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Auditors say IRS loses too much law enforcement equipment
AP Tax Writer

WASHINGTON- Treasury inspectors who went looking for equipment used by the law enforcement arm of the IRS couldn't find 10 percent of a random sample of the division's radio, video and communications devices

The inspectors for tax administration looked for 700 pieces of equipment, including firearms, used by criminal investigators at the Internal Revenue Service.

They found the firearms but couldn't locate 70 other items, according to a report by Inspector General J. Russell George. The missing equipment, from video and photography gear and portable radios to fax machines, had been purchased for more than $240,000.

Auditors also discovered that IRS criminal investigators were prepared to write off more than $1.3 million in equipment as lost in 2004 and 2005.

"Unless (the department's) management takes action to improve the controls and procedures over this equipment, they will continue to be at risk of losing control of more investigative equipment," George concluded in the report.

Nancy Jardini, chief of IRS Criminal Investigation, in a letter to the auditors agreed to implement the recommended changes and agreed the agency must do a better job of tracking its equipment.

However, she also said that the 70 items that investigators couldn't locate were not necessarily lost, and that the $240,000 price tag inflates the value of older equipment.

IRS criminal investigators pursue tax, money laundering and bank secrecy crimes. The department has 40,000 pieces of equipment purchased for approximately $128 million.

The auditors, who provide independent oversight of IRS operations, said lost investigative equipment like radios could compromise ongoing investigations.

Investigators also raised alarms about missing identification badges, known as pocket commissions, questioning whether they could be used in ways that damage IRS credibility or national security.

"In this day and age of identity theft, we believe there is a risk associated with the inability to account for the location of even one pocket commission," George said.

Jardini said the division tracked down virtually all of the missing identification and none was misused.

"Criminal Investigation is confident that the enforcement credentials missing from the ... system do not present a substantial risk to the agency or the country," she wrote.

She said IRS encryption controls would prevent any lost equipment from jeopardizing an investigation.

Auditors also said the department could do a better job of ensuring that combinations for firearm storage safes are changed more regularly.
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