There Were No Administrative or Civil Actions With Respect
to Violations of Fair Tax Collection Practices in Calendar Year 2004
March 2005
Reference Number: 2005-10-051
This report has cleared the Treasury
Inspector General for Tax Administration disclosure review process and
information determined to be restricted from public release has been redacted
from this document.
March
15, 2005
MEMORANDUM FOR
DEPUTY COMMISSIONER FOR OPERATIONS SUPPORT
FROM: Pamela J. Gardiner /s/ Pamela J. Gardiner
Deputy Inspector General for Audit
SUBJECT: Final Audit Report - There Were No Administrative or Civil Actions With Respect to
Violations of Fair Tax Collection Practices in Calendar Year 2004
(Audit # 200410040)
This
report presents the results of our review of violations of fair tax collection
practices. The overall objective of this
review was to obtain information on any Internal Revenue Service (IRS)
administrative or civil actions resulting from Fair Tax Collection Practices violations
by IRS employees. Section (§) 1102 (d)(1)(G)
of the IRS Restructuring and Reform Act of 1998 requires the Treasury Inspector
General for Tax Administration to include in one of its semiannual reports to
the Congress information regarding any administrative or civil actions related
to the violations of the fair debt collection provisions of 26 U.S.C. § 6304.
In
summary, our review of the 32 cases closed during the period January 1 through December
31, 2004, that were coded as potential Fair Debt Collection Practices Act
violations did not identify any administrative or civil actions with respect to
violations of Fair Tax Collection Practices.
Further, there were no civil actions that resulted in the IRS paying
monetary settlements to taxpayers because of a Fair Tax Collection Practices
violation.
Management’s Response: IRS
management agreed with the findings in our draft audit report. Management’s complete response to the draft
report is included as Appendix V.
Copies of this report are also being sent to the IRS
managers affected by the report findings.
Please contact me at (202) 622-6510 if you have questions or Daniel R.
Devlin, Assistant Inspector General for Audit (Headquarters Operations and
Exempt
Organizations Programs), at (202) 622-8500.
There
Were No Administrative Actions With Respect to Violations of Fair Tax Collection
Practices
Appendix
I – Detailed Objective, Scope, and Methodology
Appendix II
– Major Contributors to This Report
Appendix
III – Report Distribution List
Appendix IV – Fair
Tax Collection Practices Provisions
Appendix V – Management’s Response to the Draft Report
Section (§) 1102 (d)(1)(G) of the Internal Revenue Service (IRS) Restructuring and Reform Act of 1998 (RRA 98) requires the Treasury Inspector General for Tax Administration (TIGTA) to include in one of its semiannual reports to the Congress information regarding any administrative or civil actions related to violations of the fair debt collection provisions of 26 U.S.C. § 6304, Fair Tax Collection Practices. The IRS has traditionally referred to the 26 U.S.C. § 6304 violations as “Fair Debt Collection Practices Act” (FDCPA) violations. The TIGTA semiannual report must provide a summary of such actions and include any judgments or awards granted.
The law itself does not provide an explanation of what is meant by “administrative actions.” We used the IRS’ definition when determining the number of FDCPA violations to be reported under RRA 98 § 1102 (d)(1)(G). The IRS’ definition of administrative actions includes disciplinary actions ranging from admonishment through removal. Lesser actions, such as oral or written counseling, are not considered administrative actions.
As originally enacted, the FDCPA included provisions that restricted various collection abuses and harassment in the private sector. These restrictions did not apply to Federal Government practices. However, the Congress believed it was appropriate to require the IRS to comply with applicable portions of the FDCPA and to be at least as considerate to taxpayers as private creditors are required to be with their customers (see Appendix IV for a detailed description of the FDCPA provisions). As such, RRA 98 § 3466(a) required the IRS to follow Fair Tax Collection Practices in line with the FDCPA.
Taxpayer complaints about IRS employees’ conduct can be reported to several IRS functions for tracking on IRS management information systems. If a taxpayer files a civil action or if IRS management determines that the taxpayer’s rights related to Fair Tax Collection Practices were potentially violated, the complaint could be referred and then tracked on one or both of the following IRS systems:
· Office of Workforce Relations’ Automated Labor and Employee Relations Tracking System (ALERTS), which generally tracks employee behavior that may warrant IRS management administrative actions.
· Office of Chief Counsel’s Counsel Automated System Environment (CASE), which is an inventory control system that tracks items such as taxpayer civil actions or bankruptcies.
