A Significantly Reduced Automated Substitute for Return Program Negatively Affected Collection and Filing Compliance

The Director, Collection, Small Business/Self-Employed (SB/SE) Division, should reassess the decisions to suspend the ASFR Program, including the reduction of TDI inventory and the reassignment of ASFR staff. The reassessment should weigh the benefits of processing other types of correspondence against the negative consequences to tax compliance, such as not pursuing high-net tax due nonfilers and the significant reduction in subsequent voluntarily filed returns.

The Director, Collection, Small Business/Self-Employed (SB/SE) Division, should revise the ASFR case selection strategy to prioritize more high-net tax due and repeat nonfiler cases, both of which constitute a significant tax compliance risk.

The Director, Collection, Small Business/Self-Employed (SB/SE) Division, should reverse the policy of working only the most current tax year for high-net tax due cases to working all delinquent tax years.

The Director, Collection, Small Business/Self-Employed (SB/SE) Division, should extend the six-month Refund Hold deadline for started cases in the ASFR Program by an adequate period of time that would ensure that refunds are held until the delinquency is resolved.

The Director, Collection, Small Business/Self-Employed (SB/SE) Division, should incorporate prior filing information, including allowable exemptions, deductions, and credits, into the nonfiler case creation process for ASFR inventory selection purposes.