Summary: The Internal Revenue Service's (IRS) reported gross accounts receivable have increased from $15.8 billion in 1980 to $110.7 billion as of September 30, 1991. This large balance implies that the American taxpayers owe a tremendous amount in unpaid federal taxes, and some have cited this figure as a potential source of government revenue. GAO found that the IRS reported gross receivables balance for June 30, 1991, was overstated by as much as $39.4 billion and that about two-thirds of what was owed was unlikely to be collected. IRS overstated its gross receivables mainly because it included duplicate and insufficiently supported assessments that it had recorded as part of its efforts to identify and collect taxes due. In addition, IRS estimates regarding the collectibility of its receivables were unreliable. IRS figures have been used in congressional deliberations on the impact that increased collections could have on reducing the deficit, assessing receivables growth, evaluating IRS enforcement and collection performance, and making decisions on IRS staffing needs. Further, some taxpayers may perceive that IRS efforts to collect taxes are not equitable based on the disparity between IRS gross receivables and amounts expected to be collected. This, in turn, could affect voluntary compliance with the tax laws.
