Collecting Back Taxes

Pursuant to a congressional request, GAO reviewed the Internal Revenue Service's (IRS) Automated Collection System (ACS), focusing on ACS call sites' effectiveness in calling and providing assistance to persons who owed taxes.

GAO found that: (1) during fiscal year (FY) 1990, the call sites collected about $2.6 billion in back taxes and assessed another $1.6 billion to be collected later; (2) although ACS represented a great improvement over the manual collection system it replaced, ACS has not significantly improved since FY 1985; (3) call sites closed an average of 600 cases per staff year, although collection cases steadily increased from just under 575,000 in 1985 to about 950,000 in September 1990; (4) incoming callers to ACS sites frequently received busy signals or abandoned calls after waiting on hold; (5) only 10 of 23 call sites followed IRS policy for being open 64 hours a week to reach potential taxpayers during evenings and weekends; (6) state and private collection agencies used automated dialing systems, located collection offices in areas with high unemployment rates, and used flexible work hours, part-time help, and incentive pay to ensure adequate staffing; (7) during FY 1990, call site employees charged 52 percent of their time to overhead; (8) although private collection agencies' operations differed from ACS sites, they typically had much lower overhead rates; (9) regional offices operated their call sites differently, making it difficult to improve operations; and (10) although IRS cannot use private collection agencies to collect delinquent taxes, such agencies could help IRS to evaluate and improve its call sites' operations.

Recommendations

Our recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.

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