January 24, 2022

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FY 2020 Excise Tax: Agreed-Upon Procedures Related to Distributions to Trust Funds

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<div>The procedures that GAO agreed to perform on fiscal year 2020 net excise tax distributions to the Airport and Airway Trust Fund (AATF) and the Highway Trust Fund (HTF) and the results of those procedures are described in the enclosures to this report. The sufficiency of these procedures is solely the responsibility of the Department of Transportation (DOT) Office of Inspector General (OIG). The Internal Revenue Service (IRS) is responsible for certifying quarterly net excise tax collections to be distributed to the AATF and the HTF. The Department of the Treasury's Office of Tax Analysis (OTA) is responsible for developing reasonable estimates of net excise tax collections to be distributed to the AATF and the HTF. These IRS certifications and OTA estimates are the basis of the net excise tax distributions to the AATF and the HTF. GAO was not engaged to perform, and did not perform, an examination or review. Accordingly, GAO does not express such an opinion or conclusion. The purpose of this report is solely to describe agreed-upon procedures related to information representing the basis of amounts distributed from the general fund to the AATF and the HTF during fiscal year 2020, and the report is not suitable for any other purpose. IRS agreed with the findings related to the procedures performed concerning excise tax distributions to the AATF and the HTF during the fiscal year 2020. OTA stated that it had no comments on the report. GAO performed agreed-upon procedures solely to assist the DOT OIG in ascertaining whether the net excise tax revenue distributed to the AATF and the HTF for the fiscal year ended September 30, 2020, is supported by information from the Department of the Treasury, including IRS's excise tax receipt certifications and OTA's estimates. DOT OIG is responsible for the sufficiency of these agreed-upon procedures to meet its objectives, and GAO makes no representation in that respect. The procedures that GAO agreed to perform were related to information representing the basis of amounts distributed from the General Fund to the AATF and the HTF during fiscal year 2020, including (1) IRS's quarterly AATF and HTF excise tax certifications prepared during fiscal year 2020 and (2) OTA's estimates of excise tax amounts to be distributed to the AATF and the HTF for the third and fourth quarters of fiscal year 2020. For more information, contact Cheryl E. Clark at (202) 512-3406 or clarkce@gao.gov.</div>

Agreed-Upon Procedures Related to Distributions to Trust Funds

GAO-21-163R: Published: Nov 6, 2020. Publicly Released: Nov 6, 2020.

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The Airport and Airway and the Highway Trust Funds are the main funding sources for federal aviation and ground transportation programs. User taxes on airline tickets, aviation fuel, tires, and gasoline are their primary source of funding. The IRS is responsible for collecting those taxes and certifying the amounts distributed to the trust funds.

We performed certain procedures that the Department of Transportation Office of Inspector General requested on the tax revenue IRS collected and certified to the trust funds to assist the OIG in auditing DOT’s financial statements. We make no overall conclusion on the results of those procedures.

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  • Full Report:

Contact:

What GAO Found

The procedures that GAO agreed to perform on fiscal year 2020 net excise tax distributions to the Airport and Airway Trust Fund (AATF) and the Highway Trust Fund (HTF) and the results of those procedures are described in the enclosures to this report. The sufficiency of these procedures is solely the responsibility of the Department of Transportation (DOT) Office of Inspector General (OIG). The Internal Revenue Service (IRS) is responsible for certifying quarterly net excise tax collections to be distributed to the AATF and the HTF. The Department of the Treasury’s Office of Tax Analysis (OTA) is responsible for developing reasonable estimates of net excise tax collections to be distributed to the AATF and the HTF. These IRS certifications and OTA estimates are the basis of the net excise tax distributions to the AATF and the HTF. GAO was not engaged to perform, and did not perform, an examination or review. Accordingly, GAO does not express such an opinion or conclusion. The purpose of this report is solely to describe agreed-upon procedures related to information representing the basis of amounts distributed from the general fund to the AATF and the HTF during fiscal year 2020, and the report is not suitable for any other purpose. IRS agreed with the findings related to the procedures performed concerning excise tax distributions to the AATF and the HTF during the fiscal year 2020. OTA stated that it had no comments on the report.

Why GAO Did This Study

GAO performed agreed-upon procedures solely to assist the DOT OIG in ascertaining whether the net excise tax revenue distributed to the AATF and the HTF for the fiscal year ended September 30, 2020, is supported by information from the Department of the Treasury, including IRS’s excise tax receipt certifications and OTA’s estimates. DOT OIG is responsible for the sufficiency of these agreed-upon procedures to meet its objectives, and GAO makes no representation in that respect. The procedures that GAO agreed to perform were related to information representing the basis of amounts distributed from the General Fund to the AATF and the HTF during fiscal year 2020, including (1) IRS’s quarterly AATF and HTF excise tax certifications prepared during fiscal year 2020 and (2) OTA’s estimates of excise tax amounts to be distributed to the AATF and the HTF for the third and fourth quarters of fiscal year 2020.

For more information, contact Cheryl E. Clark at (202) 512-3406 or clarkce@gao.gov.

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