A report from the Treasury Inspector General for Tax Administration (TIGTA) claims the IRS was overbilled for work on its new communications portal. The portal is the key component in the IRS’ electronic tax return filing system.
According to the report, TIGTA audited three months of invoices submitted by private contractors. During that time period, the audit found 161 instances when invoices were submitted for work done outside the billing period. The audit found several instances where individual contractors claimed to have worked more than 240 hours in a single month. Worse, the audit found the IRS didn’t properly review invoices and obtain documentation prior to payment.
For its part, the IRS agreed to better review future invoices but denied it was overcharged. IRS Chief Technology Officer Terrence Milholland said in a formal response to the audit, “We strongly emphasize that the IRS did not pay for services that were not received and can confidently state that the Service was not overcharged for labor costs on any of the invoices analyzed. We regularly perform detailed reviews of invoices and seek clarification from the contractor to explain any inconsistencies.”
Although every federal agency has an inspector general, TIGTA is one of the more vocal agency watchdogs. In recent years, IRS has frequently disagreed with its overseers and has been quite public in doing so.
A report carried today in Accounting Today says the IRS took the unusual step of going to the media to air its disagreement with TIGTA. In a letter to Accounting Today, an IRS spokesperson said, “While TIGTA recognizes the value of the system, we are very concerned that this report does not provide a full picture of our program and our proper oversight. We disagree with the findings in several areas.”
We aren’t sure where the truth lies but we know TIGTA has been vigilant in its oversight of the IRS. Unfortunately no inspector general or agency watchdog can prevent and stop all fraud. Whistleblowers remain the best defense against fraud and overbilling in government contracts.
Under the federal False Claims Act, a whistleblower can receive up to 30% of whatever the government collects from wrongdoers. With triple damages and penalties of up to $11,000 for each false invoice, potential whistleblower awards can be huge. Two of our clients have received awards of approximately $50 million each.
To qualify as a whistleblower, one must have inside, original source information about overbilling the government or some other type fraud involving a government program or agency.
For more information, contact attorney Brian Mahany at or by telephone at (414) 704-6731 (direct). All inquiries protected by the attorney – client privilege.
MahanyLaw – America’s Whistleblower Lawyers.