IRS Unit Has More Cars than Agents and Fails to Ensure Cars Are Used for Official Business

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Posted by Michael Mirsky on Friday, July 23rd, 2021, 12:15 PM PERMALINK

If a regular American taxpayer failed to show proper documentation for vehicle use related to their tax return, they would be in civil and criminal trouble with the IRS. But a new Inspector General report shows that the IRS would not pass the same audit it subjects Americans to.

The IRS Criminal Investigation (IRS-CI) division fails to perform basic due diligence to ensure its vehicles are being used properly. And many agents are assigned individual vehicles even though they do not need one and are not qualified for one, according to a recent report by the Treasury Inspector General for Tax Administration (TIGTA).

The inspector general found "questionable and missing information reported by special agents for commutes and commuting miles."

How would the IRS react if you were under audit and gave them "questionable or missing information"?

The division also has more vehicles than it does agents, costing taxpayers millions in unnecessary expenses. These findings are alarming given that President Biden has proposed a massive expansion in the size and power of the IRS.

Key excerpts from the report are as follows:

Excerpt #1: 

"questionable reporting of commutes and commuting mileage brings into question CI’s maintenance of sufficiently detailed, accurate information and data to support day-to-day oversight of the fleet as well as its compliance with requirements under the Home-to-Work authorization."

Excerpt #2:

"Our analysis of the number of pool vehicles compared to CI’s utilization criteria found there were excess pool vehicles in the CI fleet inventory."

Excerpt #3:

"Our review of fleet usage information provided by CI found that its data were often inaccurate or incomplete."

Excerpt #4:

"Our analysis of CIMIS usage data from April 2017 through January 2020 found questionable data reported for individually assigned vehicle use. Specifically, we identified three special agents who reported between 95,000 and 242,000 total mission miles in a 12-month period. The mileage reported is significantly greater than the 7,200 mile utilization criteria used by the IRS’s Facilities Management and Securities Services Division."

Excerpt #5:

"We also identified questionable and missing information reported by special agents for commutes and commuting miles. Specifically, 125 special agents reported zero commutes or commuting miles in a 12-month period. The information reported by these 125 special agents would indicate that they did not drive their assigned fleet vehicle to or from their place of  employment during this period. As such, the information reported by these special agents does not support his or her need to have an individually assigned vehicle based on criteria and requirements associated with Home-to-Work authority, which is discussed further in this report."

Excerpt #6: 

"the Home-to-Work data provided included missing and questionable information."

Excerpt #7:

"Our review found that the information provided by CI fleet management during this review was inadequate to support proper fleet management."

Excerpt #8: 

"Based on the evidence and documentation provided by CI, there were 342 special agents who did not report any commutes during the three-year period shown above in Figure 4. If these agents’ individually assigned vehicles were transitioned into pool vehicles at a two-to-one ratio, CI could potentially have realized cost savings of more than $871,682."

Excerpt #9: 

"Our review of inventory reports and Home-to-Work reports provided by CI fleet management found that CI is unnecessarily retaining and paying for an excessive number of fleet vehicles."

Excerpt #10: 

"eliminating questionable positions from Home-to-Work authority could have provided cost savings of over $1,714,943 over the three 12-month time frames included in our analysis. Appropriate analysis, controls, and measurable use associated with vehicle utilization, including realistic estimates on new hires and employee attrition and evaluating the necessity for Home-to-Work authority for special agent positions that do not qualify, are needed to ensure that CI reduces excess vehicle inventory and reduces unnecessary costs when possible."

CI’s fleet manager is responsible for providing timely information reports on the status and utilization of the CI fleet to the U.S. Department of the Treasury Fleet Manager under the Assistant Secretary for Management. 

As of January 1, 2020, the CI fleet program included 2,221 vehicles compared to just 2,030 agents. Of these vehicles, 1,698 vehicles were assigned individually to special agents and 523 vehicles were assigned as “pool cars”, or vehicles assigned to one or more IRS offices. All CI special agents with field investigative responsibilities and a select number with protective service responsibilities are authorized for Home-to-Work transportation. The annual cost of CI’s vehicle fleet inventory is shown below.

Federal agencies are required to maintain logs and other records to establish the official purpose of their Home-to-Work programs. Special agents are required to log all daily use of the vehicle outside the normally scheduled tour of duty. Despite these mandates, the TIGTA report found the IRS agents routinely ignored protocol. 

The IRS does not meet the standards it demands of taxpayers.

