Posted On February 17, 2015

TIGTA largely approves IRS use of Fresh Start Initiatives

The Fresh Start Initiatives of the IRS were instituted in 2011 to give burdened taxpayers, including residents of Nevada, accommodations to more easily pay off their back tax debt during bad economic times. Recently, the Treasury Inspector General for Tax Administration (TIGTA) issued a report concluding that some of the programs were in fact beneficial to many taxpayers. The IRS was supported for generally executing the initiatives in an effective manner.

TIGTA reported that taxpayers benefited from streamlined procedures for processing negotiated settlements and payment plans. It was also reported that the filing of tax lien notices against those owing below $10,000 had decreased by 60 percent. However, TIGTA also published some recommendations to better administer the program.

One problem was that the IRS failed to file new tax lien notices when wealthier taxpayers defaulted on their payment plans. The IRS indicated that the right to collect on a lien continues even if the agency removes the notice of lien filing. That last point would probably be challenged by tax collection attorneys representing taxpayers.

TIGTA also commented that the IRS has not evaluated the revenue impact of filing fewer tax lien notices, but that this should be done to maximize the efficiency of the procedures. TIGTA stated that assurances must be adopted to show that the IRS will refile tax lien notices against certain categories of taxpayers who default on their agreements. TIGTA also recommended that the IRS institute procedures to monitor the efficacy of the Fresh Start Initiatives.

The IRS has reportedly agreed to take necessary action to execute the TIGTA recommendations where appropriate. However, in keeping with general statements of the agency in recent months, IRS spokespersons pointed out that the agency does not have the budget or the updated technology to make proper assessments of the efficiency of the initiatives. All of these policy initiatives may be helpful to taxpayers who have outstanding tax debt, including residents of Nevada.

Source: accountingtoday.com, “IRS Fresh Start Initiatives Come under Scrutiny“, Michael Cohn, Feb. 11, 2015