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GAO Report Identifies ‘Deficiencies’ in IRS Financial System Management Strategy

financial reportingGovernment Accountability Office reports the Internal Revenue Service has “continuing and new deficiencies” in IRS’ internal control of its financial reporting systems.

GAO said Thursday it examined financial statements filed by IRS for fiscal years 2014 and 2015 and found that the systems cannot differentiate taxes receivable, writeoffs and compliance assessments.

The issue cost IRS more than $9 billion in 2015 fiscal year-end tax receivable balance adjustments, the report states.

The report also found problems with IRS’ approach to managing information security updates, audit trails and passwords for its financial reporting infrastructure.

IRS also faces challenges in the agency’s programs to safeguard hard-copy taxpayer receipts, monitor tax refund fraud and implement tax provisions under the Patient Protection and Affordable Care Act, according to the report.

The agency vowed to develop strategies to improve management of financial systems and data security.

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