TREASURY INSPECTOR GENERAL
FOR TAX ADMINISTRATION
MANAGEMENT ADVISORY REPORT - VIOLATIONS OF THE FAIR DEBT COLLECTION PRACTICES ACT RESULTING IN ADMINISTRATIVE OR CIVIL ACTIONS (FISCAL YEAR 2000)
Reference No. 2000-10-104
The Fair Debt Collection Practices Act (FDCPA) includes provisions that restrict various collection abuses and harassment in the private sector that did not apply to the United States (U.S.) Government when the FDCPA was enacted. However, the Internal Revenue Service (IRS) Restructuring and Reform Act of 1998 (RRA 98) requires the IRS to comply with certain provisions of the FDCPA and to be at least as considerate to taxpayers as private creditors are required to be with their customers. In addition, taxpayers whose FDCPA rights are violated can file a civil action against the U.S. Government under the Civil Damages for Certain Unauthorized Collection Actions.
The RRA 98 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 FDCPA violations. This semiannual report must provide a summary of such taxpayer actions and include any judgments or awards granted. The objective of this audit was to comply with our reporting requirement by obtaining and analyzing information on IRS administrative and civil actions resulting from violations of the FDCPA by IRS employees. We reviewed closed cases coded as FDCPA after the IRS implemented FDCPA codes on the Automated Labor and Employee Relations Tracking System (ALERTS) in March 1999 and on the Counsel Automated System Environment (CASE) in June 1999.
Based upon our review of information recorded on IRS computer systems, we identified only one violation of the FDCPA that resulted in the IRS taking an administrative action against an employee. In addition, the IRS did not pay any money to taxpayers for civil actions resulting from FDCPA violations.
One Fair Debt Collection Practices Act Violation Resulted in an Administrative Action
To determine if any FDCPA violations resulted in an administrative action, we reviewed Collection and Customer Service Divisions’ employee cases from the ALERTS. All cases were coded as FDCPA violations and were opened after July 22, 1998, and closed during the period March 19, 1999, through March 31, 2000. Our review of all 23 cases coded as FDCPA violations identified 1 violation that resulted in an administrative action being taken against an employee.
No Fair Debt Collection Practices Act Civil Actions Resulted in a Monetary Settlement to a Taxpayer
Civil actions filed by taxpayers against the IRS are input to the CASE for tracking. For cases opened after July 22, 1998, and closed during the period June 11, 1999, through March 31, 2000, the CASE did not include any closed civil actions categorized as FDCPA. As a result, the IRS did not pay any money to taxpayers for civil actions resulting from FDCPA violations during the period of our review.
To determine if there were other civil actions involving FDCPA violations not properly captured on the CASE, we reviewed 25 cases opened on or after July 22, 1998, that were either still open, or were closed during the period February 1, 1999, through March 31, 2000. The Department of Justice’s Tax Division provided the case information. None of the 25 cases involved FDCPA violations.