The IRS is generally successful in its efforts to collect delinquent taxes from federal and military personnel and retirees, in part because there is a readily reachable source of payments going to them that can be garnisheed if necessary, according to the Treasury Inspector General for Tax Administration.
The report said that as of fiscal 2014, there were just above 300,000 people in that population who owed $3.5 billion in taxes—up about 14 percent and 3 percent, respectively, from 2010. In addition, nearly another 230,000 who owed nearly another $1.9 billion were paying back taxes through installment agreements.
The report did not break out federal versus military nor active versus retired persons in those figures, although it did specify that military retirees accounted for 30 percent of the total and 44 percent of the amount owed.
The report focused on the IRS Federal Employee/Retiree Delinquency Initiative, saying the program provides generally adequate controls and procedures to identify and resolve tax compliance issues in that population. Most cases are resolved as fully paid or through an installment agreement, it said.
It said that collection could be made even more effective by including more forms of federal payments among the potential sources of garnishment, to which management agreed. But management disagreed with a separate recommendation regarding the mechanics of processing some of the cases.
