The Government Can Collect Many Delinquent Debts by Keeping Federal Tax Refunds as Offsets

FGMSD-79-19: Published: Mar 9, 1979. Publicly Released: Mar 9, 1979.

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An evaluation was conducted to determine the feasibility of collecting accounts receivable by reducing future tax refunds. Over $400 million in non-tax receivables was written off by the government in fiscal year 1978.

A considerable portion of those non-tax accounts could be collected by reducing future income tax refunds due to debtors. Such an off set procedure would be resorted to only after traditional collection efforts have failed. The Internal Revenue Service's (IRS) present collection system could be adopted to match refunds with delinquent debts so that the debtor's refund would be retained to cover the debt. The federal government's right to collect delinquent debts by offsetting against amounts due the debtors is strongly supported by statutes and court decisions. This method would not result in the illegal disclosure of any individual tax return information.

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  • tax icon, source: Eyewire

    Priority Open Recommendations:

    Internal Revenue Service
    GAO-20-548PR: Published: Apr 23, 2020. Publicly Released: Apr 30, 2020.

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