The Government Accountability Office offered some recommendations aimed at upping efficiency, but said that the Internal Revenue Service Office of Appeals has been doing a good job handling its process for collection due appeals.Under the IRS Restructuring and Reform Act of 1998, taxpayers facing liens or levies can request a collection due process appeal hearing with the IRS office. By 2005, those cases represented about one-quarter of the office’s workload.

After analyzing 208 cases closed during the 2004 fiscal year, the GAO recommended that the IRS require taxpayers seeking a collection alternative to submit additional information with their hearing requests. The IRS disagreed, and the suggestion has now been forwarded to Congress for action. The GAO also asked Congress to consider removing some taxpayer categories from eligibility for the process if those taxpayers’ inclusion “is not consistent with the goal of ensuring due process.”

The GAO estimated that the IRS  not follow proper procedures in 2 percent of collection due process cases closed during 2004. About 27 percent of taxpayers received a different outcome than the lien filing or levy after appealing, including those that negotiated collection alternatives, or ended up with no balance due to IRS. For about 60 percent of taxpayers, Appeals upheld the collection action often because taxpayers did not file all the required tax returns necessary to qualify for a collection alternative.

An estimated 5 percent of taxpayers raised frivolous arguments.

The full report is available at

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