Summary: Pursuant to a congressional request, GAO reviewed the Internal Revenue Service's (IRS) use of levies initiated through its Automated Collection System (ACS), focusing on: (1) the extent and causes of erroneous levies; and (2) IRS controls to prevent erroneous levies or mitigate their effects.
GAO found that: (1) IRS erroneously levied the assets of 4,600, or 1.5 percent of individual taxpayers, and 7,800, or 5.7 percent of businesses during fiscal year 1986; (2) delays and errors in recording tax payments were the two primary causes of erroneous levies; (3) IRS could improve its controls and significantly reduce the number of erroneous levies by instituting a nationwide levy verification program; (4) IRS refunded most of the erroneously collected levies with interest; (5) 3 IRS service centers established a system to manually review levies identified through ACS with the more up-to-date information in the IRS Integrated Data Retrieval System; and (6) IRS computer modernization initiatives could help in the long run by providing more accurate and up-to-date information.
