11.51.1. LB&I Audit Program Process for TIGTA and GAO

(1) The IRS Restructuring and Reform Act of 1998 (RRA 98) established TIGTA to provide independent oversight of IRS activities. As mandated by RRA 98, TIGTA assumed most of the responsibilities of the IRS’s former Inspection Service.

(2) TIGTA consists of mainly auditors and investigators who focus on the duties and responsibilities of the Inspector General for Tax Administration. Organizationally, TIGTA is placed within the Department of the Treasury, but it is independent of the Department and all other Treasury offices, including the Treasury Office of the Inspector General (OIG).

(3) TIGTA focuses on all aspects of tax administration. Its audit activities include:

1. Promoting economy, efficiency, and effectiveness in administering the nation’s tax system.

2. Detecting and preventing fraud, abuse, and deficiencies in IRS programs and operations.

3. Offering recommendations about existing and proposed legislation and regulations related to IRS programs and operations.

4. Ensuring compliance with applicable laws and regulations.

5. Informing the Secretary of the Treasury and Congress of problems and the progress the IRS is making to resolve them.

(4) The TIGTA Office of Audit identifies opportunities to improve tax administration by conducting comprehensive, independent performance and financial audits of IRS programs, operations, and activities.

(5) The Audit Program consists of reviews mandated by statute or regulation, as well as reviews identified through the annual audit planning and evaluation process. The TIGTA Office of Audit strategically evaluates IRS programs, activities, and functions so the IRS can direct its resources to the areas of highest vulnerability. TIGTA presents its audit program in the Annual Audit Plan, which it publishes at the beginning of each fiscal year.
For additional information see TIGTA's website: www.treas.gov/TIGTA.

(1) The GAO is an independent, nonpartisan agency that works for Congress. It gathers information to help Congress determine how well executive branch agencies are doing their jobs. The GAO answers questions such as whether government programs are meeting their objectives or providing good service to the public. Ultimately, the GAO ensures that the government is accountable to the American people. To that end, the GAO provides senators and representatives with the best information available to help them make informed policy decisions. The GAO supports congressional oversight by:

1. Evaluating how well government policies and programs are working.

2. Auditing agency operations to determine whether federal funds are being spent efficiently and effectively.

3. Investigating allegations of illegal and improper activities.

4. Issuing legal decisions and opinions.

(2) The GAO's final report meets short-term needs for information on a wide range of government operations. These reports also help the Congress better understand emerging, long-term issues with potentially far-reaching effects.

(3) For additional information see the GAO's website at www.gao.gov.

(1) Enterprise Audit Management (EAM) is responsible for:

1. Serving as the Servicewide single point of contact (SPOC) for GAO and TIGTA audits and inspections and evaluations.

2. Liaising between the IRS and GAO and TIGTA when addressing significant issues that arise during an audit.

3. Providing guidance and support to business units on the audit process, including post audit tracking and monitoring of planned corrective actions (PCAs).

4. Identifying audit stakeholders and assigning audit ownership, based on input from the business units.

5. Transmitting audit notifications, engagement letters, draft reports, final audit reports, or other audit-related documents to the appropriate offices.

6. Providing input to the business units as they develop responses to audit reports.

7. Monitoring the timeliness of IRS audit responses to ensure due dates are met.

8. Updating and maintaining the Enterprise Audit Database that documents and makes available important information about each open audit..

9. Elevating significant issues, concerns, audit findings, or related matters through the management chain to appropriate IRS leadership for information and action.

10. Retaining audit records per appropriate records retention requirements issued by the National Archives and Records Administration (NARA). See the IRM 1.15 series, Records and Information Management.

11. Facilitating audits throughout the audit lifecycle, from audit initiation through the reporting phases and post-audit tracking and monitoring of PCAs.

12. Monitoring the status of PCAs, validating the documentation submitted by business units to close PCAs, and ensuring record keeping via the Joint Audit Management Enterprise System (JAMES) once the final audit reports are issued.

(1) Legislative Affairs is responsible for:

1. Facilitating the 180-Day Letter approval process with the business units, including routing the 180-Day Letter package to the Deputy Commissioners or Commissioner for signature and mailing the 180-Day Letter responses to Congress.

