Improved oversight of revenue officers (ROs) at the IRS is needed to ensure that case actions are completed timely, according to a report released publicly July 30, 2013, by the Treasury Inspector General for Tax Administration (TIGTA).
TIGTA's review of a sample of cases closed by ROs in the Small Business/Self-Employed Division Collection Field function found that ROs were not always timely when performing analysis prior to making initial contact with a taxpayer or when taking follow-up actions in 44 percent of the cases that required action.
"When some revenue officers perform case actions timely and appropriately while others do not, the potential exists for inconsistent treatment of taxpayers and ineffective collection of revenues", said J. Russell George, the Treasury Inspector General for Tax Administration. "The more time that passes before taxpayers make at least one payment, it becomes less likely that they will do so at a later date. Meanwhile, taxpayers who are not contacted timely may accrue more interest and penalties compared with taxpayers who are promptly contacted."
IRS procedures require ROs to conduct analysis before making initial contact with a taxpayer but do not provide specific time periods. TIGTA reviewed a random sample of 139 cases and found that in 8 of the 139 cases (six percent), the analysis required prior to making initial contact was either not completed or was completed after the RO contacted the taxpayer.
In addition, IRS procedures are specific about how much time an RO has to contact a taxpayer after being assigned a case. TIGTA determined that, in the cases it reviewed, the majority of the maximum time allowed had elapsed before ROs attempted contact, and they made untimely contact in 26 of 134 sampled cases (19 percent) in which initial contact was required.
Furthermore, in 82 of the sampled cases (61 percent) in which initial contact was required, the ROs were unsuccessful in making initial contact with taxpayers when they attempted to do so. Finally, ROs did not take timely follow-up actions in 55 (42 percent) of 130 cases requiring action.
TIGTA's audit report determined that IRS management controls to ensure that ROs take timely case actions were not completely effective. Further, TIGTA determined that, in June 2011, IRS management increased the maximum time allowed for initial contacts, without assessing the impact such an increase would have on inventory, workload, or revenue.
TIGTA made several recommendations to improve the timeliness of RO case actions and also recommended that management assess the impact of the procedural change that increased the maximum time allowed for initial contacts.
IRS management agreed with most of TIGTA's recommendations and stated that they plan to take corrective action. Management did not agree that additional controls were necessary to ensure that ROs perform analysis prior to making initial contact with taxpayers, but did agree to issue a reminder notice to employees.
Note: The difference between the date TIGTA issues an audit report to the IRS and the date TIGTA publicly releases the report is due to TIGTA's internal review process to ensure that public release is in compliance with federal confidentiality laws.
Source: July 30, 2013, TIGTA Press Release