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GAO Identifies IRS Collection Process Shortcomings

by Mike Godfrey, Tax-News.com, Washington

15 September 2015


The US Government Accountability Office (GAO) has detected shortcomings in the Internal Revenue Service's (IRS) Automated Collection System (ACS) for prioritizing and selecting collection cases.

The ACS is primarily responsible for answering incoming taxpayer calls, collecting unpaid taxes, and securing tax returns from delinquent taxpayers who have not complied with previous notices.

It makes assessments on the order to work cases based on IRS's collection program priorities, the likelihood the case will be resolved, and the type of tax and amount owed. The ACS also reviews cases to determine what action to take based on whether a levy source or contact information is known for taxpayers.

However, the GAO noted that, during a period when the IRS overall budget was significantly reduced, ACS staff numbers declined by 20 percent from fiscal years 2012 to 2014, while the number of unresolved collection cases at year-end also increased by 21 percent.

Earlier this year, the US Treasury Inspector General for Tax Administration had found that ACS inventory has grown and become older, and that more cases have not been resolved and have been transferred to the Queue, a database that houses delinquent accounts the IRS is unable to work.

Given these trends, the GAO said, "the IRS must make informed decisions about the collection cases it pursues. … [However,] because the IRS has not identified objectives for the collection program and ACS, it is difficult to assess the program's overall effectiveness."

It was pointed out that the IRS has not implemented key internal controls. For example, IRS officials responsible for the collection program were unable to produce clearly documented objectives, which undercuts the effectiveness of IRS efforts to assess risks and monitor ACS performance.

Furthermore, the GAO found that ACS case prioritization and selection process is not documented, and the IRS has no procedures for its periodic evaluation. The IRS "may be missing opportunities to better prioritize its workload, which could improve collection results," it concluded.

TAGS: compliance | tax | tax compliance | law | Internal Revenue Service (IRS) | enforcement | tax authority | United States | Tax

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