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IRS Has Backlog In Offers Of Compromise
Source:
tax-news.com
- Apr 15, 2012
by Mike Godfrey, Tax-News.com, Washington
15 April 2012
The Treasury Inspector General for Tax Administration (TIGTA) has found that efforts by the United States Internal Revenue Service (IRS) to promote the Offer in Compromise (OIC) programme has increased the number of requested offers by 28% between 2007 and last year, but, at the same time, has created a backlog and delayed responses to taxpayers.
An OIC is an agreement between a taxpayer and the IRS to settle a tax liability for payment of less than the full amount owed. TIGTA's audit was initiated to assess the effectiveness of the OIC programme to process requests timely, consistently apply OIC guidelines, accurately measure programme results, and effectively promote it.
"TIGTA's review found that the IRS has taken positive steps to improve and promote the OIC programme," said J. Russell George, the TIGTA. "Now, current backlogs in the programme make it imperative that the IRS implement needed improvements."
TIGTA reviewed a statistically valid sample of offers and found that the IRS did not process all offers timely. The report estimates that over 9,500 taxpayers who submitted offers between July 1 and December 31, 2010, may not have been contacted when promised.
Additionally, as of October 25, 2011, there were nearly 7,500 unassigned offers in holding queues awaiting assignment to OIC staff. TIGTA also found 37% of the offers were more than six months old.
In addition, the IRS does not have formal performance measures for the streamlined offer process, which allows IRS employees to make taxpayer contact by telephone rather than by mail so they can quickly make a determination on an OIC request.
TIGTA recommended that the IRS revise OIC processing procedures, train employees, and add a formal performance measure for the streamlined offers or apply the streamlined process to all offers. IRS officials agreed with TIGTA's recommendations and the report's outcome measures, and confirmed that they plan to take appropriate corrective actions.
Category: IRS
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