2. Establishing the e-Trak control for 180-Day Letters upon the issuance of the final report by GAO and providing it to EAM for tracking.

(1) The role of Program and Business Solutions (PBS) is to support in the delivery and accomplishment of its mission, goals, and priorities by providing quality, timely, and effective services in several areas, including the Office of Technology and Program Solutions (TPS).

(2) TPS is the owner of the LB&I TIGTA/GAO Audit Program and houses Program Planning Coordination & Analysis (PPCA)

(1) The LB&I audit liaison is responsible for managing the LB&I inventory of TIGTA and GAO research projects and open audits and coordinating audit work with pertinent functional areas within and outside of LB&I. The audit liaison also coordinates requests for suggestions for TIGTA’s Annual Audit Plan with managers in LB&I.

(2) The LB&I audit liaison’s role is to:

1. Act as the primary point of contact for LB&I during the open audit process and track all research projects and audit inquiries from auditors.

2. Review TIGTA and GAO audit documents forwarded from EAM, such as engagement letters and audit reports and prepare transmittals to guide the appropriate offices within and outside LB&I (for cross-functional audits) on what actions are needed.

3. Forward engagement letters, briefings or audit reports, and any other audit-related documents such as inquiries received from TIGTA or GAO to the appropriate offices within and outside LB&I to request responses and status updates.

4. Schedule and facilitate LB&I pre-audit briefings for new LB&I lead audits before the opening conference.

5. Schedule and participate in audit openings, progress updates, midpoint briefings and closing conferences for assigned LB&I audits.

6. Participate at opening and closing conferences for assigned non-lead audits.

7. Answer inquiries, provide guidance, and resolve problems encountered during the open audits from managers, other audit liaisons, and functional coordinators.

8. Encourage the executive owner(s), and program manager(s) for each audit attend the opening conference to adequately address concerns with the audit objectives early in the audit process and the closing conference to provide comments about the recommendation(s) before TIGTA or GAO issues the draft report.

9. Help ensure timely management responses to auditors' inquiries and draft audit reports by answering or forwarding inquiries to the appropriate functional coordinators.

10. Monitor the Information Document Request (IDR) for the audit which includes audit inquiries and responses.

11. Review responses to draft audit reports before forwarding them for approval.

12. Maintain a SharePoint database to track the open audit inventory and keep detailed information on the audit progress.

13. Act as liaison between management and TIGTA or GAO on the resolution of problems encountered during the open audits.

14. Coordinate draft management responses until they have been signed and closed in e-Trak.

15. Prepare a signature package template with the review timeline for management responses and forward it to the functional coordinator.

16. Create SharePoint folders for each open audit and upload key documents, such as the engagement letter, discussion draft report, draft report, management response to the draft report, final report, and 180-Day Letters (only upon request from the audit lead).

17. Brief executives on the status of the open inventory (e.g., through the quarterly Business Performance Review (BPR) and audit inventory reports).

(1) The LB&I functional coordinator is responsible for coordinating the LB&I inventory of TIGTA and GAO open audits, including TIGTA audit planning, with pertinent functional areas within and outside their functional area, including other LB&I functions and business operating divisions.

(2) The role of the LB&I functional coordinator in the audit process is to:

1. Act as the primary point of contact for their functional area during the audit process.

2. Be familiar with IRMs related to the disclosure of taxpayer information to TIGTA and GAO and the accounting and reporting of this information to the Disclosure Office.

3. Forward engagement letters, audit reports, and any other audit-related documents received from the LB&I audit liaison to the appropriate offices within and outside their functional area, as needed, to request responses and status updates.

4. Participate in audit openings, research, progress updates, and closing conferences.

5. Serve as or identify a note-taker for each of the conferences above and share meeting notes with the LB&I audit liaison within three business days.

6. Maintain the IDR for the audit which includes audit inquiries and responses.

7. Monitor all audit planning and audit inquiries from auditors to ensure that responses are timely.

8. Review audit-related documents received from the LB&I audit liaison or audit teams, such as inquiries received and request for comments on audit reports, and coordinate with the appropriate offices within and outside their functional area, such as other functional coordinators in LB&I and audit liaisons outside LB&I, as needed.

