The Internal Revenue Service’s Collection Due Process Program, which allows taxpayers to appeal a tax levy or lien, continues to experience problems, according to a government report.
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The Collection Due Process Program is designed to give taxpayers an opportunity for an independent review to ensure that the levy action that has been proposed by the IRS or a lien that has been filed is warranted and appropriate. This year’s audit identified the same deficiencies in the IRS’s processing of Collection Due Process cases as previously reported, TIGTA noted.
Specifically, the Office of Appeals did not always classify taxpayer requests properly and, as a result, some taxpayers received the wrong type of hearing. In two statistically valid samples, TIGTA identified nine taxpayer cases that were misclassified, a slight increase from the eight misclassified taxpayer cases identified in the prior year’s review.
In addition, TIGTA said it continued to identify errors related to the determination of the Collection Statute Expiration Date on taxpayer accounts. From statistically valid samples, TIGTA identified taxpayer cases that had an incorrect Collection Statute Expiration Date. For the 19 taxpayer cases identified, the IRS incorrectly extended the time period in three of the taxpayer cases, allowing the IRS additional time it should not have had to collect the delinquent taxes. In the remaining 16 taxpayer cases, the IRS incorrectly decreased the time to collect the delinquent taxes.
TIGTA also found that Appeals personnel properly documented the impartiality statement in the Case Activity Records; however, they did not always document their impartiality statement in final hearing notification letters issued to taxpayers. TIGTA found that in four of the 140 taxpayer cases it reviewed, the IRS did not document an impartiality statement in the final notification letters it sent to taxpayers.
TIGTA recommended that the chief of the IRS’s Appeals office review and correct the taxpayer accounts that were identified with Collection Statute Expiration Date errors. The IRS agreed with the recommendation and plans to review and correct the accounts TIGTA identified.
“We have reviewed the 19 taxpayer accounts and initiated corrections to all of the CSED errors,” wrote IRS Appeals chief Kiersten B. Wielobob in response to the report. “Posting is complete on 7 of the accounts.”
