Tags: congressional | watchdog | irs | math

Watchdog Hints IRS is Kind of Fuzzy on Its Math

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Monday, 14 Nov 2011 03:32 PM Current | Bio | Archive

I understand the government wants more tax revenue. But before we give them more, shouldn't we be asking how well they are doing with what they are taking now?

The U.S. Government Accountability Office (GAO), in its latest report, says effectively that the Congressional watchdog really doesn't know because the IRS can't produce accurate financial statements and records.

In the annual report on the IRS' fiscal years 2011 and 2010, the GAO takes two contradictory positions. The report first makes one statement that the IRS' financial statements are fairly presented in all material respects. Then the GAO focuses the rest of its report explaining that the IRS suffers from "serious deficiencies" in internal control, financial management and compliance systems, as well as other deficiencies.

What does this mean?

It means that the GAO is going out of its way to avoid saying that the current administration of the tax system is a failure — and then saying it.

The GAO states its opinion that, essentially, the IRS could not provide it with "reasonable assurance that losses and misstatements material to the financial statements would be prevented or detected and corrected timely."

This is not supposed to be happening in reportedly the best agency of the U.S. government.

In 1996, the Federal Financial Management Improvement Act (FFMIA) was passed. The purpose was to ensure that government financial managers have systems which provide accurate, reliable and timely information.

The GAO finds the IRS is not in compliance.

Even the financial information that the IRS uses for day-to-day decisions is not accurate, complete and timely.

You would think that after 15 years and all the billions of dollars spent by the IRS, it could at least have reliable financial statements.

How long do you think the government would allow you to be noncompliant with each and every exacting requirement of the tax code?

Even more troubling is the fact that taxpayers live in terror of making even the slightest innocent mistake.

The hypocrisy of it all is just galling.

How is possible for the government — that is Congress and the president — to ask the taxpayers to trust them for even more trillions of dollars?

They are the ones responsible for the oversight of the tax administration.

So how can they be reforming the tax code when, "in fiscal year 2011, the IRS' systems did not substantially comply with FFMSR [Federal Financial Management Systems Requirements] or federal accounting standards."

Not only that, but there is no assurance, according to the GAO, that the information they get from taxpayers is safeguarded.

This is all happening right now.

Can you imagine what a ghastly story this will become after the full impact of Obamacare hits and the IRS then has to also manage the nation's healthcare system?

Currently, the United States spends $2.7 trillion dollars on healthcare. This is larger than what France spends for everything. If U.S. healthcare was a country, it would be the fifth largest economy in the world.

This all reminds me of "Apocalypse Now," when Colonel Kurtz (played by Marlon Brando) says his last line: "The horror ... the horror."

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Kleinfeld
I understand the government wants more tax revenue. But before we givethem more, shouldn't we be asking how well they are doing with what theyare taking now? The U.S. Government Accountability Office (GAO),in its latest report, says effectively that the Congressional...
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Monday, 14 Nov 2011 03:32 PM
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