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Treasury Inspector General for Tax Administration

Press Release


April 1, 2010
TIGTA - 2010-08
Contact: Karen Kraushaar
(202) 622-6500
karen.kraushaar@tigta.treas.gov
TIGTA-PAO@tigta.treas.gov

TIGTA Report: IRS Effectively Implemented Collection Alternatives to Financially Distressed Taxpayers

WASHINGTON - The Internal Revenue Service effectively implemented or re emphasized options that will help economically distressed taxpayers who are having difficulties paying their balance due accounts, according to a new report publicly released today by the Treasury Inspector General for Tax Administration (TIGTA).

The report evaluated whether the IRS effectively implemented provisions identified to assist economically distressed taxpayers having difficulties paying their balance due accounts.

TIGTA found that the IRS communicated components of its Economic Challenges Action Plan, including: added flexibility for missed payments; additional review of home values on Offer in Compromise cases; postponement of collection actions; prevention of Offer in Compromise defaults; and expedited levy release.

However, the IRS inadvertently gave some individual taxpayers an additional payment skip on installment agreements. When taxpayers miss a scheduled payment, the IRS previously allowed 30 days to pass before terminating the installment agreement. Beginning in January 2009, the IRS allowed taxpayers a total of two skipped payments, or 60 days. Between January 31, 2009 and July 18, 2009, 615,197 taxpayers received the additional skip. However, TIGTA found that some taxpayers received more than one additional skip.

"Overall, the IRS effectively implemented options to help taxpayers facing economic difficulties," said J. Russell George, the Treasury Inspector General for Tax Administration.

To view the new TIGTA report, including scope, methodology, and full IRS response, go to: http://www.treas.gov/tigta/auditreports/2010reports/201030032fr.pdf.

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