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IRS Credited With Success in Nailing Feds Who Owe Taxes
Watchdog recommends improvements to keep the delinquency rate low.
The Internal Revenue Service has done its share to lower the tax delinquency rate for current and retired federal employees, though some improvements could be made, a watchdog found.
The IRS identified 304,665 federal employees and retirees who owed some $3.54 billion in unpaid taxes at the end of fiscal 2014, noted the Treasury Inspector General for Tax Administration. Analysis of IRS data shows that “federal employee and retiree delinquency rates were fairly low over the five-year period from fiscal 2010 through 2014, averaging 3.1 percent, said a report released Wednesday.
“IRS management informed us that consistently low delinquency rates of federal employees and retirees might be attributed to the IRS providing information to assist federal agencies through their outreach activities such as delinquency rate information, demographic data and other materials to aid agencies in focusing their compliance message to the workforce,” the report said. In some agencies, federal tax compliance is a condition of employment.
“Like all taxpayers, federal employees and retirees have a legal obligation to pay their taxes,” said J. Russell George, Treasury Inspector General for Tax Administration, after a review of IRS processing of outstanding tax debts in the federal and military community. “However, federal employees and retirees are held to a higher ethical standard for a number of reasons, including that they draw their compensation from federal taxes.”
Agency employees who fall behind on tax payments can get exclusions for active-duty wages, service in a combat zone, bankruptcy, ongoing litigation and financial hardship, among other circumstances.
To increase its collection even more, TIGTA wrote, the IRS could broaden its levy program on federal wages and automate another program. Applying its Federal Payment Levy Program to more taxpayers might boost revenue by about $18.3 million over the next five years, auditors found. Automating the successful Federal Employee/Retiree Delinquency Initiative would also improve results, the report said.
The IRS, however, said its current manual approach to resolving cases is being folded into a newer system as a less-expensive solution.
(Image via Mark Van Scyoc / Shutterstock.com)