TIGTA Study Shows That Business Tax Assessments Are Increasing

Assessments against business taxpayers that have not filed required tax returns have soared by nearly 60 percent according to the Treasury Inspector General for Tax Administration's (TIGTA) report dated September 17, 2012. However, the Internal Revenue Service needs to improve internal controls to ensure staff follow the correct procedures in documenting the reasons for these assessments, according to this report. 

The report found that in 10 percent of the cases, taxpayers were not provided a full 30 days to respond to proposed assessments prepared for them by IRS before the returns were processed as Collection Field function assessments under tax code Section 6020(b). This is a potential violation of taxpayers' rights.

TIGTA also determined that during Calendar Year 2008, taxpayers with stand-alone 6020(b) assessments (assessments made in which the taxpayers had potential delinquent returns due but no outstanding tax liabilities) were less compliant in subsequent years than taxpayers without 6020(b) assessments. 

However, a more in-depth study of delinquent returns in which the for the Small Business/Self-Employed Division. use of I.R.C. § 6020(b) authority was considered but not used may be needed to better understand these results. The IRS does not track subsequent filing compliance when The IRS has the ability to prepare returns and I.R.C. § 6020(b) authority is used.
 

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