What GAO Found
In GAO’s opinion, the Internal Revenue Service’s (IRS) fiscal years 2018 and 2017 financial statements are fairly presented in all material respects, and although controls could be improved, IRS maintained, in all material respects, effective internal control over financial reporting as of September 30, 2018. GAO’s tests of IRS’s compliance with selected provisions of applicable laws, regulations, contracts, and grant agreements detected no reportable instances of noncompliance in fiscal year 2018.
During fiscal year 2018, IRS continued to make important progress in addressing a long-standing material weakness in internal control over unpaid assessments. These efforts included enhancing data quality and improving controls over the complex statistical process that IRS uses to estimate the amounts of taxes receivable, compliance assessments, and write-offs for financial reporting purposes. Based on the cumulative effects of these and other efforts, GAO no longer considers the remaining deficiencies to represent a material weakness. However, the remaining control deficiencies collectively are significant enough to merit attention by…