9. Collect responses, review for completeness and forward responses to the audit liaison for submission to TIGTA or GAO.

10. Respond to inquiries or audit reports to the director or executive owners for the audits. Secure the necessary reviews and approvals from the management chain before submitting responses to requesters (e.g., auditors, LB&I audit liaison, or audit liaisons from another lead stakeholder organization).

11. Keep the executive owner, designee, and applicable program manager(s) abreast of audit developments to address concerns, as deemed necessary.

12. Answer inquiries from managers in their area about the status of the assigned open audits.

13. Act as liaison between management and LB&I audit liaison on the resolution of problems encountered during the open audits.

14. Act as liaison between functional area management and audit teams to clarify audit inquiries and request extension of due dates during the fieldwork phase.

15. Ensure the executive owner (e.g., director or designee) and program manager(s) for each audit attend the opening, research, progress update, and closing conferences to address concerns in the audit process dealing with potential audit findings and recommendations.

16. Assist the designated executive owner or program manager(s) in their area with the timely preparation and coordination of comments or responses to discussion drafts (TIGTA) or statements of facts (GAO), draft reports, and GAO final reports with recommendations.

17. Share copies of approved report comments and responses to draft reports and 180-day letters with the audit liaison by the due date provided.

18. Ensure that the director or program manager for the audit seeks concurrence from the audit team during the closing meeting on revisions to the discussion draft or statement of facts audit reports.

19. Help ensure timely management responses to draft audit reports by promptly assisting the program managers with the drafting of the management responses, coordinating comments received from managers within and outside their functional area and forwarding initial draft management response to the appropriate managers (e.g., senior manager, director) for review and comments before forwarding the draft responses by the given due dates to the LB&I audit liaison for additional review and processing.

20. Review management responses prepared by their functional area for proper format, sentence structure, and grammar before submitting to audit liaison.

21. Maintain files on each open audit with related documents, including the engagement letter, audit reports, and management responses to the draft reports.

22. Forward periodic or monthly audit inventory reports with pertinent managers in their functional area, as deemed appropriate by the functional area.

(1) The LB&I audit lead’s role is to:

1. Identify the appropriate SME(s). The SME’s name(s) should be provided to the functional coordinator and the audit liaison.

2. Become familiar with the issues addressed during the open audit and in discussion draft reports (TIGTA) or statements of facts(GAO).

3. Participate in audit openings, progress updates, and closing conferences and stay involved in the audit process.

4. Answer auditors’ inquiries and provide documents as requested during the audit, preferably through the functional coordinator and the audit liaison. If direct submission to TIGTA and GAO is required, the functional coordinator and audit liaison should be copied.

5. Stay in contact with the auditors during the audit to ensure the audit is progressing smoothly, request audit progress updates from TIGTA or GAO audit team and share updates with the functional coordinator and audit liaison.

6. Reach an agreement with the audit team on early findings, recommendations, and any monetary benefits in discussion draft reports (TIGTA) or statements of facts (GAO), and draft reports.

7. Provide written comments on discussion draft reports (TIGTA) or statements of facts (GAO) for the audit through the functional coordinator and the audit liaison.

8. Ensure timely responses to auditors' inquiries and discussion draft reports (TIGTA) or statements of facts (GAO) by promptly providing the information requested and starting to write management responses when the audit team issues the preliminary audit report.

9. Identify and coordinate cross-functional issues within and outside LB&I during the drafting of management responses to ensure adequate coordination when developing responses to the discussion draft reports (TIGTA) or statements of facts (GAO) and draft audit reports.

10. Recommend the adoption or rejection of audit recommendations based on strategic LB&I goals and objectives by assessing the merits of the recommendations and potential corrective actions based on their effect on the LB&I division's business goals, priorities, and resources available for implementation.

11. Develop practical corrective action plans for audit recommendations, including establishing realistic implementation dates.

12. Prepare management responses to draft reports for executive approval and ensure the audit reports provide accurate information.

13. Review management responses prepared by their functional area for proper format, sentence structure, and grammar before the functional coordinator submits to the audit liaison.

