Here’s how badly the IRS is doing at collecting…

Why should anyone be afraid of tax resistance? The Picket Line gives us the lowdown on the statistics: the IRS can’t collect for shit, and they are incompetent fools.

Between 2002 and 2007, the IRS asessed $10 million in penalties against professional tax preparers for various forms of preparer misconduct.  But the agency only managed to collect $2 million of this $10 million.

For tax year 2006, the IRS identified more than 1.2 million cases in which someone failed to file a tax return even though they had taxable income. In cases like these, the IRS creates a substitute tax return for the person, which (usually) results in a “default assessment.”  But, “the IRS collected just under two percent of the taxes assessed through the automated process, a sign that this method is not increasing filing and
payment compliance.”  The IRS responds: “We… do not agree with the suggestion that dollars collected is the best measure of the effectiveness of these assessments. Each assessment abated or adjusted reflects the submission of a return or other response by the taxpayer after the ASFR default assessment has been made — a clear indication the taxpayer has been successfully brought into compliance.”

The IRS reported 18% more “Taxpayer Delinquent Accounts” in 2007 than in 2006.  81% of these accounts involved tax years before 2004, and many are “inactive.”

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One thought on “Here’s how badly the IRS is doing at collecting…

  1. [...] Being robbed is a situation where one’s life is at risk. Not paying taxes, on the other hand, rarely carries penalties with it. Only high-profile cases go to trial and entail non-financial risks. The main factors that [...]

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