Treasury Inspector General Report Recommends Improvements to FATCA Registration System

The Treasury Inspector General for Tax Administration, J. Russell George, has released a report calling for improvements to be made to the Foreign Financial Institution Registration System ("FRS") that is being developed to register foreign financial institutions, increase annual enforcement revenue, and support the IRS' new overall information system under FATCA.

According to the report, the FRS is a major information technology investment for the IRS. The goal of the investigation was to determine whether the IRS' systems development approach for the FRS is sufficiently mitigating risks with the application of information technology management control for successful development and delivery requirements and capabilities to meet FATCA goals. The report found that the initial system that was being developed had to be abandoned in November 2012 when new regulations were issued and changes were made to the Intergovernmental Agreements. According to the report, while the IRS has taken steps to improve management controls for this major technological investment, additional improvements are needed to ensure consistent adherence to risk mitigation processes for program management, security control processes, testing documentation, and requirements management. TIGTA made six recommendations to the IRS for improved system development, documentation, management and testing. The IRS agreed with all six recommendations set forth in the report. A copy of TIGTA's report is linked below.

See: TIGTA Review.