TIGTA: IRS Background Checks Generally Effective, But Uneven in Places

Chris Gaetano
Published Date:
Nov 26, 2019

The Treasury Inspector General for Tax Administration (TIGTA) has issued a report saying that IRS vetting of tax preparers has been effective overall, but procedures are inconsistent from program to program. 

Tax professionals working with the IRS need to undergo a "suitability check" to become e-file providers, acceptance agents or enrolled agents. This check examines factors such as criminal background, tax compliance, citizenship and professional licensing to score applicants on the risk level they present; A or B-level applicants are permitted to participate in the program, while those with a C-level or below are denied. 

TIGTA said that the IRS suitability check program is working well overall. After reviewing a statistical sample of 163 individuals approved to participate in the Acceptance Agent, Enrolled Agent, or e-File Provider Programs during 2018, TIGTA "found that none of the individuals engaged in criminal activity that warranted removal from the program," although five were found not to be in tax compliance. However, TIGTA also said that "the comprehensiveness of the initial and continuous suitability checks that the IRS performs varies depending on the specific program to which an individual applies." The IRS said this was because different programs cover different matters and so therefore have different vetting procedures, but TIGTA said that each program poses similar and significant risks to tax administration, and so everyone should have the same comprehensive suitability checks. 

Similarly, TIGTA noted that the requirements vary from program to program as well. For instance, criminal background checks are required for licensed e-file providers, but not for licensed acceptance agents. This is because each of the programs are under different authorities with different sets of regulations. 

The report recommended that the IRS harmonize its adjudication procedures among programs to reduce inconsistencies, to which the agency agreed, saying that it began doing so on Oct. 1 2019. The IRS will also review adjudication criteria to ensure crime categories are consistent for all three programs.  

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