Army Commercial Vendor Services Offices in Iraq Noncompliant with Internal Revenue Service Reporting Requirements
Abstract
We determined whether Army Commercial Vendor Services (CVS) in Iraq complied with Federal tax reporting requirements for payments made to contractors supporting operations in Southwest Asia. Our audit focused on 15,093 service-related entitled payments (payments) totaling $1.28 billion that Army CVS offices in Iraq processed through the Computerized Accounts Payable System-Clipper (CAPS-C) from January 1, 2006, through December 31, 2008. What We Found Of 14,699 payments, Army CVS personnel incorrectly coded domestic contractors as foreign in CAPS-C for an estimated 316 payments totaling an estimated $351.92 million, and may have incorrectly coded domestic contractors as foreign in CAPS-C for an estimated 5,054 payments totaling an estimated $248.66 million. This occurred because Defense Finance and Accounting Service (DFAS) and Army financial management officials did not establish standard operating procedures (SOPs) for coding contractor domain status. In addition, Army financial management officials did not adequately train Army CVS personnel to code contractor domain status. As a result, Army CVS personnel did not take action to file Federal information returns with the IRS for an estimated $351.92 million of incorrectly coded contractor payments and an estimated $248.66 million of potentially incorrectly coded contractor payments.
Document Details
- Document Type
- Technical Report
- Publication Date
- Apr 08, 2011
- Accession Number
- ADA545902
Entities
Organizations
- Office of the Inspector General, U.S. Department of Defense