The performance of the Internal Revenue Service’s Offers in Compromise Program — which allows strapped taxpayers to pay what they can, writing off the rest — has been mixed, but better management information and simplification could improve the program, the Government Accountability Office has said.
It said the program, which accepted 14,000 offers in 2005, improved timeliness for taxpayers making one offer to 5.8 months, but remained at a two-year average for those making repeat offers.
While quality goals have been met, the agency does not routinely track compliance and accessibility, and the cost per offer has increased because staffing has remained the same since fiscal 2003 even though offers have declined in number, according to GAO-06-525.
It said IRS management needs to better understand program performance, partly through measuring it, but noted that the agency only measures the time it takes to decide each offer rather than the time it takes to resolve the liability — meaning the timeframe from the taxpayer’s perspective.
IRS lacks compliance and accessibility trend data useful for assessing performance, the report said.
It said while the agency set numeric goals for timeliness and quality, the timeliness goals do not have a rationale and are not based on taxpayer needs or other benefits.
Further, the agency has not analyzed whether the decrease in offers accepted since fiscal 2003 reflects a decrease in accessibility of the program, or if the compliance program is having an effect, GAO said.
