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GAO report calls for IRS improvements to the ACS

While most people know that the Internal Revenue Service is ready, willing and able to identify those who have failed to file tax returns on time and collect back taxes, they may not know much about the mechanisms used to accomplish these tasks.

As it turns out, one of the primary tools used by the IRS in this regard is the Automated Collection System -- or ACS -- which uses an automated, multi-tiered process to examine cases, essentially prioritizing them based on such factors as the then-primary concerns of the agency, the type and amount of taxes owed, and the probability of resolution.

Once the necessary analysis has occurred, the ACS contacts taxpayers and, if necessary, issue liens or levies.

Despite deep budget cuts from fiscal year 2012 through 2014 that have seen collections staff decline by 20 percent, the ACS still managed to close or transfer 3.5 million cases last year, collecting almost $6.2 billion in the process.

Interestingly, the Government Accountability Office recently released a report examining the overall effectiveness of the ACS, concluding that important internal controls have yet to be implemented.

Specifically, the report found that its twin missions of applying tax laws fairly and equitably, and maximizing collections could perhaps be compromised by the IRS' failure to do some of the following:

  • Provide clear documentation of ACS objectives
  • Produce a clear definition of fairness
  • Supply clear documentation outlining the selection/prioritization process
  • Establish clear procedures for evaluating the efficacy of the selection/prioritization process

The GAO report also outlined several solutions for the IRS to consider taking, including the creation, documentation and implementation of both collection program objectives and evaluation procedures for the selection/prioritization process.

While IRS officials concurred with the findings of the GAO, it remains to be seen how willing they are to introduce changes to the ACS.    

If you have been contacted by the IRS regarding any sort of tax debt or back taxes owed, consider speaking with an experienced legal professional as soon as possible.

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