US Ignores 57% of Tax Debts

October 1, 2014 Taxation in USA

Tax Debts in USAWASHINGTON D.C. – The US is losing as much as USD 1.9 billion in tax collections every year because IRS employees give up too easily on recovering previously unpaid taxes.

Earlier this week the Treasury Inspector General for Tax Administration (TIGTA) issued a new report claiming that the US Inland Revenue Service (IRS) does not take all available avenues before declaring that missed tax payments are uncollectable, and that over the course of 2012 agents of the IRS deemed approximately USD 6.7 billion of owed taxes as uncollectable, despite the fact that in 57 percent of these cases IRS employees did not take all required steps to investigate the debts, such as tracing mailing addresses, investigating motor vehicle registration, court records and any other publicly available records.

In the newly published report it was noted that the IRS may collect as much as USD 1.9 billion in extra taxes, if all necessary steps were taken to track down delinquent taxpayers prior to labeling taxes as uncollectable.

As a remedy to the situation, the TIGTA suggested that extra checks should be made before IRS agents are given permission to label taxes as uncollectable, and more research should be done on the effectiveness of the steps which agents may take when trying to track down tax dodgers.

Photo By: Simon Cunningham