Letter Report:Chief Counsel Properly AdministeredFees Paid for InternalRevenue Service GuidanceNovember 2000Reference Number: 2001-10-011
This report has cleared the Treasury Inspector General for Tax Administration disclosurereview process and information determined to be restricted from public release has beenredacted from this document.
DEPARTMENT OF THE TREASURY
WASHINGTON, D.C. 20220
INSPECTOR GENERALfor TAXADMINISTRATION
November 9, 2000MEMORANDUM FOR CHIEF COUNSELFROM:Pamela J. GardinerDeputy Inspector General for AuditSUBJECT:Final Letter Report – Chief Counsel Properly Administered FeesPaid for Internal Revenue Service GuidanceThis report presents the results of our review of Chief Counsel’s administration of userfees. In summary, we found that Chief Counsel’s employees generally ensured that theproper fees were received and that refunds were properly approved, necessary, andsupported. We did note, however, that user fee payments were not always timelyendorsed and deposited. We recommended that Chief Counsel establish procedures toensure cases are screened daily to allow for timely deposits.Chief Counsel agreed with the recommendation in this report. Management’scomments have been incorporated into the report where appropriate, and the full text oftheir comments is included as an appendix.Copies of this report are also being sent to the Internal Revenue Service managers whoare affected by the report recommendation. Please contact me at (202) 622-6510 if youhave questions, or your staff may call Maurice S. Moody, Associate Inspector Generalfor Audit (Headquarters Operations and Exempt Organizations Programs), at(202) 622-8500.
Letter Report: Chief Counsel Properly Administered Fees Paid forInternal Revenue Service Guidance
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Objective and Scope
The objective of this audit was to determine whetherChief Counsel properly administered the user feesreceived, collected the proper fees, and refunded feeswhen appropriate.To accomplish this, we obtained a computer extractof user fees received and user fees refunded duringFiscal Year (FY) 1999. During FY 1999, Chief Counselreceived 7,798 fees for about $9.5 million and refunded1,031 fees for about $1 million. We discussed andobserved procedures for processing deposits and issuingrefunds. We selected 6 different judgmental samplestotaling 120 cases to determine whether user fees wereproperly controlled, the correct fees were received, andrefunds were proper. See Appendix I for a detaileddescription of how the samples were selected.This audit was performed in accordance with
Government Auditing Standards
between February andJuly 2000. We conducted our audit in the Office of theChief Counsel in Washington, D.C.Major contributors to this report are listed inAppendix II. The Report Distribution List is presentedin Appendix III.
Background
The Revenue Act of 1987
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provided that the Secretary of the Treasury or his delegate establish a programrequiring the payment of user fees for requests to theInternal Revenue Service (IRS) for rulings, opinionletters, determination letters, and similar requests. Thefees vary according to the categories or subcategoryestablished by the Secretary and after taking intoaccount the average time for, and difficulty of,
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Pub. L. No. 100-203, 101 Stat. 1330-446.
Our objective was todetermine whether Chief Counsel properlyadministered the user feesreceived, collected the proper fees, and refunded fees whenappropriate.
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