14. Provide periodic updates on the progress of open audits to the audit liaison through the functional coordinator.

15. Bring audit concerns to the attention of the executive owner of the audit, the functional coordinator and the audit liaison.

(1) The role of LB&I executives (directors) in the audit process is to:

1. Become familiar with the open audits assigned to their functional area.

2. Designate an LB&I program manager within their functional area for each audit to coordinate the audit work within and outside LB&I.

3. Attend audit pre-opening, opening, mid-point and closing conferences, and stay involved in the audit process as needed.

4. Ensure the area assumes a proactive approach during the audit process (e.g., brief the auditors early in the audit process on the programs under review, submit timely and substantive responses throughout the process).

5. Work with the audit team to reach an agreement on early findings or recommendations in discussion draft reports (TIGTA) or statements of facts (GAO).

6. Help resolve any cross-functional issues.

7. Review, approve and sign responses to draft audit reports.

8. Brief the LB&I commissioner and deputy commissioners on their audits, as needed.

9. Determine which audit recommendations to implement.

(2) The executive owner reaches the final decision on the implementation of recommendations for the audit.

(1) The table below provides definitions of acronyms.

(1) This meeting provides internal stakeholders with information on prior related audits and planned corrective actions, as applicable, and determines required participants and responsible parties.

(2) Once EAM has designated LB&I as the lead stakeholder for a new audit, LB&I holds the opening conference (usually a one-hour meeting) within one or two weeks after receipt of the engagement letter or study notification. TIGTA auditors may begin fieldwork before the opening conference takes place. Opening conference participants usually include appropriate LB&I executive-level officials, program managers and their pertinent staffs, staff from affected functions outside LB&I, EAM, and TIGTA or GAO officials, depending on the audit type.

(3) At the opening conference, auditors discuss the audit objectives, offices they plan to contact and communication expectations.

(4) The audit liaison should:

1. Determine the availability of critical internal and external stakeholders.

2. Schedule the virtual opening conference with TIGTA or GAO and coordinate the meeting with affected functions within and outside LB&I, as needed.

3. Solicit names, as listed in the Address Directory in Outlook, of important participants from all impacted BOD stakeholders.

4. Attach the engagement letter/study notification along with any other relevant correspondence (e.g., initial IDR) to the meeting invitation.

5. Send an invitation to the stakeholders, functional coordinators and essential participants. Invite them to forward as deemed appropriate.

6. Facilitate the opening conference.

(5) The designated LB&I functional coordinator for the new audit, or designated representative from their staff, is responsible for taking notes during the opening meeting and sharing them with the audit liaison and other meeting participants, as needed within three (3) business days.

(1) Treasury Order 115-01 establishes the functions of TIGTA. Section 5d states, "In carrying out their official duties, TIGTA personnel shall have the full cooperation of employees of the Department of the Treasury and shall have full and prompt access to all facilities of the IRS and related entities, including computer facilities and computer rooms, electronic databases and files, electronic and paper records, reports and documents, and other material available to the IRS and related entities, which relate to their programs and operations; and, when access is necessary to execute a function of TIGTA about a matter within the jurisdiction of TIGTA, all similar facilities throughout the Department."

(2) For TIGTA audits or investigations, two statutes allow disclosure of tax and related tax return information:

• Title 26 of the U.S. Code (Internal Revenue Code) section 6103 – if the data requested is tax information (in case of an audit of the IRS)

• Title 5 of the U.S. Code section 552a (The Privacy Act of 1974) – if the data requested are personnel records or other records retrieved by an identifier such as Standard Employee Identification (SEID) or Social Security Number (SSN).

(3) Both statutes have provisions allowing disclosure to TIGTA under certain conditions. IRC 6103(h)(1) allows the IRS to disclose information to Treasury employees with a "need to know" for tax administration purposes. The authority for releasing information covered by the Privacy Act is 5 USC 552a (b)(1). It is also governed by the "need to know" conditions to perform the auditor’s duties. The legislative history of RRA 98 states, "The Treasury Inspector General (IG) for Tax Administration has the same access to taxpayer returns and return information as does the Chief Inspector under present law."

