Followup of Guam's Administration of Its Income Tax Program

GAO reported on the results of its followup review of Guam's progress in improving the administration of its income tax program.

GAO found that, although Guam has attempted corrective action in areas noted in a prior report, problems still exist. Identification of nonfilers remains a problem and automation of the tax program remains incomplete. Therefore, GAO believes that Guam could further improve the administration of its tax programs by: (1) establishing an interim manual matching program to identify and take appropriate action against those who fail to file a tax return; (2) taking aggressive collection actions against delinquent taxpayers by using authority to seize property more frequently and filing notices of liens and levies in a timely manner; (3) monitoring for tax compliance all firms having Government service contracts; (4) requiring employers who are chronically delinquent in paying withholding taxes to file monthly rather than quarterly returns; and (5) establishing an effective management system for monitoring and controlling agents' workloads. Additional funds may be needed to make these improvements and it is not likely that the revenue generated by the improvements would significantly reduce Guam's general fund deficit. Therefore, if Guam is to achieve self-sufficient status, additional or alternative revenue raising approaches or further budget cuts will probably have to be developed.