IRS expands in-person tax compliance visits
The Internal Revenue Service is expanding its efforts to ensure businesses and individuals are paying their taxes, particularly payroll taxes, with in-person visits planned by revenue officers to more parts of the country, starting recently in Wisconsin and later this month Texas and Arkansas.
The goal of the visits is to help resolve tax compliance issues by meeting face-to-face with taxpayers who have ongoing tax issues, such as payroll tax compliance for employers. The IRS plans to focus its efforts in areas where there have been a limited number of revenue officers available due to declining IRS resources. Thanks to recent budget increases, the IRS has been expanding its staff and has been on a hiring spree, allowing it to expand its enforcement efforts.
“Over the past several years, the IRS has had to make some tough budget decisions given the reality of the budget that was available for operations, and in some cases that has caused us to reduce our presence in certain areas of the country,” said Darren Guillot, deputy commissioner of collection and operations support in the IRS’s Small Business/Self-Employed (SB/SE) Division, during a conference call Friday with reporters. “But our mission to collect taxes at the most efficient cost to the public does not change. One alternative strategy that we have been pursuing is how we could have a greater presence in the community given that our resources are limited. In some locations, we have few or no revenue officers. Those are the civil enforcement officers who help educate taxpayers as well as collect taxes and conduct civil investigations and civil enforcement. How can we make the best use of those employees?”
The IRS has been identifying areas of the country where it either no longer has an office near taxpayers or where it has no presence at all. The new program will supplement the IRS’s Private Debt Collection program, in which it works with contracted collection agencies who telephone individual taxpayers who owe longstanding tax debts..
“These new visits that we're doing outside involve teams of revenue officers traveling to locations where we have reduced resources or no resources to visit higher-risk cases involving larger balances due and cases that have needed visits from a revenue officer for some time, in some cases years,” said Guillot. “It allows us to create a more level playing field where the IRS has a presence with all taxpayers. It's not just the high balance due taxpayers. These expanded visits we're doing are going to enable us to get into those communities and have that presence established. We think this is going to help us enhance a more balanced and fair administration of the tax laws.”
One of the main focuses will be unremitted payroll taxes. “In many cases business owners have been withholding large amounts of employment taxes from their employees and not [sending] them over to the Treasury,” said Guillot. “It’s an extremely high priority. Our efforts are to try to get them into compliance when we meet with them face to face. We have data that proves this is an effective way of getting them to be compliant, which is the kind of success we want, because if the business becomes compliant, they continue to provide jobs for our citizens, and that's good for everybody.”
At the same time, the IRS is taking steps to safeguard taxpayers from criminals impersonating IRS agents. By announcing general details about the efforts in specific areas, the IRS plans to raise community awareness about IRS activity at a particular time to avoid confusion during a period where IRS scam artists and imposters remain active. When IRS revenue officers visit a taxpayer, the IRS said they will always provide two forms of official credentials. Both IDs will include a serial number and photo of the IRS employee. Taxpayers will have the right to view each of the credentials. The officer will explain the tax liability to the taxpayer. The visits will typically occur after numerous contacts by mail about an existing tax issue, so taxpayers should be aware they have a tax issue when the visits occur. If the person owes an outstanding federal tax debt, the visiting officer will ask for payment but will provide a range of payment options, including paying by check, payable to the U.S. Treasury.
“A significant portion of those cases are going to be business cases and very much also focused on those business cases that involve payroll tax liabilities,” said Hank Kea, director of SB/SE Collection-Specialty Collection Insolvency. “Likewise, individual cases that we go out on are typically going to be the higher-dollar, more complex cases. In these visits, whether we’re sending numbers of revenue officers into a specific area during a specific period of time or just in the normal course of business, as our revenue officers go out and meet with taxpayers face-to-face and work cases individually, these cases are where the taxpayer has had multiple prior contacts from IRS regarding their tax liabilities. While our revenue officers may make unannounced visits, the taxpayer is not getting a surprise contact from IRS. They had multiple attempts by reps to resolve their tax liabilities. So when we send out a revenue officer to meet with them face to face, that is an additional attempt to resolve that tax liability.”
He noted that there will be additional compliance events like this throughout the year. The IRS plans to send around a dozen revenue officers to an area and they will be splitting up to visit multiple taxpayers to resolve high-priority cases.