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NCJRS Abstract

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NCJ Number: 73628 Find in a Library
Title: Government Can Collect Many Delinquent Debts By Keeping Federal Tax Refunds as Offsets
Corporate Author: US Government Accountability Office
United States of America
Date Published: 1979
Page Count: 30
Sponsoring Agency: National Technical Information Service
Springfield, VA 22151
US Government Accountability Office
Washington, DC 20548
Sale Source: National Technical Information Service
US Dept of Commerce
5285 Port Royal Road
Springfield, VA 22151
United States of America
Document: PDF
Language: English
Country: United States of America
Annotation: To improve the Federal Government's debt collection procedures, the General Accounting Office (GAO) suggests that the Government collect certain delinquent debts by keeping Federal tax refunds as offsets.
Abstract: Over $400 million in nontax receivables was written off by the Government in fiscal 1978, and that amount is increasing. Collection of these receivables could be accomplished by transferring the uncollectible receivable balances to the Internal Revenue Service (IRS) for matching against subsequent tax refunds. In cases where an individual or firm owes the Government money, the applicable tax refund would be reduced by this amount. To evaluate the feasibility of this offset method, GAO provided data to IRS on 613 outstanding Government receivables valued at $413,309. IRS determined that $153,583, or 36 percent, could conceivably have been collected by reducing tax refunds paid in the following 2 years. Additional amounts could have been recovered in succeeding years. Further, the Federal Government's right to collect delinquent debts by offsetting against amounts due the debtors is strongly supported by statutes and court decisions. Thus, IRS should implement procedures which (1) provide for agencies to refer delinquent receivables to IRS after all collection efforts have been exhausted and (2) screen Federal income tax refunds against those delinquent debts and withhold all or part of refunds due. However, IRS expressed reservations about the practicability of this program when balanced against the value of concentrating IRS resources on the administration of tax laws. The full IRS response to GAO's recommendations is appended, and footnotes are provided.
Index Term(s): Debt collection practices; Federal programs; Internal Revenue Service; Tax evasion; US Government Accountability Office (GAO)
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