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3. Automatic Installment
Agreements
:
The IRS created automatic and
streamlined installment agreements
not out of a sense of charity but
because it made administrative sense
to let taxpayers with smaller balances
set up their own agreements and start
paying. Taxpayers can have an install-
ment agreement automatically, as long
as the liability is paid within five years
and they:
Owe less than $25,000,
Have filed all their tax returns, and
Have not had another installment
agreement within the last five years.
No additional information is required to
be provided by the taxpayer and no
collection division employees are tied
up analyzing the taxpayer's informa-
tion. The DRS should consider creating
a form for taxpayers to use to create a
similar process, therefore freeing up
the Collection and Enforcement
Division's employees to pursue taxpay-
ers with larger balances.
4. Financial Guidelines:
The current DRS process for determin-
ing whether to accept an Offer of
Compromise from a taxpayer is com-
pletely opaque to me. Installment
agreements are created not based on
the taxpayer's ability to pay but rather
by how long the DRS employee thinks
the payment plan should take to be
paid. This creates a very difficult situa-
tion where taxpayers are being
instructed to pay monthly amounts that
they do not have the means to pay.
This is both detrimental to the taxpay-
er, creating an incentive for the taxpay-
er to simply move out of state, and
adds needless time and aggravation to
an already stressful situation. Many
times taxpayers agree to such pay-
ment plans not because they believe
they can pay but rather simply to end
the stressful encounter with the DRS
collection personnel. Unfortunately,
such agreements are often defaulted in
short order because of the unrealistic
amount set for the agreement.
I believe the use of a standard set of
financial
guidelines,
with
some
allowance for flexibility, similar to those
used by the IRS would streamline the
process, create a standard for all the
various collection groups within DRS,
and allow the DRS to more quickly ana-
lyze and conclude agreements, allow-
ing them to deal with more taxpayers.
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Department of Revenue Collection Procedures
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