GAO - Report of financial audit of IRS  

December 12: The U.S. Government Accountability Office today posted a report of an annual audit the IRS financial statements. Financial Audit: IRS's Fiscal Years 2013 and 2012 Financial Statements, GAO-14-169 (December 12, 2013)

According to the 119-page report [PDF 1.24 MB], in the GAO’s opinion:

  • The IRS fiscal years 2013 and 2012 financial statements are fairly presented in all material respects.
  • However, the IRS did not maintain effective internal control over financial reporting as of September 30, 2013, because of a continuing material weakness in internal control over unpaid tax assessments.
  • Serious control deficiencies related to unpaid tax assessments are likely to continue until the IRS significantly enhances the capabilities of the systems it uses to account for unpaid tax assessments, and improves controls over the recording of information in taxpayer accounts so that reliable transaction-based balances for taxes receivable can be ultimately recorded in the general ledger.
  • In addition, the IRS faces significant ongoing financial management challenges associated with (1) safeguarding the large volume of sensitive hard copy taxpayer receipts and related information, and (2) its exposure to significant improper refunds from identity theft.

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