Oversight

IRS employee credit cards vulnerable to fraud

Magnifying glass

The Internal Revenue Service has one more set of improprieties to address, as the Treasury Inspector General for Tax Administration reported in late June that IRS oversight for employee use of credit cards is insufficient, making the agency vulnerable for abuse.

In the report, TIGTA said the agency lacks a system to detect improper purchases that results in appropriate action, does not cancel cards before an employee leaves and does not have standards for what constitutes a split purchase between the agency and employees.

"The IRS does not have the controls in place to provide assurance that improper purchases do not occur and appropriate corrective action is taken," the report said. "Enhanced internal controls would provide greater assurance that IRS resources are being used more effectively and efficiently."

Among TIGTA recommendations was including in their guidelines that accounts be closed before employee departure, reducing pending transactions and defining what constitutes a split purchase. IRS management agreed with all 11 recommendations, saying they will implement all corrective actions. The agency said that it already has begun evaluating all referrals related to potential abuse, which was one of the recommendations.

"The majority of IRS cardholders appear to use their purchase cards properly," the report said. "However, TIGTA identified some instances of inappropriate use that include improper decorative and give-away items for managers' meetings and Combined Federal Campaign fundraising events."

About the Author

Reid Davenport is an FCW editorial fellow. Connect with him on Twitter: @ReidDavenport.

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Reader comments

Mon, Jul 8, 2013

Supposedly the IRS is supposed to be looking for financial (tax) fraud in others but apparently is unable to stop it within their own ranks. Before that we heard that they were wasting tax dollars on frivilous activities, and before that it was their political harrassment scandal. Since we have not seen people getting fired or prosecuted for their unethical and/or illegal actions, I doubt that we will see anything serious done about this latest issue either.

Mon, Jul 8, 2013

I was wondering what card was being talked about and the very last paragraph implies PURCHASE. But the article is not clear if it is the purchase or travel card (which some folks call a purchase card also) that is at issue.

The purchase card would make sense to make a fuss about since it is really a company credit card, however the employee TRAVEL card is in the employee's name and tied to his credit report, it is his credit hit if not paid (so says the fine print on mine), so what does it matter what is put on it? Only that it is paid off and the card company is happy.

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