The Internal Revenue Service needs to do a better job of managing its sales of seized property, recommends a report by the Treasury Department's inspector general.
The report examined the procedures followed by the IRS in selling the property it seized to collect unpaid taxes. Seizures and sales by the IRS have increased in the past seven years. In fiscal 2001, 75 of the 234 seizures made by the IRS went to sale. In fiscal year 2007, 309 out of 676 seizures went to sale. Proceeds from the sales rose from $2.6 million to $20.7 million over the same period.
The Treasury Inspector General for Tax Administration examined 32 cases, and found that 16 of them did not document the appropriate explanations for the reductions taken when the minimum bid prices were established. Five of the cases did not include an advance decision about whether to put in a bid on the federal government's behalf if the minimum bid was not reached, and nine cases did not contain documentation of the reason for the decision. Four cases did not include a proper history of mail-in bids. Seizure logs were also sometimes incomplete or inaccurate, although corrective action has already been taken with this problem.
Employees did not use consistent procedures on the logs they kept to track and control access into and out of IRS storage facilities, TIGTA found. All the properties were accounted for, but two inventory lists from seizures containing multiple items had inaccurate counts and descriptions of the properties.
In response to the report, the IRS plans to determine the extent of documentation errors, issue guidance to clarify its procedures, review the seizure logs for accuracy and issue additional guidance if needed. IRS management also agreed to clarify the procedures for storing property and controlling access to storage facilities.
Register or login for access to this item and much more
All Accounting Today content is archived after seven days.
Community members receive:
- All recent and archived articles
- Conference offers and updates
- A full menu of enewsletter options
- Web seminars, white papers, ebooks
Already have an account? Log In
Don't have an account? Register for Free Unlimited Access