IRS To Tap Benefit Checks To Collect Back Taxes

by Leroy Baker, Tax-News.com, New York

11 October 2001

It has been revealed that the Internal Revenue Service in the United States is set to implement measures which would automatically dock 15% from the Social Security checks of delinquent taxpayers in order to reclaim unpaid back taxes.

The IRS has had the authority to do this since 1997, when the Taxpayer Relief Act was passed, but has, until now, declined to do so for fear of bringing down the wrath of Congress and attracting the attention of critics in the media. However, it appears that its patience with defaulters is wearing thin.

Program director Henry Reches insists that this is not a vendetta on 'deadbeats': 'We don't want to pick on anyone,' he protested. 'We're just trying to collect money that is due to the government and bring people into compliance with tax laws. We've tried through correspondence and different ways and obviously haven't been successful. Rather than expend any more money by sending people out to talk to taxpayers face to face, we have this automated program.'

The General Accounting Office (GAO) has estimated that the new campaign will initially target approximately 232,000 of the country's 45 million Social Security recipients, the majority of whom owe around $1,350 each. However, it has predicted that on an annual basis, the initiative could raise as much as $312 million.

Although there are a great many people (not least those about to have their benefit checks docked!) who are likely to be unhappy about the IRS's latest move, there is some small comfort - there will be two 'consumer alerts' issued before the process begins, with an opportunity to arrange a payment plan, and automated deductions will not begin until next February.

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