Tax Administration: IRS' System Used in Prioritizing Taxpayer Delinquencies Can Be Improved
GGD-92-6
Published: Mar 26, 1992. Publicly Released: Mar 26, 1992.
Skip to Highlights
Highlights
Pursuant to a congressional request, GAO examined the Internal Revenue Service's (IRS) evaluation of and planned revisions to its Resources and Workload Management System (RWMS) formulas for assigning scores to tax delinquencies to determine probable collections.
Recommendations
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| Internal Revenue Service | The Commissioner of Internal Revenue should direct the Assistant Commissioner (Collection) to seek the experience of private industry in identifying variables and prioritization practices affecting collections that IRS should consider. |
Closed – Implemented
IRS contacted a number of private industry collection agencies and obtained information on predictor variables. IRS also contracted with Price Waterhouse to test additional variables. IRS identified two potentially useful variables--ZIP codes and credit bureau information. IRS intends to add ZIP codes to its predictive formulas, but credit bureau information was determined to be too costly. This is a closed recommendation.
|
| Internal Revenue Service | The Commissioner of Internal Revenue should direct the Assistant Commissioner (Collection) to consider scoring nonfiler delinquencies on the basis of probable collections rather than expected amounts due. |
Closed – Not Implemented
IRS has contracted with Price Waterhouse to develop and test the accuracy of scoring nonfilers on the basis of yield. Price Waterhouse's model for predicting the yield of business nonfilers was not any more accurate than IRS' model using the expected balance to be due as the basis for the score. However, Price Waterhouse's model for individual nonfilers was more accurate than IRS' model using the expected balance to be due as the basis for the score for the highest-yielding nonfilers in the top 20 percent of the cases. IRS was not satisfied with Price Waterhouse's results on the individual nonfilers and did its own analysis using different criteria. IRS' results using balance due as a score reflected a more accurate predictor of collection yield.
|
| Internal Revenue Service | The Commissioner of Internal Revenue should direct the Assistant Commissioner (Collection) to consider expanding RWMS to cover the employment tax delinquency prevention and identification components of revenue officers' workloads. |
Closed – Not Implemented
GAO continues to view this recommendation as valid but it is a long-term goal that will take years to develop as part of IRS' implementation of its Tax Systems Modernization program.
|
| Internal Revenue Service | The Commissioner of Internal Revenue should direct the Assistant Commissioner (Collection) to include RWMS scores on master file records and collection reports that track delinquency dispositions to provide the means for continual evaluations of formulas and avoid the limitations of evaluations based on sample results. |
Closed – Not Implemented
GAO views this recommendation as a long-term goal that will take years to develop as IRS' Tax Systems Modernization program moves forward.
|
Full Report
Office of Public Affairs
Topics
Accounts receivableDelinquent taxesEvaluation criteriaFederal taxesGovernment collectionsStatistical methodsTax administrationTax nonpaymentTax return auditsTaxpayers