Tax Administration

Internal Revenue Service (IRS) systems are not designed to keep track of the use and possible misuse of collection enforcement tools--liens, levies, and seizures--to collect delinquent taxes. Some information is available in manual records, but because collection enforcement actions can be taken by several different IRS offices and records resulting from these actions are not always linked to IRS' computer systems, this information cannot be readily assembled to assess the use of enforcement measures. Also, data are not readily available from other potential sources, such as taxpayer complaints, because IRS does not require that information on complaint resolution be recorded. As a result, it cannot be determined how often collection enforcement measures are used improperly, the characteristics of taxpayers affected by their use, or whether IRS checks and balances to prevent misuse of these collection authorities are working as intended.

GAO found that: (1) while IRS has some limited data about its use, and misuse, of collection enforcement authorities, these data are not sufficient to show: (a) the extent of the improper use of lien, levy, or seizure authority; (b) the causes of improper actions; or (c) the characteristics of taxpayers affected by improper actions; (2) the lack of information exists because IRS' systems--both manual and automated--have not been designed to capture and report comprehensive information on the use and possible misuse of collection authorities; (3) also, much of the data that are recorded on automated systems cannot be aggregated without a significant investment of scarce programming resources; (4) some information is available in manual records, but--because collection enforcement actions can be taken by a number of different IRS offices and records resulting from these actions are not always linked to IRS' automated information systems--this information cannot be readily assembled to assess the use of enforcement actions; (5) also, data are not readily available from other potential sources, such as taxpayer complaints, because, in many circumstances, IRS does not require that information on the resolution of the complaints be recorded; (6) IRS officials told GAO that collecting complete data on the use of enforcement actions that would permit an assessment of the extent and possible causes of misuse of these authorities is unnecessary because they have adequate checks and balances in place to protect taxpayers; and (7) however, IRS does not have the data that would permit it or Congress to readily resolve resonable questions about the extent to which IRS' collections enforcement authorities are misused, the causes of those occurrences, the characteristics of the affected taxpayers, or whether IRS' checks and balances over the use of collection enforcement authorities are working as intended.