Treasury Inspector General for Tax Administration
September 19, 2011
TIGTA - 2011-56
Contact: Karen Kraushaar
WASHINGTON - The Office of Appeals at the Internal Revenue Service (IRS) should improve its processing of Collection Due Process (CDP) cases, according to a new report from the Treasury Inspector General for Tax Administration (TIGTA).
The Appeals office is independent of other IRS offices, and its mission is to resolve tax controversies, without litigation, on a basis that is fair and impartial to both the Federal Government and the taxpayer. The CDP Program allows taxpayers to appeal when the IRS files a lien or a Notice of Intent to Levy for unpaid taxes. A taxpayer usually has 30 calendar days to request a CDP hearing. If a taxpayer’s request for a CDP hearing is not received within the allotted time period, the taxpayer, at the discretion of Appeals, might be granted an Equivalent Hearing, but the taxpayer may not petition for a reversal if they disagree with the results of those hearings.
TIGTA is required to determine annually whether the IRS complied with legal guidelines and procedures for the filing of a lien or a Notice of Intent to Levy and the right of the taxpayer to appeal.
TIGTA found that taxpayers did not always receive the appropriate type of hearing. In its report, TIGTA found that Appeals did not always classify taxpayer requests properly. On some taxpayer accounts, TIGTA found errors with the Collection Statute Expiration Dates (CSED), which can potentially violate taxpayer rights or result in lost revenue for the Government.
TIGTA found more errors related to the CSEDs on taxpayer accounts than during prior audits. TIGTA estimated that 7,990 of the 37,289 CDP cases closed in Fiscal Year 2010 had an incorrect CSED.
Further, hearing officers did not always document their case files with all required information, increasing the risk that the IRS has not met all the requirements of applicable laws or administrative procedures with respect to the proposed levy or lien.
"Appeals must ensure that all its casework is handled accurately and timely, since any lapse can affect a taxpayer’s right to petition the United States Tax Court and the time allowed for the IRS to collect any balances owed," said J. Russell George, the Treasury Inspector General for Tax Administration.
TIGTA recommended that Appeals correct the inaccurate CSEDs identified in the audit and develop a job aid for employees to assist in more accurately determining the correct CSEDs. Appeals management agreed with TIGTA’s recommendations. Read the report.
Read the report.
A special plugin is required to view PDF documents. To obtain the free PDF reader, please visit the Adobe web site.