TREASURY INSPECTOR GENERAL FOR TAX ADMINISTRATION

Office of Audit

Highlights

THE OFFICE OF APPEALS HAS IMPROVED COMPLIANCE WITHIN THE COLLECTION DUE PROCESS PROGRAM

Final Report issued on August 30, 2016  

Highlights of Reference Number:  2016-10-064 to the Internal Revenue Service Chief of Appeals.

IMPACT ON TAXPAYERS

The Collection Due Process Program was designed to give taxpayers an opportunity for an independent review to ensure that a levy action that has been proposed or a lien that has been filed is warranted and appropriate.  An effective process is necessary to ensure that statutory requirements are met and taxpayers’ rights are protected.

WHY TIGTA DID THE AUDIT

This audit was initiated because TIGTA is statutorily required to determine whether the IRS complied with the provisions of 26 United States Code Sections 6320(b) and (c) and 6330(b) and (c) when taxpayers exercised their rights to appeal the filing of a Notice of Federal Tax Lien or the issuance of a Notice of Intent to Levy.

WHAT TIGTA FOUND

During this year’s audit, TIGTA found that the Office of Appeals made improvements in the overall compliance in the Collection Due Process Program.  However, TIGTA identified similar deficiencies in the IRS’s processing of Collection Due Process cases as previously reported.  Specifically, the Office of Appeals did not always classify taxpayer requests properly and, as a result, some taxpayers received the wrong type of hearing.  In two statistically valid samples, TIGTA identified **1** taxpayer cases that were misclassified.  This is a decrease from the nine misclassified taxpayer cases that were identified in the prior year’s review.

In addition, TIGTA continued to identify errors related to the determination of the Collection Statute Expiration Date on taxpayer accounts.  From statistically valid samples, TIGTA identified taxpayer cases that had an incorrect Collection Statute Expiration Date.  For the **1**taxpayer cases identified, the IRS incorrectly extended the time period in **1** of the taxpayer cases, allowing the IRS additional time it should not have had to collect the delinquent taxes.  In the remaining **1** taxpayer cases, the IRS incorrectly decreased the time to collect the delinquent taxes.  TIGTA also identified ****************************************************************************1************************************************************************************************.

WHAT TIGTA RECOMMENDED

TIGTA recommended that the Chief, Appeals, correct the taxpayer accounts that were identified with Collection Statute Expiration Date errors.

In their response, IRS management agreed with TIGTA’s recommendation and plans to review and correct the taxpayer accounts that TIGTA identified.

READ THE FULL REPORT

To view the report, including the scope, methodology, and full IRS response, go to:

https://www.treasury.gov/tigta/auditreports/2016reports/201610064fr.pdf.

 

Redaction Legend:

1 = Tax Return/Return Information

 

Phone Number   /  202-622-6500

E-mail Address  /  TIGTACommunications@tigta.treas.gov

Website             /  https://www.treasury.gov/tigta