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DOCOENT RESUME
05377 - [80865787]
IRS Can IsLrove Its Programs To Collect Taxes tithheld by
Employers. GGD-78-14; B-137762. February 21, 1978. 20 pp. + 3
appendices (I4 pp.).
Report to Rep. Al Ullman, Chairman, Joint Committee on Internal
Revenue Taxation; Sen. Russell B. Long, 7ice Chairman; by Elmer
B. Staats, Comptroller General.
Issue Area: Tax Administration (2700).
Contact: General Government Div.
Budget Function: General Government: Central Fiscal operations
(803).
Organization Concerned: Internal Revenue Service.
Congressional Relevance: House Committee on Ways and Beans;
Senate Committee on Finance; Joint Committee on Internal
Revenue Taxation. 2ep. Al Ollman; Sen. Russell B. Long.
Authority: Social Security Act.
In fiscal year 1976, employment trust fund taxes
(income tao.. withheld and social security tax) accounted for $191
billion c Federal gross receipts; these trust fund taxes
acounted for 63% of Federal gross receipts over the past 3
years. Collection of these tax funds is the foremost delinquency
problem facing the Internal Revenue Service (IRS). During fiscal
year 1976, the IRS initiated collection action against employers
for nonpayment of $2.4 billion in trust fund taxes.
Findinas/Conclusions: If a business with a tax liability over a
certain dollar amount fails to make a deposit by a specified
date, a tax deposit alart is generated by a computer, and a
revenue officer gets in touch with the taxpayer. However, IRS
revenue officers are not always given enough information to
determ.n.e the extent of action needed to bring taxpayers into
compliance. In 18% of aleits reviewed, additioncl information on
prior delinquencies could have made revenue officers more
effective in their investigations. The review showed that,
despite the issuance of alerts, 43% of the involved taxpayers
subsequently became delinquent. Confusion exists over who iz
responsible for computing failure-to-deposit penalties. Over 20%
of delinquent taxpayers reviewed claimed at least one fictitious
deposit which delayed collection action. Employers filing tax
returns each month are required to pay employment taxes monthly
instead of more frequently as required under the Federal Tax
Deposit System. Recommendations: The Commissioner of Internal
Revenue should: provide district offices with taxpayer
delinquency histories, establish procedures to use inforaation
to sake periodic effectiveness evaluations of the alert program,
provide information on taxpayer delinquent accounts to show
whether penalties were considered, and require mcnthly filets to
deposit taxes under the Federal Tax Deposit System. The Congress
should enact a civil penalty to be used as a deterrent to filers
who claim false deposits on their tax returns. (ERS)](ViewImageLocal?handle=hein.gao/gaobaawwu0001&div=1&collection=&method=preview&ext=.png&size=3)