Treasury Inspector General for Tax Administration
October 1, 2012
TIGTA - TIGTA - 2012-50
Contact: David Barnes
WASHINGTON – Internal Revenue Service (IRS) revenue officers did not always involve taxpayers’ representatives appropriately in taxpayer interactions during the collection process, according to a report publicly released today by the Treasury Inspector General for Tax Administration (TIGTA).
The IRS has a number of policies and procedures in place to help ensure that taxpayers are afforded the right to designate a qualified representative to act on their behalf when dealing with IRS personnel in a variety of tax matters, the report found. However, TIGTA reviewed a statistical sample of Small Business/Self-Employed Division field collection investigations that were closed in FY 2011 and found that revenue officers were not always involving representatives appropriately in some key actions.
This audit was initiated because TIGTA is required to annually report on the IRS’s compliance with Internal Revenue Code Sections 7521(b) (2) and (c). The overall objective of this audit was to determine whether the IRS complied with the legal guidelines addressing the direct contact of taxpayers and their representatives.
TIGTA found that some revenue officers deviated from procedures by: 1) contacting the taxpayer directly, instead of the authorized representative, on the initial or subsequent contact in the collection investigation; 2) not sending copies of taxpayer correspondence to the authorized representative; or 3) not allowing enough time for the taxpayer to obtain a representative. In addition, little documentation was found in managerial reviews indicating that managers checked to ensure revenue officers were: 1) involving representatives in all case actions; 2) providing representatives a copy of all original correspondence sent to taxpayers; and 3) allowing taxpayers sufficient time to obtain representation.
Although none of the taxpayers involved formally complained to the IRS or to TIGTA, the deviations can negatively affect the taxpayers’ ability to obtain appropriate and effective representation during collection investigations. Moreover, these deviations can increase the risk of taxpayers seeking monetary damages from the IRS if its personnel are intentionally disregarding the direct contact provisions of the Internal Revenue Code.
“It is troubling that some IRS revenue officers deviated from longstanding procedures designed to protect taxpayers’ rights,” said J. Russell George, the Treasury Inspector General for Tax Administration.
TIGTA recommended that the IRS take steps to ensure that existing procedures designed to afford taxpayers their right to appropriate and effective representation are followed during the field collection process.
IRS officials agreed with TIGTA’s recommendation and plan to issue a memorandum reinforcing the need for Collection Field function personnel to follow the procedures and clarify the Internal Revenue Manual to include guidance for managers emphasizing the need to review for adherence to the procedures.
Read the report.
Note: The difference between the date TIGTA issues an audit report to the Internal Revenue Service and the date TIGTA publicly releases the report is due to TIGTA's internal review process to ensure that public release is in compliance with Federal confidentiality laws.
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