(4) TIGTA may contact IRS managers or employees to gather information in connection with an open audit or research work before an audit. LB&I employees should consult with their managers who, in turn, should contact their area’s functional coordinator. The functional coordinator should contact the audit liaison for additional information on the inquiry.

(5) Any documents shared with TIGTA/GAO that have personally identifiable information (PII) or workload selection information (such as offical-use-only, or OUO), should be clearly identified on the document as such. The document containing PII or workload selection information should include a notification to TIGTA not to publicly publish the document.

(1) Shortly after EAM receives the GAO study notification letter, it prepares a transmittal or cover memorandum addressed to the official(s) designated as lead stakeholder(s) for the new audit (e.g., division commissioner). The memorandum transmitting the GAO study notification is known as the "disclosure memorandum" because it authorizes managers to allow access to tax return and information return documents to the GAO team in connection with the new review. The memorandum is forwarded with the GAO study notification to managers involved in the review, provides instructions to managers on how to handle GAO requests for taxpayer information and account for disclosure of such information based on IRM 11.3.23, Disclosure to the GAO.

(2) EAM issues a disclosure memorandum for each GAO study notification, which authorizes access to taxpayer records to GAO based on authority granted by IRC 6103(f)(4).

(3) The opening conference with GAO to discuss the new study should not take place until the designated lead stakeholder receives the disclosure memorandum from EAM.

(4) Managers should not provide taxpayer or return information to the GAO before EAM issues the disclosure memorandum.

(5) The designated lead executive(s) and pertinent program manager(s) should become familiar with the disclosure memorandum and discuss with the audit team at the opening meeting what IRS records and taxpayer information GAO needs.

(6) EAM notifies the appropriate functions by email about any changes in the original GAO audit plan such as access to taxpayer information, changes in audit objectives, expansion of audit sites, or closing an audit before issuing a draft report.

(7) The disclosure memorandum, addressed to the lead stakeholder(s) for the audit, provides specific disclosure instructions. It applies to managers within the IRS providing taxpayer information to GAO analysts or representatives. Employees should consult with their managers before releasing any information to GAO in connection with an ongoing review.

(8) IRM 11.3.23, Disclosure to the Government Accountability Office discusses GAO access to any tax or nontax information, with the exception of the identity of an informant or any information which will tend to reveal the identity of an informant, grand jury information, and certain information obtained under tax treaty that falls within the scope of a review. If information exists that would identify a confidential informant, either directly or indirectly, you should partner with EAM to coordinate with the appropriate business unit for authority to withhold the information. Similarly, if it appears that disclosure of tax information to the GAO would seriously impair a civil or criminal tax investigation, please coordinate with EAM to seek authorization to withhold such information.

(9) For additional information see IRM 1.29.1, Authorities and Responsibilities.

(1) Managers can disclose taxpayer information only to those GAO representatives whose names appear on the current list of GAO personnel designated to review IRS programs under IRC 6103(f)(4).

(2) GAO analysts or representatives should contact the appropriate manager (e.g., the designated primary contact within the lead stakeholder area or the audit liaison) to arrange for their visits to collect taxpayer information.

(3) If the name of the GAO representative requesting information is not in the list, managers should contact the audit liaison to request an updated list or addendum from the GAO.

(1) The lead executive owner for the GAO review and/or the designated program manager in LB&I is responsible for reviewing and approving responses to requests for information from the GAO involving tax returns or information returns, accounting for the disclosures of taxpayer information, and coordinating with the GAO to deliver the information requested by express mail.

(2) Subsection I of the Privacy Act and IRC 6103(p)(3)(A) govern accounting for the disclosure of tax returns and return information. Generally, managers may use Form 5466-B, Multiple Record of Disclosure, to account for tax disclosures, although in situations where managers are disclosing a large volume of records at one time (mass disclosures), they may use a narrative accounting (letter) instead. To account for the disclosure, the responsible manager(s) should use Form 5466-B or a narrative record (letter) providing specific information as described in the IRM. See IRM 11.3.37 for IRS procedures to create a record of the disclosure (an "accounting"). Managers should send copies of Form 5466-B to the appropriate campus (see IRM 11.3.37.3.1 ) or email *PGLD Disclosure Accounting mailbox for bulk/ narrative accounting, prior to the end of the calendar year, and to the audit liaison for record-keeping via encrypted email.

