IRS Has Some Limited Data on the Use and Misuse of Lien, Levy, and Seizure Authority

IRS produces management information reports that provide some basic information on tax collections and the use of collection enforcement authorities, including the number of liens, levies, and seizures filed and, in the case of seizures, the tax delinquency that resulted in the seizure and the tax proceeds achieved. Also, some offices within IRS collect information on the misuse of these collection enforcement authorities, but the information is not complete. However, those data alone are not sufficient to determine the extent of misuse. Moreover, the detailed records kept by these offices do not always include data that would permit a determination about whether an enforcement action was properly used. Further, offices responsible for resolving taxpayer complaints do not always maintain records on the resolution of those complaints that would permit identification of instances of inappropriate use of collections authorities. As noted earlier, the Advocate has some information on complaints about the use of collection enforcement authorities, but those data are incomplete. In any event, Inspection does not keep automated or summary records on the results of its investigations as they relate to appropriateness of lien, levy, or seizure actions. IRS Officials Said That Collecting Data to Assess Enforcement Actions Is Impractical and Unnecessary Because Taxpayers Are Protected Through Checks and Balances

We discussed with IRS the feasibility of collecting additional information for monitoring the extent to which IRS may have inappropriately used its collection enforcement authorities, and the characteristics of taxpayers who might be affected by such inappropriate actions. At this time, IRS does not have the data that would permit it or Congress to readily determine the extent to which IRS’ collections enforcement authorities are misused, the causes of those occurrences, the characteristics of the affected taxpayers, or whether the checks and balances that IRS established over the use of collection enforcement authorities are working as intended. found? sources found.
Why GAO Did This Study

GAO discussed: (1) the availability of information on the Internal Revenue Service's (IRS) use of its enforcement authorities to collect delinquent taxes; and (2) whether information existed that could be used to determine whether collection enforcement authorities were properly used.

What GAO Found

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.