpted from GAO-17-503)

Restoring the fleet

Last year, the Deputy Secretary of Defense directed the Navy to develop a plan for recapitalizing (rebuilding or replacing) the surge sealift fleet’s ships. The Navy’s plan includes a three-pronged approach:

  • Near term – extending the service life of existing ships
  • Mid-term – acquiring used ships
  • Long term – building new ships

We found that the Navy’s recapitalization strategy is missing a few elements that we believe are necessary. For example, the Navy’s plan does not include a needs assessment with a complete inventory of ships and their condition. Without such an inventory, how does the Navy know exactly what it really needs?

The Navy’s strategy also does not prioritize projects by comparing the costs and benefits of proposed investments. This information can help ensure that the Navy is pursuing the most cost-effective projects as it replaces this crucial reserve fleet.

Figure 1: Sixty-One Ships of the Surge Sealift Fleet(excerpted from GAO-17-503)

We recommended that the Navy incorporate these and other leading practices for capital investment planning in a comprehensive long-term recapitalization plan, and it agreed.

You can read more about these ships in our report.

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Tracking Deliveries and Inventory of DOD Assets

Posted on October 5, 2017 by

These days, if you order an item online, you can usually track it as it makes its way from the warehouse to your doorstep. It isn’t quite so simple for the Department of Defense—which has struggled for years to be able to provide accurate information on the location, quantity, and condition of its assets (e.g., spare parts, food, and fuel).

Since 1990, we have included DOD supply chain management on our biannual High Risk list, which discusses, among other things, federal areas in need of broad-based transformation to improve operations. In 2005, we added “asset visibility” to DOD’s supply chain management high-risk area.

Today’s WatchBlog explores DOD’s recent progress in improving its ability to track items in its inventory, and discusses the challenges that remain. Continue reading →

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Watching Out for Synthetic Identity Fraud

Posted on September 28, 2017 by

information technologyAs real WatchBlog fans know, over the years we’ve covered identity theft issues for a few reasons:

So, today on the WatchBlog, we’re focusing on yet another type of identity theft: “synthetic identity fraud.” This happens when a criminal, for example, steals a Social Security number and creates a fictitious identity with which to commit fraud. We’ll also look at highlights from our panel on the subject. Continue reading →

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Our Increasingly Connected World — The Internet of Things 

Posted on September 26, 2017 by

GAO logoCell phones, coffee makers, washing machines, and numerous other consumer and industrial products are increasingly designed to gather data, connect to the Internet, and improve efficiency or assist with decision making.

Earlier this year, our Internet of Things technology assessment and Big Bite video podcast discussed some benefits, and potential risks, of our ever more connected world.

Today’s Watchblog delves a bit deeper into how IoT is affecting consumers, communities, and national defense. Continue reading →

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Doctor’s Orders: More Training in Primary Care

Posted on September 21, 2017 by

Thumbnail Health CareIt’s almost that time of year when tens of thousands of medical students gear up to apply for residency programs. These residency programs, also known as graduate medical education (think early seasons of Grey’s Anatomy), are the pipelines for our primary and specialty care doctors. Where medical residents choose to work—and how they choose to specialize—has a significant impact on the public’s access to healthcare.

There is particular concern that there are too few doctors in some rural parts of the country and health care access may be harder to come by in those areas.  Back in 2015, we reported on the health care workforce and found that federal programs did not target areas in which federal agencies had identified shortages, such as doctors in rural areas and potential shortages of primary care doctors.

In today’s WatchBlog, we’re taking a look at those issues and how trends in graduate medical education have changed. Continue reading →

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Navy Readiness: What Happens When Old Shipyards Meet a Modern Fleet?

Posted on September 19, 2017 by

Figure 16: Portsmouth Naval ShipyardTo defend the nation’s strategic interests across the globe, in 2016 the Navy announced a goal of expanding its fleet to 355 ships—a significant increase over its previous goal of 308 ships. In recent years, however, the Navy has struggled to maintain its existing fleet of 276 ships and submarines—in part because of a $4.8 billion backlog in facilities restoration and modernization projects at the naval shipyards. (This cost is separate from the cost to restore and maintain current ships.) To see the conditions at some of the shipyards and hear more details, check out our recent video: Continue reading →

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Watchdogs Watching the Emmys

Posted on September 15, 2017 by

GAO logoAs the country gears up to watch the 2017 Emmys this Sunday, we are astounded (again!) at the way art imitates life—the nominated TV shows are full of references to issues that GAO investigates.

From the streets of Atlanta to the wilds of outer space, check out what’s happening this Emmy season on today’s WatchBlog.

The Night Of Continue reading →

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Optimizing Federal Data Centers

Posted on September 12, 2017 by

Figure 1: Example of Data Center Server Racks at the Social Security Administration’s National Support CenterIn recent years, federal agencies have moved more and more of their services and operations online, increasing their need for computer power and data storage—and leading to a dramatic rise in the number of federal data centers. These buildings house computer systems and equipment and, as we’ve previously reported, have significant costs for hardware, software, real estate, and electricity. Continue reading →

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Dress Rehearsal: 2020 Census

Posted on September 7, 2017 by

Census takerOur staff are in the field this week observing the Census Bureau’s last complete test of operations before the 2020 Census. The “End-to-End Census Test” is the culmination of the Bureau’s research and planning efforts over the past decade to improve how it administers the census.

We’ve taken a look at these planning efforts in some recent reports, and today’s WatchBlog explores what we’ve found. Continue reading →

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