Treasury Inspector General for Tax Administration
March 26, 2010
TIGTA - 2010-06
Contact: Karen Kraushaar
WASHINGTON - When taxpayers respond to balance due notices, the Internal Revenue Services is not always properly and timely working the cases or effectively managing the inventory of cases, according to a new report by the Treasury Inspector General for Tax Administration (TIGTA).
Taxpayers with outstanding tax liabilities receive balance due notices informing them of their outstanding liabilities. This is referred to as a "balance due" account.
TIGTA examined a random sample of Balance Due Notice Program cases to determine whether the cases were worked properly and procedures were followed.
When taxpayers respond to balance due notices, TIGTA found that the IRS does not always promptly process the case. This can result in unnecessary delays or costs to the taxpayer. Also, the IRS and taxpayers sometimes enter into streamlined installment agreements when taxpayers may have had the ability to fully pay their tax liability. In other cases reviewed by TIGTA, it appeared that taxpayers did not have the income to support the payment amount required.
TIGTA made several recommendations to the IRS, including ensuring that streamlined installment agreements are beneficial to both the IRS and the taxpayer. IRS management agreed with most of TIGTA's recommendations and is taking corrective actions.
"The IRS is establishing installment agreements without considering whether they are in the interest of either the taxpayer or the government," said J. Russell George, the Treasury Inspector General for Tax Administration. "I am pleased that the IRS agrees with most of our recommendations and is taking corrective actions."
To view the new TIGTA report, including scope, methodology, and full IRS response, go to: https://www.treasury.gov/tigta/auditreports/2010reports/201030019fr.pdf.
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