Office of Audit
Fiscal Year 2016 STATUTORY Review of Disclosure of Collection Activities on Joint Returns
Final Report issued on August 25, 2016
Highlights of Reference Number: 2016-30-060 to the Internal Revenue Service Deputy Commissioner for Services and Enforcement.
IMPACT ON TAXPAYERS
Internal Revenue Code (I.R.C.) Section (§) 6103(e)(8) gives joint filer taxpayers who are no longer married or no longer reside in the same household the right to request information regarding the IRS’s efforts to collect delinquent taxes on their joint tax return liabilities. If the IRS does not provide employees sufficient guidance for handling those requests, taxpayer rights could potentially be violated.
WHY TIGTA DID THE AUDIT
This audit was initiated because the IRS Restructuring and Reform Act of 1998 added I.R.C. § 7803(d)(1)(B), which requires TIGTA to annually review and certify the IRS’s compliance with I.R.C. § 6103(e)(8). The objective of this review was to determine whether the IRS is complying with the provisions of I.R.C. § 6103(e)(8) as related to the disclosure of collection activities with respect to joint filers.
WHAT TIGTA FOUND
IRS management information systems do not separately record or monitor joint filer requests, and there is no legal requirement for the IRS to do so. While TIGTA does not recommend the creation of a separate tracking system, it determined that improvements can be made when receiving disclosures of collection information requests pursuant to either I.R.C. § 6103(e)(8) or § 6103(e)(7).
IRS procedures require taxpayers to specifically cite I.R.C. § 6103(e)(8) authority in their written requests even though there is no such requirement in the statute. This additional burden placed on taxpayers by the IRS may result in the denial of information guaranteed under I.R.C. § 6103(e)(8).
Other IRS procedures provide that taxpayers’ requests can still be processed even if the taxpayers do not specifically cite I.R.C. § 6103(e)(8) by using the authority granted under I.R.C. § 6103(e)(7). TIGTA interviewed employees from three Automated Collection System call sites and found that IRS employees may not be providing information guaranteed under I.R.C. §§ 6103(e)(7) or (e)(8) because not all IRS Automated Collection System employees have been trained that taxpayers are entitled to this information.
WHAT TIGTA RECOMMENDED
TIGTA recommended that the IRS 1) update the Internal Revenue Manual (IRM) sections used by IRS call sites with detailed instructions regarding oral and written requests received under I.R.C. §§ 6103(e)(7) and (e)(8) and that all IRM sections pertaining to I.R.C. § 6103(e)(8) remove the requirement to specifically cite I.R.C. § 6103(e)(8) authority in written requests and 2) update training on how to handle oral and written requests received under I.R.C. §§ 6103(e)(7) and (e)(8) for all IRS employees who would receive these types of requests while interacting with taxpayers on the telephone, as appropriate.
The IRS agreed with both recommendations and plans to modify pertinent IRM sections by: 1) adding information about requests involving divorced or separated spouses, 2) adding a reference to the IRM section pertaining to disclosures, and 3) removing the requirement to specifically cite I.R.C. § 6103(e)(8) authority in written requests. The IRS also plans to provide training to all employees who could receive these requests in order to clarify the handling of written and verbal requests received under I.R.C. §§ 6103(e)(7) and (e)(8) and update training for its Accounts Management employees on how to handle oral and written requests received under I.R.C. § 6103
READ THE FULL REPORT
To view the report, including the scope, methodology, and full IRS response, go to:
Phone Number / 202-622-6500
E-mail Address / TIGTACommunications@tigta.treas.gov
Website / https://www.treasury.gov/tigta