TIGTA Reviews of Appeals Identified Processing Errors In 16 (20 Percent) of 81 Sampled Taxpayer Cases

The Treasury Inspector General for Tax Administration (TIGTA) has completed its annual review of IRS compliance with requirements of the Code when taxpayers exercise their rights to appeal the filing of a Notice of Federal Tax Lien or the issuance of a Notice of Intent to Levy. (Audit Report No. 2021-10-049)

The IRS Independent Office of Appeals (Appeals) properly provided taxpayers with only one hearing for the tax period(s) related to the unpaid tax and an impartial hearing officer for Collection Due Process and Equivalent Hearings. Appeals hearing officers verified applicable law or administrative procedures were met and allowed taxpayers to raise issues at the hearing related to the unpaid tax. They also made a determination on the proposed levy and/or filing of the Notice of Federal Tax Lien after considering whether the action(s) balanced efficient tax collection against the taxpayer’s concern that the action(s) be no more intrusive than necessary.

Similar To Prior Audits, TIGTA Identified Processing Errors
In 16 (20 Percent) of 81 Sampled Taxpayer Cases.

Processing errors related to proper classification of hearing requests and incorrect Collection Statute Expiration Dates (CSED) on the taxpayer’s accounts. For example, taxpayer accounts had CSED errors due to incorrectly input CSED suspension start and stop dates. 

• In some cases, the IRS incorrectly extended the time period, allowing the IRS additional time to collect delinquent taxes. 
• In other cases, the IRS incorrectly decreased the time to collect delinquent taxes. 

Based on our sample results, TIGTA estimates that Appeals misclassified 302 Collection Due Process or Equivalent Hearing cases, and 3,623 and 1,510 taxpayer accounts had their CSED overstated and understated, respectively, during Fiscal Year 2020. 

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