The Internal Revenue Service spent nearly $380 million to implement the Foreign Account Tax Compliance Act, but so far isn’t prepared to enforce the law, according to a new report.

The report, from the Treasury Inspector General for Tax Administration, examined the IRS’s efforts to implement FATCA, which was included as part of the HIRE Act of 2010. The law required foreign financial institutions, or FFIs, to report on the holdings of U.S. taxpayers to the IRS, or else face stiff penalties of up to 30 percent on their income from U.S. sources. The law required the Treasury Department to negotiate a series of intergovernmental agreements, or IGAs, with foreign tax authorities, under most of which the information is first submitted to the foreign tax authority, which in turn relays it to the IRS. The IRS had to set up an online portal that foreign banks and governments could use to submit the information, along with new forms and information returns and other systems.

Under FATCA, individual taxpayers with specified foreign financial assets that meet a certain dollar threshold also were required to report the information to the IRS, starting with tax year 2011, by filing Form 8938, Statement of Specified Foreign Financial Assets, with their income tax return.

To avoid being subject to withholding, the FATCA also requires foreign financial institutions to register and agree to report to the IRS information about the financial accounts held by U.S. taxpayers or held by foreign entities in which U.S. taxpayers hold a substantial ownership interest.

However, TIGTA found that, despite spending nearly $380 million, the IRS has taken limited or no action on a majority of the planned activities outlined in the original FATCA Compliance Roadmap.

The purpose of the roadmap is to document compliance planning involving FATCA data and to provide a baseline for future compliance planning and implementation activities across the IRS. In an earlier review of the IRS’s implementation of the FATCA, TIGTA reported that the IRS experienced delays in implementing its compliance strategy. It anticipated that some of the estimated implementation dates might change due to the availability and accessibility of FATCA data and budget limitations, such as information technology funding and human resources funding. During its most recent review, released Monday, TIGTA found that the IRS continues to experience delays in implementing its FATCA compliance strategy, even though, since the passage of the HIRE Act of 2010, the IRS has spent approximately $380 million to implement and administer the FATCA program.

Among the problems cited by TIGTA, the reports filed by the foreign financial institutions did not include Taxpayer Identification Numbers, or included invalid TINs. As a result, the IRS’s efforts to match FFI information with individual taxpayer data were unsuccessful, which affected the IRS’s ability to identify and enforce FATCA requirements for individual taxpayers.

On top of that, the IRS only recently took action to enforce withholding agent compliance with the FATCA after TIGTA provided feedback. TIGTA found that a significant percentage of the Forms 1042-S, Foreign Person’s U.S. Source Income Subject to Withholding received by the IRS pertaining to FATCA don’t have valid TINs. However, most Form 1099 series information returns relating to FATCA do have valid TINs and can be used by the IRS in its FATCA compliance strategies. There were 62,398 tax year 2015 Forms 1042-S with invalid TINs reporting more than $717 million, of which just over $47 million was withheld.

TIGTA recommended the IRS set up follow-up procedures and initiate action to address error notices related to file submissions rejected by the International Compliance Management Model. The IRS should also initiate compliance efforts to address taxpayers who didn’t file a Form 8938, but who were reported on a Form 8966 filed by a foreign financial institution, TIGTA suggested. The IRS should also add guidance to the Form 8938 instructions to tell taxpayers how to use the FFI List Search and Download Tool on the IRS’s website, the report recommended. In addition, the IRS should initiate compliance efforts to address and correct missing or invalid TINs on Form 8966 filings by non-IGA FFIs and Model 2 IGA FFIs, according to TIGTA, as well as expand its compliance efforts to address and correct the invalid TINs on all Form 1042-S filings by non-IGA FFIs and Model 2 IGA FFIs. The IRS should also initiate compliance efforts to compare Form 1099 filings with valid TINs to corresponding Form 8938 filings, TIGTA suggested.

The IRS agreed with four of TIGTA’s six recommendations. Its corrective actions include establishing follow-up procedures and initiating action on error notices with the FFIs; continuing efforts to systemically match Form 8966 and Form 8938 data to identify nonfilers and underreporting related to U.S. holders of foreign accounts and to the FFIs; informing taxpayers how to obtain global intermediary numbers; and strengthening overall compliance efforts directed toward improving the accuracy of reporting by Form 1042-S filers.

However, an IRS official disputed some of the report’s findings and took issue with the report’s focus on the initial FATCA Compliance Roadmap, insisting that the IRS is actually enforcing the law. “We agree with the importance of the enforcement efforts highlighted in the report,” wrote Douglas W. O’Donnell, commissioner of the IRS’s Large Business and International Division, in response to the report. “However, the narrow focus of the report should not be used to draw conclusions about the entirety of the IRS’s enforcement efforts in this area. The report focuses on an early internal planning document, the roadmap, which was intended to be a comprehensive compliance plan and was superseded by campaign planning and other task specific documents that more timely address changing circumstances. The roadmap could not envision future policy changes such as the extension of the initial phase-in period for taxpayer identification number reporting that was part of the original legal framework contained in the intergovernmental agreements. The report also omits discussion of the global transformation in exchange of financial account information because of the IRS’s effort to implement FATCA. The report leaves the reader with the incorrect impression that FATCA is not being enforced.”