Treasury Inspector General for Tax Administration
October 9, 2014
TIGTA - 2014-28
Contact: David Barnes
WASHINGTON – The Internal Revenue Service’s (IRS) field workload selection process is not designed to ensure that cases with the highest collection potential are identified, selected, and assigned to be worked, according to a new report publicly released today by the Treasury Inspector General for Tax Administration (TIGTA).
In Fiscal Year 2013, the IRS collected over $3 billion dollars from delinquent taxpayers, but wrote off as much as $16 billion in taxes owed as not collectible.
"The IRS has a large inventory of taxpayer delinquent accounts, but limited resources to collect the unpaid taxes," said J. Russell George, Treasury Inspector General for Tax Administration. "By making better use of its limited collection resources and working these cases strategically, the IRS could successfully collect more taxes and further shrink the Tax Gap."
While the field collects billions of dollars from delinquent taxpayers, resources have declined and many balance-due modules have been closed as currently not collectible. TIGTA performed this audit to determine whether the IRS’s workload identification, selection, and assignment practices ensure that the cases with the greatest collection potential are worked in the field.
In Fiscal Year 2013, 40 percent of the taxpayer delinquent accounts closed by the field were written off as currently not collectible. There are several contributing factors limiting the effectiveness of the IRS’s collection efforts:
Management has begun some initiatives intended to improve the workload selection process. While these initiatives could provide benefits, TIGTA believes that further action is warranted.
TIGTA recommended that the IRS: 1) reexamine the field case selection criteria and strategy, 2) ensure that field personnel are aware of the new strategy, 3) establish a method to measure the effectiveness of the field case selection criteria, and 4) conduct a study of the cases routed to the Automated Collection System to determine whether there are certain types of cases that should instead be routed directly to the queue or the field.
In their response to the report, IRS officials generally agreed with TIGTA’s recommendations. The IRS plans to incorporate their corrective actions as part of a new concept of operations in the creation of a single Collection organization as part of a realignment of IRS compliance programs. Improving case selection criteria will need to be a key component of its new concept of operations to address the intent of TIGTA’s recommendation.
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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