We are finishing up our discussion of the Treasury Inspector General for Tax Administration's report to the IRS about the Fresh Start Initiatives. The Fresh Start Initiatives were introduced in 2011 in response to the financial crisis. Taxpayers were having more trouble than usual paying their taxes, and the IRS wanted to make it easier.
The agency reworked a few existing processes, including the way the IRS handled taxpayers who defaulted on their direct debit installment agreements. When they entered into the agreements, the IRS had withdrawn its Notice of Federal Tax Lien. TIGTA found that the IRS had not reissued those notices when the taxpayer defaulted.
The IRS had been a little sloppy with Fresh Start Initiatives in other ways, too, TIGTA added. First, the agency has yet to determine the effect that filing fewer NFTLs has had on the bottom line, nor has it evaluated the long-term fiscal impact of raising the minimum dollar threshold for NFTLs to $10,000 (as mentioned in our post).
And, TIGTA points out that the IRS has no formal protocol for monitoring and assessing the Fresh Start Initiatives. Generally, a program like this would include data collection and evaluation that would allow the IRS to measure and to report how many taxpayers have been served, how effective the initiatives were and how much the program cost the agency.
The IRS is not arguing with TIGTA's recommendations, but management is pushing back in one area. Evaluation and measurement would be great, but the agency hasn't the information technology resources to accomplish either in any meaningful way.
If you are among the 524 taxpayers identified by the TIGTA report, or if you have any questions regarding an installment agreement, you may want to consult with an experienced tax attorney before you respond to a notice from the IRS.
Source: Accounting Today, “IRS Fresh Start Initiatives Come under Scrutiny,” Michael Cohn, Feb. 11, 2015