Summary: GAO testified before Congress in 1992 that the Internal Revenue Service's (IRS) controls over seized property fell short in protecting against theft, waste, and misuse and that controls over sales practices did not necessarily guarantee the highest sales price at the lowest cost. (See GAO/T-GGD-92-65, Sept. 1992.) GAO also indicated that asset management and sales could best be done by specialists rather than by revenue officers, whose primary responsibility is to collect unpaid taxes. Since then, Congress has passed legislation requiring IRS to remove revenue officers from participating in asset sales by July 2000. The legislation also encouraged IRS to contract out this job. GAO found that, as of October 1999, IRS had not finalized plans for removing revenue officers from its process for selling seized assets. A GAO review of a nationwide sample of seizure cases found that basic internal control weaknesses cited in 1992 persist. Regardless of whether seized assets are done "in-house" by an IRS specialist or by a private contractor, IRS must have controls to provide accountability over seized assets, security for those assets, sales practices that protect the interests of the government and taxpayers, and information to assist management oversight. Without these controls, the interests of taxpayers who have their assets seized may suffer--for example, from asset sales that fail to maximize net proceeds
