Summary: The Internal Revenue Service's (IRS) controls over receipts and taxpayer data do not adequately reduce the vulnerability of the federal government and taxpayers to loss from theft. For example, employees were hired and worked in jobs requiring the handling of cash, checks, or sensitive taxpayer information before IRS received the results of these employees' required background and fingerprint checks. Of the 80 thefts IRS investigated at service centers from January 1995 to July 1997, 12 (15 percent) were committed by persons who had previous arrest records or convictions that were not identified prior to their employment and thus may have influenced IRS' decision to hire these persons. GAO also found weaknesses in the physical controls over service center and district office receipts. For example, at one service center receipts and returns were stored in an uncontrolled hallway that individuals can enter unchallenged from an adjoining fitness center. GAO also found that single, unarmed couriers in ordinary civilian vehicles took IRS deposits totaling hundreds of millions of dollars to banks during the peak filing season. In fact, one courier left a deposit totaling more than $200 million unattended in an open vehicle while he returned to the service center. At one district office, IRS used a bicycle messenger to deliver daily deposits ranging as high as $100 million.
