IRS CASE 

SELECTION

Automated Collection 

System Lacks Key 

Internal Controls 

Needed to Ensure the 

Program Fulfills Its 

Mission

Report to Congressional Requesters

September 2015

GAO-15-744

United States Government Accountability Office
Highlights of GAO-15-744, a report to 

congressional requesters.

September 2015

IRS CASE SELECTION

Automated Collection System Lacks Key Internal 

Controls Needed to Ensure the Program Fulfills Its 

Mission

Why GAO Did This Study

IRS’s ACS is one of the primary means 

for pursuing taxpayers who failed to 

fully pay their taxes or file their tax 

return in a timely manner. From fiscal 

years 2012 through 2014, ACS staff 

has declined 20 percent while the 

number of unresolved collection cases 

at year-end has increased 21 percent. 

Given these trends, IRS must make 

informed decisions about the collection 

cases it pursues to ensure the program 

is meeting its objectives and mission.

GAO was asked to review the ACS 

process for prioritizing and selecting 

collection cases. This report (1) 

describes the ACS process to prioritize 

and select collection cases and the 

results of that process for fiscal year 

2014, and (2) determines how well the 

ACS case prioritization and selection 

process supports the collection 

program mission and objectives. GAO 

reviewed IRS guidance, processes,

and controls for prioritizing and 

selecting collection cases, reviewed 

ACS data, assessed whether IRS’s

controls followed Standards for Internal 

Control in the Federal Government, 

and interviewed IRS officials.

What GAO Recommends

GAO recommends that IRS take four

actions to help ensure the collection 

program meets its mission, such as 

establishing, documenting, and 

implementing objectives for the 

collection program and ACS, and 

establishing, documenting, and 

implementing procedures to complete 

periodic evaluations of the ACS case 

prioritization and selection process. In 

commenting on a draft of this report, 

IRS said it generally agreed with all of 

GAO’s recommendations.

What GAO Found

The Internal Revenue Service’s (IRS) Automated Collection System (ACS) has a 

multistep, automated process to prioritize and select cases of unpaid taxes and

unfiled tax returns to pursue. ACS assesses cases to determine the order to work 

cases based on IRS’s collection program priorities, the likelihood the case will be 

resolved, and the type of tax and amount owed. ACS also reviews cases to 

determine what action to take based on whether a levy source or contact 

information is known for taxpayers. ACS will then contact taxpayers according to 

its assigned priority and may issue a levy or lien against the taxpayer.

ACS managers balance cases worked to ensure ACS achieves its case closure 

and taxpayer service measures. These decisions include how many notification 

and enforcement actions to take and how many cases to assign to IRS staff so 

that cases are worked in a timely manner. About half of the cases closed in ACS 

in fiscal year 2014 were high priority, including such issues as employers not 

paying federal employment taxes. Of the 3.5 million cases closed or transferred 

out of ACS in fiscal year 2014, IRS collected almost $6.2 billion. IRS generally 

had more success in collecting from individual taxpayers than from business 

taxpayers. However, because IRS has not identified objectives for the collection 

program and ACS, it is difficult to assess the program’s overall effectiveness.

ACS has processes for managing risk and reviewing performance, but has not 

implemented other key internal controls. This increases the risk that the 

collection program’s mission of fair and equitable application of the tax laws will

not be achieved. GAO identified deficiencies in the following internal control 

areas.

Collection program and ACS objectives, and key term of fairness are not 

defined: IRS officials responsible for the collection program and ACS were 

unable to produce documentation of collection program or ACS objectives. 

Although fairness is specified in the collection mission statement, IRS has not 

defined or operationalized it in any ACS or collection program documents. In the 

absence of clearly documented objectives and a clearly communicated definition 

of fairness, IRS cannot know how well ACS contributes to the collection program 

mission and ensure the case prioritization and selection process is fair. The lack 

of clearly articulated objectives undercuts the effectiveness of IRS efforts to 

assess risks and monitor ACS performance.

ACS case prioritization and selection process is not documented: IRS has 

little formal documentation that describes the ACS prioritization and selection 

process. Without adequate documentation, it is difficult for IRS to determine 

whether the ACS case prioritization and selection process effectively supports

the collection program mission.

Effectiveness of ACS process is not periodically evaluated: IRS has no 

procedures for periodically evaluating the ACS case prioritization and selection 

process and has not acted on implementing recommendations from a recent ad

hoc study. Given that key components of the ACS process have remained 

relatively unchanged since its creation, IRS may be missing opportunities to 

better prioritize its workload, which could improve collection results.

View GAO-15-744. For more information, 

contact James R. McTigue, Jr. at (202) 512-

9110 or mctiguej@gao.gov.

