GAO criticizes "outmoded" collections....

In an October 1993 report (IRS Can Do More to Collect Taxes Labeled "Currently Not Collectible") and in testimony before Congress in November, the GAO criticized the IRS's collections function.

A GAO director told Congress that although IRS records showed gross accounts receivable of $131 billion at the end of fiscal 1992, the IRS classified only $22 billion of that amount as collectible. The director said the IRS needs to reexamine the accounts deemed uncollectible and criticized the IRS's classification methods, under which high-income individuals often are allowed to escape paying back taxes even though they continue to pay high living expenses.

The GAO director also said IRS collections might improve if collections employees' raises were based, at least in part, on how much tax was collected. Since current law (PL 100-647, section 6231, 11/10/88) forbids the use of collections performance or monetary quotas in evaluating IRS personnel, congressional action will be required to change the status quo.

The rules forbidding monetary quotas were enacted to deter overzealous employees from abusing their authority in collecting taxes.