Senators seek to streamline IRS tax lien system
A recent GAO report that found the government is owed $58 billion in payroll taxes fuel debate.
A Government Accountability Office report that 1.5 million businesses owe the government about $58 billion in payroll taxes shows the need for legislation streamlining the IRS' tax lien system, Senate Homeland Security and Governmental Affairs Investigations Subcommittee Chairman Carl Levin, D-Mich., said Tuesday.
In a report released Monday, GAO said debts by companies that withheld money from employees for taxes but never sent the funds to the IRS has grown about $10 billion in a decade. That occurred even as the number of debtors has dropped slightly. GAO said the number of companies in arrears for five or more years has grown sharply.
At a hearing Tuesday, Levin and Investigations Subcommittee ranking member Norm Coleman, R-Minn., faulted the IRS for moving slowly to put liens on companies that ignore notices about payroll tax debt. Levin is the sponsor of a measure requiring the Treasury Department to establish a federal electronic tax lien registry.
He said the IRS estimates his bill would save $570 million over 10 years by replacing a system where paper liens must be filed at 4,000 local locations. Levin said Treasury concerns about details of the bill are slowing it in the Senate Finance Committee but said the measure faces no large obstacles. IRS Deputy Commissioner Linda Stiff told the subcommittee the IRS is still adjusting to a 1998 reorganization that has hampered enforcement. Stiff noted the IRS collects 99.8 percent of tax debts, but said, "We believe leaving $58 billion on the table is unacceptable."