IRS Falls Short in Collecting Unpaid Taxes


The IRS, which already has more problems than it needs, has gotten another black eye, this time from the Treasury Inspector General for Tax Administration (TIGTA), for failing to collect unpaid taxes. Tax attorney Rob Wood discusses the TIGTA audit in this report and in his Forbes article “IRS Flubs 57% Of Tax Collections, Says Audit Of IRS.”

Rob Wood

Rob Wood

The report finds that the IRS has been doing a bad job of collecting taxes owed to them. As Wood points out, anyone who has had a bad experience with vigorous tax collection efforts by the IRS will be put off by reading that many others are getting away with nonpayment of taxes owed.

TIGTA’s report finds that the agency is not following its own rules on collecting taxes and “is leaving a lot of money on the table.” The amount not collected is about $6.7 billion, a considerable sum to ignore. Wood believes that it is hard for the IRS to follow its own rules, but it is essential that the IRS do a better job than this.

Wood explains that the “overwhelming majority of the US tax system is based on self-assessment.” That’s why it is so critical for Americans to believe in the system and to believe that everyone is being treated the same. Wood says that apparently most of the uncollected taxes result from taxpayers who did self-assessment, who can’t pay the full balance, and who send in what they can. The problem is that the IRS has not followed up in these situations.

For more information on the subject, please refer to Mr. Wood’s article in Forbes. Robert Wood is a tax attorney with Wood, LLP in San Francisco, California and spoke with The Tax Law Channel, an affiliate of The Legal Broadcast Network.  The Legal Broadcast Network is a featured network of the Sequence Media Group.