(3) Managers should send copies of Form 5466-B or narrative (letter) to the appropriate Disclosure Office and the audit liaison for record-keeping via encrypted email.

(4) Refer to Document 12990, IRS Records Control Schedule (RCS), Schedule 8, Item 44-A and Schedule 29, Item 46, Form 5644-B Multiple Records of Disclosure, to ensure records, in hard copy and electronic format, are appropriately managed, retained and archived in accordance with the National Archives and Records Administration (NARA) approved records retention and disposition authority.

(5) The Privacy Act of 1974 (5 USC 552a) and IRC 6103 (26 USC 6103) require the IRS to maintain an accurate accounting of the disclosure of records when the IRS discloses the information without the individual’s prior notification or consent. Subsection (b) of the Privacy Act requires an accounting for the disclosure of non-tax information about individuals (i.e., personnel records, travel vouchers, etc.). Form 5482, Record of Disclosure, is used to account for disclosure of the non-tax records. Refer to Document 12990, Schedule 8, Item 44-B, Form 5482 Record of Disclosure (Privacy Act of 1974), for the NARA-approved records retention and disposition authority.

(6) The narrative record of accounting letter should include:

1. Date of disclosure

2. Name of agency receiving the information

3. Purpose of the disclosure (i.e., disclosure authority under IRC 6103(f)(4)(A))

4. The category (IMF or BMF) and number of taxpayers involved in the disclosure

5. Description of the document(s) disclosed

6. ADP source code (128 for Business Master File taxpayers)

7. Location of the IRS office retaining a copy of the documents disclosed

8. Type of documents disclosed (1 for tape extracts and 2 for all other disclosures)

(7) Managers can refer questions on accounting for disclosure to the LB&I’s disclosure technical advisor. If the disclosure technical advisor is not available, managers can contact the disclosure officer serving their functional area or state.

(1) A closing or exit conference takes place at the end of an audit, following receipt of the discussion draft report (TIGTA) or the statement of facts (GAO). The closing meeting takes place at the request of the TIGTA audit team or the LB&I managers responsible for the audit. The purpose of the meeting is to discuss managers’ comments or reactions to the discussion draft or statement of facts before the draft report is issued. The executive lead stakeholder, or a representative, should participate at the closing conference. If possible, the LB&I manager should seek concurrence from the audit team on proposed revisions to the discussion draft report or statement of facts and request a revised audit report before the audit team issues the draft report.

(2) The audit liaison should:

1. Email the statement of facts, discussion draft report, or draft report to appropriate functional coordinator and cross-BOD audit liaisons (if appropriate) for distribution to their pertinent director, executive assistant and program manager.

2. Request stakeholder review and provide written comments on the audit report by a specific due date before the internal closing conference.

3. Schedule the internal closing conference call and coordinate the meeting with appropriate stakeholders within and outside LB&I.

4. Coordinate the closing meeting with the TIGTA or GAO audit team, appropriate LB&I stakeholders, and cross-BOD stakeholders (outside LB&I) to schedule the external closing conference call.

5. Ensure appropriate executives attend the closing conference to provide an opportunity to address their concerns with the audit findings and recommendations.

6. Include EAM and Legislative Affairs in the invitations to all milestone conferences.

7. Facilitate the closing conference.

(3) The executive owner(s) of the audit and pertinent program manager(s) responsible for the audit should thoroughly review the discussion draft report or statement of facts to ensure the report reflects:

1. Adequate understanding of the program audited.

2. Accurate, relevant, and current facts.

3. Perspective on the extent and significance of negative findings reported.

4. Sufficient evidence to support the findings and recommendations.

5. Balanced tone, especially on titles and headings.

6. Connection between audit objectives, audit findings, and conclusions.

7. Conclusions and recommendations based on the facts presented.

(4) Although the IRS does not need to issue a formal response to the discussion draft report or statement of facts, this is the time to raise concerns and consider the feasibility of adopting the audit recommendations, if the report has recommendations.

