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Declining Resources Affect IRS's Ability to Collect Delinquent Taxes

Declining Resources Have Contributed to Unfavorable Trends in Several Key Automated Collection System Business Results

WASHINGTON – Declining resources could affect the ability of the Internal Revenue Service (IRS) to collect delinquent taxes, according to a new report publicly released today by the Treasury Inspector General for Tax Administration (TIGTA).

The IRS’s Automated Collection System (ACS) is responsible for answering incoming taxpayer calls and working the inventory of taxpayer delinquent accounts. TIGTA reviewed whether the ACS inventory management process can be improved to balance the workload and maximize the assignment of productive cases.

Since Fiscal Year 2010, the ACS workforce has declined by 39 percent due to attrition or reassignment, TIGTA found. Because resources are needed to answer telephone calls, fewer resources are available to work inventory. This has contributed to unfavorable trends in several ACS business results, including: new inventory outpacing closures; inventory taking longer to close; more cases being closed as uncollectible; fewer enforcement actions being taken; and, more aged cases being transferred to the Queue (holding file).

In addition, the IRS has not established performance metrics to measure the effect answering incoming calls has had on compliance business results. Capturing these data would allow ACS management to assess the impact of prioritizing call handling.

"IRS management should take steps to ensure that inventory routing and ACS resource capabilities are aligned with overall IRS tax administration priorities and their vision for the role of the ACS in the Collection enforcement strategy,” said J. Russell George, Treasury Inspector General for Tax Administration.

TIGTA recommended that the IRS: 1) re-examine the ACS’s role in the Collection workflow process, including inventory delivery to the ACS as well as case retention criteria, and align ACS resources accordingly; 2) request a study to determine the impact of the policy change to not require Notice of Federal Tax Lien determinations on certain unpaid balances; and 3) establish performance metrics for ACS call handling data to measure the impact that answering taxpayer calls has on compliance business results.

IRS officials agreed with the recommendations and plan to take corrective actions.


Read the report.


 Sources: US Treasury Department Office of the Inspector General at http://www.treasury.gov/tigta/press/press_tigta-2014-38.htm


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