Internal Revenue Service Receivables

Many GAO audit reports have spotlighted the effect of management failures in the federal government--waste, inefficiency, and even scandal. Political leaders have been forced to spend too much time reacting to surprises like the Department of Housing and Urban Development debacle rather than doing the work the agencies were created to do. GAO began its high-risk program to identify those high-dollar government programs most vulnerable to fraud, waste, abuse, and mismanagement. This report is part of the program's high-risk series of reports, which examine the federal government's efforts to identify and correct problems in 17 especially vulnerable areas, fall into three main categories: lending and insuring, contracting, and accountability. Many of the root causes of the problems afflicting these government programs are traceable to the absence of fundamental processes and systems. GAO urges that future congressional oversight focus on the agency reports and audited financial statements required by the Chief Financial Officers Act, agency management's progress in correcting material weaknesses in program internal control and accounting systems, and federal agency efforts to develop and implement performance standards. The Comptroller General summarized the high-risk series in testimony before Congress; see: Government Management--Report on 17 High-Risk Areas, by Charles A. Bowsher, Comptroller General of the United States, before the Senate Committee on Governmental Affairs. GAO/T-OCG-93-2, Jan. 8, 1993 (22 pages).

GAO found that: (1) IRS estimates that it will never collect 75 percent of the tax debt, since tax records are inaccurate, it cannot locate delinquent taxpayers, and deliquent taxpayers are unable to pay; (2) for fiscal year 1991, IRS collections of accounts receivable actually declined by 5 percent while the IRS receivable inventory increased by 15 percent; and (3) conditions that interfered with IRS ability to collect unpaid taxes included lack of complete account information, an inefficient collection process, the need to balance collection efforts with taxpayer protection, a highly decentralized organizational structure, and uneven staffing among offices.