(5) Managers should take advantage of this opportunity to discuss any concerns or inaccuracies with the audit report. When concerns or inaccuracies exist in a discussion draft report or statement of facts, the lead stakeholder function should coordinate with pertinent managers within and outside LB&I, as needed, to prepare comments.

(6) All stakeholders should provide written comments, or a negative response, to the LB&I functional coordinator with a copy to the audit liaison before the internal closing conference.

(7) The functional coordinator will consolidate all comments and forward them to the audit liaison. The audit liaison will share the consolidated comments with all stakeholders via an update to the invitation to drive the internal closing conference discussion.

(8) The functional coordinator will update the consolidated comments to reflect changes /updates from the internal meeting and forward the revised comments to the audit liaison. The audit liaison will provide the final consolidated comments to the stakeholders and the audit team by updating the external closing invitation.

(9) The comments should be delivered to the audit team no later than 48 hours before the closing conference to allow enough time to receive TIGTA’s responses in writing. By providing written comments, managers ensure they address all their concerns with the report, provide the auditors specific language for revisions, and clarify any misunderstandings during the meeting. Written comments reduce the time spent taking meeting notes and help focus the closing meeting discussions on the most critical issues. However, TIGTA and GAO do not have to provide a written response to the IRS’s comments.

(1) The lead stakeholder practice area is responsible for drafting the management response. TPS is responsible for coordinating the review and approval of the signature package.

(2) Management responses to TIGTA draft reports are usually due in 30 calendar days.

(3) In cases where it is the lead stakeholder, LB&I is responsible for coordinating review within LB&I and with the Deputy Commissioner of Services and Enforcement (DCSE). LB&I audit liaison also submits the management response directly to TIGTA.

(4) Operating division commissioners are responsible for signing management responses to TIGTA draft audit reports.

(5) When the TIGTA audit affects more than one division or has the potential to have a significant impact on the IRS, signatures of all impacted BODs must be obtained.

(6) The lead executive assigned responsibility for preparing the management response to the draft report will obtain the signatures of the other impacted BODs using a Form 14074, Action Routing Sheet.

(7) The LB&I managers responsible for drafting the response to the draft audit report should:

1. Coordinate with functional areas within and outside LB&I, as needed, when drafting the management response.

2. Consolidate and review comments gathered for the management response.

3. Draft the response using the response template prepared and provided by the audit liaison and follow the writing guidelines provided.

4. Forward the draft response to the audit liaison by the due date provided in the response timetable.

(8) A draft management response should include the following:

1. A positive tone.

2. Introductory paragraph acknowledging the report. (A "thank you" statement is not necessary as an introduction.)

3. Agency message or LB&I "story" (one or two paragraphs) addressing the issue(s) covered in the report and presenting a positive picture of what LB&I has generally done to address the significant issues(s).

4. An attachment outlining the corrective action plan for each recommendation identifying responsible officials and the estimated implementation date for each action.

5. A statement of agreement or disagreement is not necessary in the response.

6. Include a statement indicating agreement or disagreement for all monetary benefits reported, if any, in the body of the memo.

(9) Corrective actions consist of specific actions planned to address audit recommendations, including estimated dates for implementation. When preparing responses, managers should examine the findings and recommendations in the draft report to ensure they have addressed the audit issues in their responses. Managers must determine whether to adopt or reject the recommendations. They should consider the following factors before committing to corrective actions:

1. Legislative mandate – Must LB&I implement the recommendations based on compliance with an existing law, rule, or regulation? If so, managers should adopt the recommendations.

2. Duplication – Is LB&I already doing what the audit team recommends? If so, a new corrective action is not needed. Managers should provide information on what has been done or is in the process of being done to address the recommendations and the source of duplication (e.g., Federal Managers' Financial Integrity Act (FMFIA) Action Plan).

3. Modernization plans – Are recommendations part of a current modernization effort? If so, managers do not have to provide new corrective actions. Instead, managers should provide information on the specific modernization plans addressing the recommendations.

4. Cost/benefit factors – Are the resources available to implement the recommendations? Do they make good business sense? If not, managers should let auditors know why the recommendations are not cost effective or why they do not make good business sense.

