WASHINGTON - The Office of Appeals at the Internal Revenue Service (IRS) should

improve its processing of Collection Due Process (CDP) cases, according to a new report

from the Treasury Inspector General for Tax Administration (TIGTA).

The Appeals office is independent of other IRS offices, and its mission is to resolve tax

controversies, without litigation, on a basis that is fair and impartial to both the Federal

Government and the taxpayer. The CDP Program allows taxpayers to appeal when the

IRS files a lien or a Notice of Intent to Levy for unpaid taxes. A taxpayer usually has 30

calendar days to request a CDP hearing. If a taxpayer's request for a CDP hearing is not

received within the allotted time period, the taxpayer, at the discretion of Appeals, might

be granted an Equivalent Hearing, but the taxpayer may not petition for a reversal if they

disagree with the results of those hearings.

TIGTA is required to determine annually whether the IRS complied with legal guidelines

and procedures for the filing of a lien or a Notice of Intent to Levy and the right of the

taxpayer to appeal.

TIGTA found that taxpayers did not always receive the appropriate type of hearing.

In its report, TIGTA found that Appeals did not always classify taxpayer requests

properly. On some taxpayer accounts, TIGTA found errors with the Collection Statute

Expiration Dates (CSED), which can potentially violate taxpayer rights or result in lost

revenue for the Government.

TIGTA found more errors related to the CSEDs on taxpayer accounts than during prior

audits. TIGTA estimated that 7,990 of the 37,289 CDP cases closed in Fiscal Year 2010

had an incorrect CSED.

Further, hearing officers did not always document their case files with all required

information, increasing the risk that the IRS has not met all the requirements of

applicable laws or administrative procedures with respect to the proposed levy or lien.

"Appeals must ensure that all its casework is handled accurately and timely, since any

lapse can affect a taxpayer's right to petition the United States Tax Court and the time

allowed for the IRS to collect any balances owed," said J. Russell George, the Treasury

Inspector General for Tax Administration.

TIGTA recommended that Appeals correct the inaccurate CSEDs identified in the audit

and develop a job aid for employees to assist in more accurately determining the correct

CSEDs. Appeals management agreed with TIGTA's recommendations.