Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: THURSDAY, March 22, 1990 TAG: 9003222583
SECTION: NATIONAL/INTERNATIONAL PAGE: A/2 EDITION: EVENING
SOURCE: Associated Press
DATELINE: WASHINGTON LENGTH: Medium
Money magazine suggested there is a 50-50 chance the Internal Revenue Service will make a mistake the next time it sends out a bill for additional taxes and penalties. The magazine said there is evidence that $7 billion of the $15.3 billion collected as a result of such letters last year was not really owed.
"That $15 billion, I think, is pretty much due and owing," Goldberg said today on ABC's "Good Morning America."
But, he added, "Sure, people pay money they may not owe. We make mistakes."
In the cover story of its April edition, Money cited a report by the General Accounting Office, interviews with tax lawyers and accountants and a survey of its subscribers to conclude that half the 36 million bills for taxes and penalties mailed out last year contained errors.
The form letters generated $15.3 billion last year, an average of $425 per notice, Money noted.
"Yet, behind that apparent triumph of tax law micro-enforcement lurks a sloppy little secret: a convincing case can be made that at least $7 billion of that money should never have been collected at all because around half of those imposing official notices were inaccurate," the magazine said.
"Clearly, individuals are caving in to questionable demands for more money that would propel them to the phone in a second if the bill came from some bank or credit-card company."
Although IRS officials quarreled with Money's figures, the agency acknowledges wholesale employee errors in answering taxpayers' telephoned questions and in processing returns.
In fact, Goldberg cited the processing errors in testimony before a House subcommittee earlier this month while pleading for money to modernize the agency's 1960s-vintage computer system.
Last month, Money polled 300 of its subscribers with a median income over $52,000 a year and found that at some time in their lives, half had received IRS bills for more taxes and penalties. Seven of 10 fought back.
"A stunning 45 percent of those who contested their notices report that the IRS claims were totally incorrect and an additional 24 percent said that they were at least partially wrong," the magazine wrote. "What's more, of those who challenged the IRS on their own, 53 percent wound up paying nothing and another 17 percent succeeded in getting the bill reduced."
Money blamed the IRS error rate on outmoded computers and poorly trained, low-paid workers.
by CNB