Audit: IRS can further improve oversight of investigative equipment

The criminal investigation division, the audit found, “did not always properly conduct the annual physical verifications, maintain complete documentation to support investigative equipment disposal transactions, and did not review user permissions for its management information system.”

“The risk of loss, theft, and spending funds to purchase unnecessary investigative equipment can decrease the public’s confidence in the Internal Revenue Service’s (IRS) ability to enforce tax laws in a fair, equitable, and consistent manner,” the audit also said. 

The IRS agreed with most or all of the audit’s recommendations for improving its controls in those areas, but did not sign on when the inspector general advised rolling back access to areas where investigative equipment and weapons are kept. The agency responded that offices for IRS criminal investigators are already limited to that division’s employees. 

According to the new audit, the criminal investigation division had close to 44,000 items in its investigative equipment inventory in October 2009, with those materials valued at roughly $125.5 million. Motor vehicles accounted for almost half of that total value, while radio, video and audio equipment were worth close to a combined $50 million.   

In its September 2005 report, the tax administration inspector general recommended that the IRS division make 14 separate corrections to its oversight of investigative materials, after finding that items were being haphazardly kept in a warehouse. 

The inspector general found that the division had successfully implemented eight of those recommendations and was better supervising its inventory these days. But the office also reported that the IRS’ criminal investigators could still improve their annual inventory reviews, among other things.