"Processing controls do not ensure the accuracy of medical device excise tax figures reported," TIGTA said in its report.

Further, it reported, there was uncertainty about the size and composition of the industry itself, which made collections difficult. Another complication: The IRS erroneously assessed medical device makers during a tax-free grace period, and had to refund more than $700,000, as well as write letters of apology to those dinged improperly.

To address this range of problems with the new tax, TIGTA offered two major recommendations.

1. "The IRS continues refining its compliance strategy to include actions that can be taken to identify noncompliant manufacturers."

2. "The IRS conduct a review of the 276 tax returns TIGTA identified to determine the proper excise tax owed, establish a process to verify the accuracy of the medical device excise tax amount for paper-filed Forms 720, and initiate a process to correspond with taxpayers to obtain missing taxable sales or tax amounts."

TIGA reported the IRS "agreed with our recommendations and plans to consider alternative strategies for identifying noncompliant manufacturers, identify programming changes needed to improve the math verification for paper-filed Forms 720, and implement procedures for corresponding with taxpayers if the changes can be accomplished within budgetary constraints."

Meantime, according to The Hill, Congressional Republicans are jumping on the shortfall and the flawed process, calling for a repeal of the medical device tax. This proposed repeal could be part of a GOP-sponsored tax package being prepped for consideration later this year.