GAO report slams lax IRS tax collection efforts

Reuters ^ | June 25, 2002 | Jonathan Nicholson

[gcruse]

GAO report slams lax IRS tax collection efforts
Last Updated: June 25, 2002 07:50 PM ET
By Jonathan Nicholson WASHINGTON, June 25 (Reuters) - The declining ability of the Internal Revenue Service to go after citizens owing taxes meant an accumulated $16.1 billion in back taxes was not even actively pursued in 2001, a Congressional watchdog agency said on Tuesday. "IRS officials said that absent significant operational change, they had little expectation of reopening many deferred collection cases," the General Accounting Office said in a report that found "large and pervasive declines" in most agency programs aimed at enforcing tax compliance. The agency said fewer workers, increased workload and increased compliance and collection controls mandated by Congress, as well as the shift of workers from compliance to customer service, had combined to cause a decline in compliance and collection efforts in recent years. By 2001, a program aimed at raising the IRS' collection rates had also led the IRS to defer, or put off, efforts to recoup about $16.1 billion owed by 1.3 million delinquent taxpayers, the GAO said. While $16.1 billion is a relatively small drop in the government's annual receipts of almost $2 trillion, it would equal more than $15.7 billion spent on net interest payments by the government in May. The declines in IRS collection and compliance rates have made it less likely a non-filer could be detected, increased the time it took to assign back taxes to collection, and increased late penalties on taxes owed, making the delinquent payment more difficult to pay, the report said. "Taken together, these changes have reduced incentives for voluntary compliance, a concern of IRS managers. Also, some available, but very limited, data suggest that voluntary compliance may have begun to deteriorate," the GAO said, noting the number of "apparent non-filers" grew about 3.5 times faster than the overall population of individual tax filers. The deferral of collections resulted from a 1999 initiative meant to improve the agency's collection efficiency by focusing on more recent, smaller cases that stood a better chance of being paid. As a result, some older cases were written off as not collectible, the GAO report said. By the 2001 budget year, the IRS was deferring collection at a rate equal to one out of three new delinquent cases. The GAO said the compliance and collection problems are severe enough to be seen by IRS managers as "a strategic problem". "Problems of this magnitude ... must be dealt with by top management and external stakeholders, including Congress and the (IRS) oversight board," the GAO said. In a response included in the report, IRS Commissioner Charles Rossotti said he agreed with the "overall assessment." But he noted areas where the agency was beefing up its compliance efforts, including a new system of random audits meant to give baseline information for measuring compliance.

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[boris]

"customer service"

"Hello, I'm Vinny. I'll be your mugger today. I hope to make your mugging experience a memorable one. Service is my most important product, and if I can aid you in any way--such as helping you sort through your wallet for cash, or unclasping your jewelry--let me know. I know that muggings can be high-stress activities, and a little trembling and nevousness is to be expected. Our motto: 'We serve to serve again!'"

--Boris

[DoughtyOne]

[Paul C. Jesup]

Sounds like the members of the GAO need to be audited.

[gcruse]

Sounds like the members of the GAO need to be audited.

LOL !!!!   Watch for it.