The Treasury Inspector General for Tax Administration recently released the report of an audit it conducted on the Internal Revenue Service's Collections Due Process Program, designed to allow taxpayers a process for exercising their rights to appeal when the IRS files a lien or notice of intent to levy against them.

The audit was initiated because of TIGTA’s statutory requirement to determine whether the IRS complied with the provisions of 26 United States Code Sections 6320(b) and (c) and 6330(b) and (c) when taxpayers exercised their rights to appeal the filing of a Notice of Federal tax Lien or the issuance of a Notice of Intent to Levy.

TIGTA identified the same deficiencies in the IRS’s processing of Collection Due Process cases as previously reported, specifically that the Office of Appeals did not always classify taxpayer requests properly, resulting in some taxpayers receiving the wrong type of hearing.

TIGTA also continued to identify errors relating to the determination of the Collection Statute Expiration Date on taxpayer accounts and that Appeals personnel did not always document their impartiality statement in final hearing notification letters issued to taxpayers.  

Based on these findings, TIGTA recommended that the Chief, Appeals, should:

  • Review misclassified cases to determine if there are process improvements or additional training areas that can be emphasized so that taxpayer cases are identified correctly
  • Consider evaluating whether Collection Due Process notices are clear and provide the proper directions for taxpayers to follow in sending their hearing requests to the IRS
  • Correct the taxpayer accounts that were identified with Collection Statute Expiration Date errors

The IRS agreed with the recommendations and plans to review the cases identified and, if appropriate, update the previously developed Collection Due Process Timeliness Training. The IRS also plans to meet with Collection function management and the Office of Taxpayer Correspondence to discuss the lien and levy Collection Due Process notices, and to review and correct the taxpayer accounts TIGTA identified.

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