GAO Gives "Eighth Annual Unqualified Opinion" for the IRS

An "unqualified opinion" on financial statements, despite its seeming connotation, is actually a good thing for the IRS. In auditor terms, an unqualified opinion means that based on substantive tests and analytical procedures, the company's financial reports represent accurately, in all material respects, the financial position of the company. So, essentially it's a good thing for the IRS. With that in mind, here is some food for thought:

The IRS is spending more money to make up for inefficiencies that keep getting worse:

"The IRS has had to put processes in place to make up for its "serious internal control and financial management systems deficiencies," the GAO notes, which subsequently cuts into the IRS's already crunched resources. The agency has continually been unable to maintain effective internal control over financial reporting or consistently comply with the laws and regulations that govern it to keep up-to-date financial systems, according to the GAO."


Not only is the IRS out of date, but also risking its citizen's information security:

"The GAO also reminded the IRS of its previous recommendations for improving the agency's internal controls. Of the 144 outstanding recommendations, nearly half of them relate to material weakness in information security one of the major quibbles GAO noted in last year's audit."


On top of that, the convenient inability to stay up to date, somehow generates more revenue for the IRS, sending those involved into a tizzy:

"The result has been frustration on the part of taxpayers, including businesses. For example, the IRS once gave a business a nearly $5 million penalty for not including a supporting schedule with its quarterly payroll tax return. Later, the IRS discovered that that information had actually been attached to the return."

Read the full article from CFO.com here