Tax Administration: Opportunities to Increase Revenue Before Expiration of the Statutory Collection Period
GGD-91-89
Published: Sep 30, 1991. Publicly Released: Sep 30, 1991.
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Highlights
Pursuant to a congressional request, GAO provided information on Internal Revenue Service (IRS) accounts receivable that are written off because the collection statute of limitations has expired, focusing on: (1) the amount of the accounts receivable that has been or possibly will be written off; (2) the potential impact of the November 1990 extension of the collection statute of limitations; and (3) IRS procedures for managing accounts receivable nearing the end of their collection periods.
Recommendations
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| Internal Revenue Service | The Commissioner of Internal Revenue should develop more specific information on the validity and characteristics of accounts written off to determine whether additional cost-effective collection measures can be developed and applied. |
IRS rejected this recommendation in its 60-day letter because it believed that it had sufficient information on the accounts likely to be written off and that potential revenue from these accounts was minimal. GAO continues to believe that information about these accounts would help IRS purify its accounts receivable inventory and allow more efficient collection efforts.
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| Internal Revenue Service | The Commissioner of Internal Revenue should systematically collect and analyze local review results on the decisions to classify accounts as currently not collectible to help identify potential systemic problems that may need correction. |
IRS has identified the vital items for CNC cases and included them in the Collection Quality Measurement System Program. Reports can now be generated to provide data at the district, regional, and national level.
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| Internal Revenue Service | The Commissioner of Internal Revenue should ensure timely completion of IRS plans to send reminder notices to taxpayers with accounts suspended in the queue to increase collections of those accounts receivable. |
In February 1992, IRS began sending reminder notices to taxpayers with accounts suspended in the queue.
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Topics
Accounts receivableCollection proceduresDebt collectionDelinquent taxesFederal taxesGovernment collectionsInternal controlsStatutory limitationTax administration systemsTax nonpayment