GAO suggests further reform for IRS nonfiler program.The U.S. General Accounting Office said tire Internal Revenue Service could improve its collection strategy for the more than $10 billion lost because some individuals do not file tax returns. A report, Results of Nonfiler Strategy, and Opportunities to Improve Future Efforts, identified several areas in which improvements could be made. In 1993, the IRS An abbreviation for the Internal Revenue Service, a federal agency charged with the responsibility of administering and enforcing internal revenue laws. identified approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 10 million known individual and business nonfilers by matching data on information returns, such as wage and withholding Withholding Any tax that is taken directly out of an individual's wages or other income before he or she receives the funds. Notes: In other words, these funds are "withheld" from your wages. statements from employers, with data on filed income tax returns. Depending on the facts of the case and available resources, the IRS either may take no action or conduct a detailed investigation. The GAO said a recent IRS effort had reduced the size of the nonfiler inventory, eliminated unproductive cases and increased the number of returns secured from individual nonfilers. However, the GAO said it was unclear how much voluntary taxpayer compliance increased as a result. For example, of the nonfilers who were brought into compliance in 1993, 38% had not filed a tax year 1993 return by August 1995--16 months after the returns were due. The GAO identified three areas for improvement. First, its report suggested shortening the time elapsed e·lapse intr.v. e·lapsed, e·laps·ing, e·laps·es To slip by; pass: Weeks elapsed before we could start renovating. n. before the IRS attempted to contact a nonfiler by telephone. At the time of the GAO review, nonfilers whom the IRS considered likely to comply were not contacted by phone until about 1/2 years after the return was due. The GAO also said the IRS should revise the language in notices to nonfilers who are brought into compliance and then fail to file again in later years. In 1995, the IRS decided to send recidivists fewer notices than other nonfilers to expedite ex·pe·dite tr.v. ex·pe·dit·ed, ex·pe·dit·ing, ex·pe·dites 1. To speed up the progress of; accelerate. 2. their cases. The report said the first notice that recidivists receive should convey convey v. to transfer title (official ownership) to real property (or an interest in real property) from one (grantor) to another (grantee) by a written deed (or an equivalent document such as a judgment of distribution which conveys real property from an estate). a greater sense of urgency Finally, the IRS redirected a significant number of its 18,000 revenue agents and tax auditors AUDITORS, practice. Persons lawfully appointed to examine and digest accounts referred to them, take down the evidence in writing, which may be lawfully offered in relation to such accounts, and prepare materials on which a decree or judgment may be made; and to report the whole, together to nonfiler cases, but the report said that future efforts could be just as effective using paraprofessionals or other lower-graded staff, leaving auditors more time to audit. |
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