(10) Managers should assign realistic time frames for implementing planned corrective actions and allocate the necessary resources to meet the time frames. Assigning an implementation date to a planned corrective action without considering the resources needed to implement it will result in possibly having to extend of the due date or cancellation of corrective actions, which reflects poor planning. Generally, LB&I avoids completion dates in September, December, and January due to fiscal year-end responsibilities and use-or-lose annual leave.

(11) The audit liaison reviews the draft response to ensure that managers:

1. Vetted the draft response with the executive owner for the audit (e.g., director) and other managers involved in the development of the response within and outside of LB&I before submitting the draft response to the audit liaison.

2. Used the proper response format or template the audit liaison provided.

3. Addressed findings and recommendations in the draft report.

4. Provided an estimated implementation date or completed date for each corrective action (for TIGTA draft reports).

5. Listed a responsible official for each corrective action (for TIGTA draft reports).

6. Followed the recommended writing guidelines.

7. Addressed the outcome measures in the draft report (TIGTA), if any.

(12) The audit liaison should:

1. Ask managers to provide any missing information and edit the draft response.

2. Request an extension of the response due date from the TIGTA or GAO audit team, if needed.

3. Follow service guidelines for the proper review by PBS and LB&I officials.

4. Forward the signature package, including the final draft response electronically to the ALL team manager for routing to PBS, LB&I commissioner, and DCSE Offices.

(13) The TIGTA signature package will be routed as follows:

1. LB&I lead stakeholder to audit liaison (PBS)

2. Audit liaison to PBS senior management and EAM

3. PBS to LB&I commissioner

4. LB&I commissioner to DCSE

5. DCSE back to LB&I commissioner

6. LB&I commissioner to audit liaison

7. Audit liaison to TIGTA by 5:00 p.m. (EST) on the requested response date

(14) The response to GAO draft report is general in nature. GAO sets the response date for each audit (typically, the response time is 30 days, but it may be less). LB&I is responsible for coordinating review with LB&I stakeholders. EAM is responsible for coordinating review with the DCSE and submitting the response to the GAO.

(1) For TIGTA audits, the audit liaison should:

1. Forward a clear scanned copy of the signed response to the TIGTA mailbox by email.

2. Send a copy of the signed response to the TIGTA audit manager and the TIGTA senior auditor for the audit.

3. Share a copy of the signed response with EAM, pertinent managers and audit liaisons within and outside LB&I, as needed.

(1) The final report procedures for the GAO audits differ slightly from the TIGTA procedures because the statute requires that IRS respond to the Congress within 180 calendar days of the issuance of a GAO final report with recommendations (180-Day Letter). Legislative Affairs creates e-Trak controls to track the progress of the 180-Day Letter required for the GAO final reports.

(2) The 180-Day Letter format must comply with IRM 1.10.1, IRS Correspondence Manual. and should include information on actions taken or planned to address the audit recommendations. The management response and drafting process for the GAO final report (explained under IRM 11.51.1.2.5.1, Management Response to Draft Report) are very similar to the required response to the GAO draft report. However, the 180-Day Letter will provide specific corrective actions, due dates, responsible officials and action monitoring plans to address each audit recommendation.

(3) The audit liaison should:

1. Develop and forward a management response template and response timetable to pertinent LB&I functional coordinator and audit liaisons in other business units to facilitate the drafting of the 180-Day Letter.

2. Ensure that the e-Trak correspondence control system is updated to show the progress of the 180-day congressional response delivered to reviewers and finally signed.

3. Review the 180-Day Letter and coordinate any necessary changes with the pertinent program manager(s) and/or functions involved.

4. Share a preliminary copy with EAM and Legislative Affairs.

5. Prepare the signature package and forward the 180-Day Letter (the same letter is addressed to the House of Representatives and the Senate committees) for review and approval to ALL, TPS, PBS management and the LB&I commissioner.

6. Submit the 180-Day Letter package to Legislative Affairs for review at least five days before the management response is due.

(4) Legislative Affairs submits the package to the DCSE. Legislative Affairs retrieves the signature package and delivers the letter to the various congressional committees. The audit liaison gets a copy of the signed 180-Day Letter and the signature package from Legislative Affairs and shares with pertinent managers, and audit liaisons within and outside LB&I by email, as needed.