IRS Changes Procedures &
Adds Staff to Collect Tax Owed

WASHINGTON - Internal Revenue Service is streamlining its collection notice procedure by making personal telephone contact with taxpayers as early as possible when a tax account becomes delinquent.

Under the new procedure, the IRS will send delinquent taxpayers fewer collection notices over a shorter period of time before attempting to telephone taxpayers to resolve collection issues. The IRS is also adding over 700 employees to work delinquent tax cases. (Currently, 2,400 staff years are used in telephone contact work.)

The IRS says that the streamlining will reduce taxpayer burden and that the procedural changes and additional staff will speed up and increase collection of taxes owed.

Now the IRS will call individual taxpayers who have not responded after receiving 3 tax bills issued over 8 16-week period. In the past, the IRS called taxpayers after sending 5 bills over a 26-week period. Business taxpayers in arrears will be contacted by phone after receiving 2 bills over 11 weeks. In the past, the IRS sent 3 bills to businesses over a 15-week period before calling.

In tests the IRS conducted during 1994 on accelerating the billing process and increasing the use of telephone contact, collections of taxes owed increased for both individuals and businesses. In follow-up taxpayer surveys, over 70% of those surveyed said the telephone calls were effective in clarifying unresolved collection issues.

Once a collection case moves to the telephone contact stage, IRS representatives will make calls in the daytime, evening, and Saturdays over a 3-week period. If telephone contact can't be made or the case remains unresolved, the IRS will take the appropriate actions -- issue tax liens, levy financial sources, and refer cases to field revenue officers.

Taxpayers unable to pay outstanding income tax debts may still be able to enter into agreements to pay off the debt in monthly installments.

In fiscal year 1994, the IRS collected $8.1 billion from bills sent to taxpayers and another $1.98 billion from telephone contacts.

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