17053IRS quotes....survive 3 years and its "practically uncollectable"
- Jul 10, 2009
Some general FYI Stuff Quotes:
National Taxpayer Advocate Nina Olson from her 2008 Annual Report to Congress:
Here’s an interesting quote below: Now keep in mind the ADULT population in the US is about 230 Million. Look around and every 1 on 60 people are getting a levy slapped on them…and this is EACH YEAR. Let’s suppose that every year 10% are repeats…so we’ll say the IRS issues 3.3 million new levies. In 10 years that number is 33 Million levies….now 1 in 7 people over 10 years got an IRS levy. AMAZING.
ON LIENS AND LEVYS
"We note that the IRS’s own studies show that more enforcement actions – liens and levies – do not translate into commensurate increases in revenue collection." For example, while the number of levies issued by the IRS increased by an astonishing 1,608 percent from FY 2000 to FY 2007 – from 220,000 levies to about 3.76 million – the increase in total collection yield during this period was slightly less than 45 percent.”
ON THE SIZE OF THE CODE
“The Code has grown so long that it has become challenging even to figure out how long it is. A search of the Code conducted in the course of preparing this report turned up 3.7 million words.6 A 2001 study published by the Joint Committee on Taxation put the number of words in the Code at that time at 1,395,000.7 A 2005 report by a tax research organization put the number of words at 2.1 million, and notably, found that the number of words in the Code has more than tripled since 1975.8 To determine the number of words in the Internal Revenue Code, a librarian in the IRS Office of Chief Counsel downloaded a zipped file of Title 26 of the U.S. Code (i.e., the Internal Revenue Code) from the website of the U.S. House of Representatives at http://uscode.house.gov/download/title_26.shtml. She unzipped the file, copied it into Microsoft Word, and used the “word count” feature to compute the number of words. The version of Title 26 she used was dated Jan. 3, 2007, so the count does not reflect legislation passed during the 110th Congress. The Code contains certain information, such as a description of amendments that have been adopted, effective dates, cross references, and captions, that do not have the effect of law. It is possible that other attempts to determine the length of the Code have attempted to exclude some or all of these components, but there is no clearly correct methodology
to use, and there is no easy way to selectively delete information from a document of this length.”
LEVY ISSUED BY AUTOMATION
Policy Statement P-5-71 states that, “A hardship exists if the levy action prevents the taxpayer from meeting necessary living expenses. In each case a determination must be made as to whether the levy would result in actual hardship, as distinguished from mere inconvenience
to the taxpayer.”29 Yet, the most commonly used enforcement action — a levy of a
taxpayer’s salary, wages, or bank account — is predominantly issued via automation. Thus, the IRS requires little to no human intervention to make a distinction of hardship or “mere
inconvenience.”30 Similarly, the IRS’s Automated Collection System’s (ACS) current process of systemically filing an NFTL on cases that are “shelved” or placed into the queue (regardless
of whether the IRS made or initiated contact with the taxpayer), has the potential for further economic harm in today’s economic times.31 At a time when so many homes are
in foreclosure, the IRS should use caution when issuing federal tax liens, which are often
more damaging than bankruptcy to taxpayers’ attempts to secure credit. Moreover, in FY 2008, the IRS continued to issue the majority of its levies via automation
(e.g., ACS and the Federal Payment Levy Program), generally initiating such enforcement
action prior to attempting a personal contact with the taxpayer. The heavy reliance on automated levy and lien filing – without taxpayer contact – undermines the IRS’s mission of increasing voluntary compliance.
It is widely accepted in the business community that accounts receivable become
much more difficult to collect the longer they remain delinquent. According to a study
by Dun & Bradstreet, the probability of collecting a payment 90 days past due declines
by 12 percent for each additional 30-day period.4 A survey of members of the
Commercial Collection Agency Section of the Commercial Law League of America,
completed in June 2001, indicates that generally, if an account is 90 days delinquent,
only 73 percent of the debt will be collected; at six months only 50 percent will be
collected; at 12 months the figure falls to 25 percent; and at 24 months, only 10.5
percent will be collected.5 In fact, the IRS has also recognized and validated this
“collectibility curve” in a number of studies.6 These studies acknowledge that on tax
debts that are 24 months past due, the IRS typically collects approximately 13 cents
on the dollar, and tax debts become practically uncollectible after three years.