Senate Finance Committee chairm Chuck Grassley and ranking member Max Baucus called for an independent investigation of the Internal Revenue Service's Offer in Compromise program by the Government Accountability Office.
The move follows a Sept. 2 letter to Treasury Secretary John Snow in which the senators questioned the IRS and Treasury's implementation and administration of the OIC program -- specifically the apparent failure to use the Effective Tax Administration provision enacted as part of the IRS Restructuring and Reform Act of 1998. That provision was enacted to address offers made where collection would impose an economic hardship on the taxpayer due to illness or lack of financial resources.
"While there remains room for improvement, we have made considerable progress in the OIC program," IRS Commissioner Mark Everson wrote in a response to questions regarding the program that were released by Baucus and Grassley this week.
Responding to a charge that the IRS has placed improving inventory management above quality casework, Everson wrote, "I can assure you that we are maintaining a focus on quality casework while accomplishing improvements to inventory management and cycle time. The expectation is to efficiently and conscientiously evaluate each case based on its individual merits."
According to Everson's response, through August of this year, the IRS accepted 17,740 offers in compromise, rejected 23,115, returned 30,035 deemed processable and returned 35,764 as not processable. The IRS noted that it recently revised the OIC application package to reduce the number of unprocessable offers.
