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IRS ignored tax scofflaws

WASHINGTON -- Struggling with rising workloads and stagnant staff levels, the Internal Revenue Service walked away from more than 2.2 million delinquent tax accounts last year, totaling nearly $16.5 billion, according to the Treasury Department.

In written answers to Senate Finance Committee questions, Deputy Treasury Secretary Samuel Bodman used the escalating delinquencies to renew a Bush administration push to bring private debt collectors into the IRS tax collection process. Many of the scofflaws would pay up if they were contacted by telephone, Bodman said.

''Fundamental fairness requires that . . . we have an effective program to collect outstanding tax liabilities," Bodman said in written testimony. ''We owe that much to the millions of Americans who do their best to pay their fair share."

Last year, the IRS opted not to pursue 2.25 million tax cases, costing the government $14.1 billion in individual income taxes and $2.3 billion in corporate taxes, the Treasury document states.

The median size of the delinquent accounts was $14,000. The largest account not being pursued was over $50 million.

''That the IRS has deferred collection on more than $16 billion in delinquent tax debt is but another example of one step forward, two steps back," said a written statement by Senator Max Baucus, Montana Democrat and ranking minority member on the Senate Finance committee. ''. . .The agency knows who owes these back taxes, but isn't taking the time to make the 30-cent phone call that could result in hundreds, thousands, or even millions of dollars in lost revenue."