The IRS has improved its coordination among offices to collect
approximately $45 million in delinquent payroll taxes owed by federal
government units, plus that owed by state and local governments, the
Treasury Inspector General for Tax Administration reported. The report
followed a 2002 TIGTA audit finding that more than 12,000 government
entities at all levels were delinquent in reporting or paying employment
taxes. TIGTA said then that the IRS Tax Exempt and Government Entities
Division, which contains the Federal, State and Local Governments
office, lacked an effective agreement with the Small
Business/Self-Employed (SB/SE) Division, which is responsible for
collecting delinquent employment taxes, including those of governmental
entities. Since then, a working group between the divisions and special
unit established by SB/SE to address federal government agencies has
helped, TIGTA said. Still, TIGTA said, the IRS should take additional
steps to identify and address reasons for the delinquencies, strengthen
case controls and develop strategies for dealing with federal fiscal
constraints upon paying prior-year debts from current-year
appropriations.
