IRS collections dropped by $1.3 billion in fiscal 1999, the Associated Press reported Friday, in part because recent reform laws are beginning to impact the agency's bottom line.
As new laws overhauling the agency's organization took effect, enforcement collections against major delinquent taxpayers dropped from approximately $7.8 billion in 1998 to $6.5 billion in 1999.
Only 504,403 levies on delinquent taxpayers' bank accounts were made in 1999, compared with 2.5 million the previous year. In addition, property seizures fell from 2,300 in 1998 to 161 in 1999.
The IRS Reform and Restructuring Act of 1998 gave broader rights to taxpayers, made IRS collection agents more accountable for their cases and increased punishments for violations of taxpayer's rights.
Confusion and some fear among agents over the new laws, combined with a steady payroll reduction of IRS employees resulted in fewer audits and fewer collections this year, the AP reported.
In July, IRS Commissioner Charles Rossotti predicted that the number of audits and collection actions would drop by 30 to 40 percent in 1999 over what they were two years ago. Until now, there was uncertainty as to how such a decline would impact IRS revenues.
NEXT STORY: People: Software expert lands at FAA