TIGTA Reports That High-Income Taxpayers With Delinquent Taxes Could Be More Effectively Prioritized

                         

Average AGI of Taxpayers in This Group	Balance Due	Actual Recovery Rate	Remaining Balance Due
$1,563,390	$4,009,955,107	39%	$2,442,387,519
$98,289	$1,089,010,998	17%	$906,586,760
$24,985	$1,157,135,371	12%	$1,014,227,292

The Treasury Inspector General for Tax Administration (TIGTA) today released the Audit Report High-Income Taxpayers Who Owe Delinquent Taxes Could Be More Effectively Prioritized, which discusses that it identified 685,555 taxpayers who had a balance due as of May 14, 2019.

These Taxpayers Reported Adjusted Gross Income (AGI) of $200,000 or More and Owed a Combined Total of $38.5 Billion.

Because the IRS prioritizes high balance due cases for collection, many of these high-income taxpayers would be included in high-priority work. However, balance dues are not prioritized by incomes earned and some improvements could be made to prioritize high-income taxpayers more effectively. 

When selecting cases to assign to a private collection agency, the IRS randomly selects cases that meet the Private Debt Collection criteria without regard to taxpayers’ ability to pay. TIGTA identified 3,185 high-income taxpayers whose accounts were not sent to a private collection agency at any point since the program started in Fiscal Year 2017 and who owed $110 million on modules that were shelved in an inactive inventory as of May 14, 2019. 

TIGTA also found that revenue officer staffing does not always align with locations where the greatest number of high-income cases are located. While TIGTA recognizes that resources are limited, hiring or reallocating resources to work high-income cases in these areas could lead to higher collection potential and increased revenue. 

TIGTA made seven recommendations to help the IRS improve the collection of taxpayer delinquent accounts of high-income taxpayers. IRS management agreed with two of the seven recommendations. The IRS plans to evaluate the recovery predictive models to consider additional income factors to improve the ability to predict recovery and plans to consider conducting ROCS that focus on high-income taxpayer TDA cases in locations where high-income taxpayer cases far outweigh the number of revenue officers assigned to those areas.

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