The Internal Revenue Service did not work effectively on over a quarter of the cases involving delinquent taxes of between $100,000 and $1 million, and in some cases simply dropped them, according to a new report.
The Treasury Inspector General for Tax Administration found that 17 of the 62 “large-dollar” cases it sampled from the IRS’s automated collection system, or ACS, were either removed from the inventory caseload or were not worked on properly by employees. The work that has been discontinued on a larger group of approximately 1,001 taxpayer accounts had a potential impact on the treasury of up to $209 million, TIGTA estimated.
The report acknowledged that IRS managers “effectively” controlled and monitored the workload and inventory of the large-dollar cases, and provided additional training to employees. However, nine of the 62 cases were systematically moved to an automated holding file queue for unassigned cases, and very few or no actions were taken on them afterward. In addition, employees either did not work on eight of the remaining 53 cases to their proper conclusion, follow all the case requirements, or resolve the cases properly. In some cases, employees from outside the ACS Department worked on the cases.
IRS officials agreed with two of TIGTA’s recommendations for analyzing the cases and business rules, but said that it wasn’t necessary to involve ACS managers in cases where a non-ACS employee worked. The IRS also disagreed with TIGTA’s $209 million estimate.
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