"If a small business owner gets audited, the IRS demands to see a detailed 'contemporaneous log' of their business miles, organized just so. But IRS agents themselves have no problem using taxpayer-funded company cars with a far more lax standard," said tax expert Ryan Ellis, certified as an IRS Enrolled Agent and president of the Center for a Free Economy.

Incomplete or inaccurate data do not support an efficient fleet program

TIGTA’s analysis of Criminal Investigation Management Information System (CIMIS) usage data between April 2017 and January 2020 found questionable data reported for individually assigned vehicles. The investigation uncovered three special agents who reported between 95,000 and 242,000 total mission miles in a 12-month period. This number greatly exceeds the 7,200 mile utilization criteria used by the IRS’s Facilities Management and Securities Services Division. Furthermore, the number of mission miles reported by these three agents were well above the average mission miles reported by other CI special agents.

The report also found that 125 special agents reported zero commutes or commuting miles in a 12-month period. The information reported by these 125 special agents would indicate that they did not drive their assigned fleet vehicle to or from their place of employment during this period. As such, the information reported by these special agents does not support their need to have an individually assigned vehicle based on criteria and requirements associated with Home-to-Work authority.

IRS fails to ensure accuracy of reported mileage

IRS procedures indicate that the manual input of mileage and usage information for these vehicles is to be completed monthly by administrative support staff. The guidance explicitly states that responsibility for the accuracy of the database rests with each CI employee. 

The procedures clearly identify which CI employee is responsible to ensure the accuracy of the database, with special agents entering data into their diaries, and administrative support staff transcribing the information from the diaries into the CIMIS. This leads to CIMIS administrators not correcting errors when they are identified. 

CI fleet management indicated that supervisory special agents are not required to physically verify the ending mileage on Government-operated vehicles on a month‐to‐month basis, allowing issues to go unnoticed, such as excessive mileage reported by special agents.

CI fleet management often provided incomplete data

TIGTA requested copies of the vehicle use data that CI fleet management is required to maintain to ensure effective management and oversight of its fleet. Some information, such as vehicle inventory reports, internal Home-to-Work analyses, and monthly expense reports, was provided to the investigators, while other important information was not always complete or up to retention standards. 

The report found that the Home-to-Work data provided included missing and questionable information. In addition, several older mileage reports were not available. 

The investigators also found that Fleet management does not track consolidated data on the number of special agents whose authorizations were suspended, why they were suspended, or the number of reinstatements that had been processed. 

Problematic guidance led to inaccurate reporting practices

Through their investigation, TIGTA found that special agents were not provided clear guidance to accurately input commuting miles. The guidance instructed CI agents to record commuting data without specifying whether the commute was within their tour of duty. 

Because this information lacks important details, there is a risk that the account includes an insufficient record of vehicle use outside of the normally scheduled tour of duty hours as required. 

CI cannot justify its fleet program size

TIGTA’s review of CI fleet management inventory reports and Home-to-Work reports found that the unit is unnecessarily retaining and paying for an excessive number of fleet vehicles. CI’s vehicle utilization criteria allow for one vehicle per special agent in the field and one pool vehicle for each supervisory special agent’s staff. However, a review of mission miles reported by special agents found that the mission miles reported by hundreds of these special agents would not have met the minimum requirements.

A breakdown of mission miles for individually assigned vehicles can be found below. 

CI’s fleet inventory has an unnecessary number of pool vehicles

The report found that 58, 140, and 10 vehicles were added to pool inventory due to attrition in FYs 2017, 2018, and 2019, respectively. Despite the push for this increase in the size of the fleet, none of these vehicles were accessed during these time frames, effectively increasing the number of vehicles in CI’s pool fleet. A cost savings of $1,016,606 could have been realized over three years.

Due to poor management, the taxpayer-funded vehicle fleet is too large.

Not all positions in CI require an individually assigned vehicle

Back in 2011 CI reduced the number of individually assigned vehicles in certain positions. The division also reduced the positions qualifying for Home-to-Work authority. This led to 64 special agents and approximately 127 special agent positions being identified as no longer requiring Home-to-Work authorization. 

Despite their conclusion that these positions were unnecessary for individual vehicle assignment, CI bulletins indicate that these positions were added back into the Home-to-Work request in February 2014, which was subsequently approved by the Department of the Treasury.

All told, eliminating questionable positions from Home-to-Work authority could have provided cost savings of over $1,714,943 over the three 12-month time frames included in the analysis. The breakdown of those potential savings is shown in the table below. 

This latest audit of the IRS is more evidence of an agency-wide problem with basic competence and due diligence resulting in wasted taxpayer funds and poor execution of core duties.

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