The IRS began tracking FDCPA codes on the ALERTS in March 1999 and on the CASE in June 1999.
For the Calendar Year 2004 review, we analyzed closed cases from the ALERTS and the CASE to identify violations of Fair Tax Collection Practices. However, we could not ensure the cases recorded on the ALERTS and the CASE constitute all Fair Tax Collection Practices violations. Furthermore, the scope of our audit was not intended to determine the accuracy or consistency of disciplinary actions taken against employees for Fair Tax Collection Practices violations that were not reported to the Office of Workforce Relations.
This review was performed at the Chief Human Capital and
Chief Counsel Offices in the IRS National Headquarters in
There were 32 cases coded as FDCPA complaints closed on the
ALERTS during the period January 1 through December 31, 2004.
However, only 18 of the cases were related to collection practices—the
other cases were either miscoded (13 cases) or duplicate (1 case). None of the 18 cases involved administrative actions
with respect to violations of Fair Tax Collection Practices. The disposition of the 18 cases included
admonishment for failure to follow established guidelines, written counseling,
retirement or other separation from the IRS, withdrawal of the allegation,
clearance of any wrongdoing, and closure without further action.
Oral or written counseling is not considered an administrative action under the IRS’ definition. Since the IRS does not routinely track all informal oral counseling or minor actions against its employees, it is not possible to determine how often, and for what reasons, informal oral counseling or other minor disciplinary actions occurred.
Appendix I
Detailed Objective,
Scope, and Methodology
The
objective of this review was to obtain information on any Internal Revenue
Service (IRS) administrative or civil actions resulting from Fair Tax Collection
Practices violations by IRS employees. Specifically,
we:
I.
Determined
the number of Fair Tax Collection Practices violations resulting in administrative actions.
A.. Obtained
a computer extract from the Automated Labor and Employee Relations Tracking
System (ALERTS) of the 32 cases that were opened after July 22, 1998, and
closed during the period January 1 through December 31, 2004, as Fair Debt
Collection Practices Act (FDCPA) violations.
B.. Determined
whether any of the FDCPA-coded cases
resulted in administrative actions.
II.
Determined
whether there were Fair Tax Collection Practices violations which resulted in civil actions (judgments and awards
granted) by requesting a computer extract from the Counsel Automated
System Environment (CASE) of the Subcategory 6304 (established to track FDCPA
violations) cases opened after July 22, 1998, and closed during the period January
1 through December 31, 2004. The Office
of Chief Counsel identified no cases.
Appendix II
Major Contributors to This
Report
Daniel R. Devlin, Assistant Inspector General for Audit (Headquarters
Operations and Exempt Organizations Programs)
Michael E. McKenney, Director
Kevin P. Riley, Audit
Manager
Charles O. Ekunwe, Lead
Auditor
Frank I. Maletta,
Auditor
Appendix III
Commissioner C
Office of the Commissioner – Attn: Chief of Staff C
Chief Counsel CC
Chief Human Capital Officer
OS:HC
National Taxpayer Advocate
TA
Director, Office of Legislative Affairs CL:LA
Director, Office of Program Evaluation and Risk
Analysis RAS:O
Office of Management Controls OS:CFO:AR:M
Audit Liaisons: Chief Counsel CC
Chief Human Capital Officer OS:HC
Appendix IV
Fair Tax Collection Practices
Provisions
To ensure the Internal Revenue Service (IRS) and private debt collectors follow similar rules, the IRS Restructuring and Reform Act of 1998 requires the IRS to comply with certain provisions of the Fair Debt Collection Practices Act. These provisions are referred to as Fair Tax Collection Practices procedures. Specifically, the IRS may not communicate with taxpayers in connection with the collection of any unpaid tax:
· At unusual or inconvenient times.
· If the IRS knows that the taxpayer has obtained representation from a person authorized to practice before the IRS, and the IRS knows or can easily obtain the representative’s name and address.
· At the taxpayer’s place of employment, if the IRS knows or has reason to know that such communication is prohibited.
Further, the IRS may not harass, oppress, or abuse any person in connection with any tax collection activity or engage in any activity that would naturally lead to harassment, oppression, or abuse. Such conduct specifically includes, but is not limited to, the:
· Use or threat of violence or harm.
· Use of obscene or profane language.
· Causing a telephone to ring continuously with harassing intent.
· Placement of telephone calls without meaningful disclosure of the caller’s identity.
Appendix V
Management’s Response to the Draft Report
The response was removed due to its
size. To see the response, please go to
the Adobe PDF version of the report on the TIGTA Public Web Page.