TaxProf Blog

Editor: Paul L. Caron, Dean
Pepperdine University School of Law

Wednesday, September 6, 2017

The (Lack Of) Human Touch In Collecting Taxes

The National Taxpayer Advocate Nina Olsen has a blog post here that is well worth your time to read.  It's about the Service's automated levy program called FPLP (Federal Levy Payment Program).  

One way the Service tries to collect unpaid taxes is by looking for people who owe the delinquent taxpayer money and snagging those payments.  That's called a levy.    FPLP is a computer program designed to snags payments owed by the federal government to delinquent taxpayers.  Now, some people consider it an irony that one hand of the federal government actually sends payments to many delinquent taxpayers who owe the federal government money. Notably, however, FPLP hits what are commonly viewed as "safety net" payments from Social Security and Federal Retirement programs.  So other people consider it an irony that one hand of the federal government would partially undo the safety net payments made by the other hand.

The deal with FPLP that bugs Nina is the lack of human touch.  It is totally computerized and, like all computerized collection tools, it does not distinguish between the "can't pay" delinquent taxpayer and the "won't pay" delinquent taxpayer.  The computer does not care whether a delinquent taxpayer is a veteran or not....or whether the delinquent taxpayer is otherwise an admirable person who has sacrificed in other ways for the common good (first responder, public safety officer, underpaid public school teacher, whatever).  Nor can the computer tell whether the particular delinquent taxpayer has just suffered from the death of a loved one, or had some other personal tragedy strike that throws the taxpayer into delinquency. 

True, the FPLP snags, at most, 15% of each payment but when you are poor enough, that hit can be huge.  And, true again, the Service has tried to code into the computers a "low income filter" so that the computers won't hit the payments made to certain taxpayers at the poverty line or not more than 250% above it.  

But Nina points out, rightly, that computer-based rules are always under-inclusive such that this low-income filter fails to prevent levies on some delinquent taxpayers---notably veterans---who we might want to be more forgiving.  Computers cannot made individualized decisions and that is what Nina laments when she writes "All taxpayers – especially those who are veterans -- deserve person-to-person interaction, or at least a good faith effort of personal contact, before the IRS levies their retirement payments."

Would someone please tell that to Congress so it can give the IRS a proper budget to hire humans? 

http://taxprof.typepad.com/taxprof_blog/2017/09/the-lack-of-human-touch-in-collecting-tax.html

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