United States Government Accountability Office
Letter 1

Background 3

Case Selection Is Mostly Automated, and Priority Cases 

Accounted for Half of ACS’s Closed Cases in Fiscal Year 2014 8

ACS Objectives Are Unclear, and IRS Lacks Key Documentation 

of and Procedures for Evaluating Case Prioritization and 

Selection 21

Conclusions 30

Recommendations for Executive Action 30

Agency Comments and Our Evaluation 31

Appendix I Objectives, Scope, and Methodology 34

Appendix II Automated Collection System (ACS) Overview 38

Appendix III Automated Collection System (ACS) Data on Nonfiler Closed Cases, 

Fiscal Year 2014 45

Appendix IV Automated Collection System (ACS) Data on Balance Due and 

Nonfiler Case Closures, Partial Fiscal Year 2015 48

Appendix V Comments from the Internal Revenue Service 52

Appendix VI GAO Contact and Staff Acknowledgments 56

Tables

Table 1: Overview of ACS Special Inventories 11

Table 2: Cases Closed in ACS by Type of Inventory, Fiscal Year 

2014 18

Table 3: ACS Notification and Enforcement Actions, Fiscal Years 

2012 to 2014 44

Contents

Page i GAO-15-744 Automated Collection System
Table 4: Distribution of Closed Nonfiler ACS Cases by Number of 

Years Open, Fiscal Year 2014 47

Table 5: Types of Closures of ACS Balance Due Cases by Priority 

Level, Partial Fiscal Year 2015 48

Table 6: Types of Closures of ACS Nonfiler Cases by Priority, 

Partial Fiscal Year 2015 49

Table 7: Average and Median Number of Days ACS Balance Due 

Cases Open by Priority Level, Partial Fiscal Year 2015 50

Table 8: Average and Median Number of Days ACS Nonfiler 

Cases Open by Priority Level, Partial Fiscal Year 2015 51

Figures

Figure 1: IRS Collection Process 5

Figure 2: ACS Prioritization and Selection Process 10

Figure 3: ACS Process for Assigning a Priority Level to Business 

Cases 14

Figure 4: Cases Closed in ACS by Priority and Case Type, Fiscal 

Year 2014 17

Figure 5: Types of Closures of High Priority Balance Due Cases in 

ACS, Fiscal Year 2014 20

Figure 6: Overview of ACS 39

Figure 7: ACS Process for Assigning a Priority Level to Individual 

Cases 40

Figure 8: How ACS Cases Are Prioritized and Sorted Within a 

Function Unit 41

Figure 9: ACS Call Site and Support Site Locations 43

Figure 10: Types of Closures of ACS Individual Nonfiler Cases by 

Priority, Fiscal Year 2014 45

Figure 11: Types of Closures of ACS Business Nonfiler Cases by 

Priority, Fiscal Year 2014 46

Figure 12: Number of Days That Closed ACS Nonfiler Cases 

Were Open, Fiscal Year 2014 47

Page ii GAO-15-744 Automated Collection System
Abbreviations

ACS Automated Collection System 

CAR Collection Activity Report

CWOP Collection Workload Optimization Project

ERM Enterprise Risk Management

FERDI Federal Employee/Retiree Delinquency Initiative

GPRAMA Government Performance and Results Act 

 Modernization Act of 2010

IDS Inventory Delivery System

IRM Internal Revenue Manual

IRS Internal Revenue Service

SB/SE Small Business/Self Employed Division

W&I Wage & Investment Division

This is a work of the U.S. government and is not subject to copyright protection in the 

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Page iii GAO-15-744 Automated Collection System
441 G St. N.W.

Washington, DC 20548

September 10, 2015

The Honorable Paul Ryan

Chairman

Committee on Ways and Means

House of Representatives

The Honorable Peter Roskam

Chairman

Subcommittee on Oversight

Committee on Ways and Means

House of Representatives

The Internal Revenue Service (IRS) pursues taxpayers with unpaid tax

debts and delinquent returns to help ensure compliance and confidence 

in the tax system. This helps to address the tax gap—the estimated 

difference between the amount of taxes that taxpayers pay voluntarily and 

on time and those they owe. IRS estimated that for tax year 2006, the 

$450 billion gross tax gap included $46 billion due in delinquent tax 

liabilities and $28 billion due in unfiled tax returns.1

One of the primary means by which IRS pursues delinquent taxpayers is 

through the Automated Collection System (ACS). In fiscal year 2014, 

ACS collected almost $6.2 billion in delinquent federal revenue. ACS is 

largely a call center operation that uses automated calls and letters to 

remind taxpayers of their tax delinquency. ACS also handles incoming 

calls from taxpayers responding to delinquency notices and enforcement 

actions. ACS has experienced significant declines in staffing, with fulltime equivalents decreasing by 20 percent (from 3,672 to 2,932) from 

fiscal years 2012 through 2014.2 Over the same period, the number of 

1

The remaining and most significant portion of the gross tax gap, $376 billion, comes from 

underreporting, or not reporting the full tax liability on a timely-filed return. IRS estimates 

that it will eventually recover about 14 percent ($65 billion) of the gross tax gap through 

late payments and enforcement actions, including collection. See GAO’s key issues page 

for additional information on the tax gap: 

http://www.gao.gov/key_issues/tax_gap/issue_summary.

2

A full time equivalent is the equivalent of one staff person working full-time for a year. In 

fiscal year 2014, ACS staff made up 26.4 percent of IRS collection program staff.

Letter

Page 1 GAO-15-744 Automated Collection System

 
unresolved collection cases at the end of each year increased by 21 

percent (from 4.2 million to 5.1 million). As workload and staffing move in 

opposite directions, IRS must decide which cases to prioritize over others 

to ensure ACS carries out the IRS collection program mission through the 

fair and equitable application of the tax laws.

In light of these issues, you asked us to review the IRS process for 

prioritizing and selecting collection cases to pursue in ACS.3 This report 

(1) describes the ACS process to prioritize and select collection cases 

and the results of that process for fiscal year 2014; and (2) determines 

how well the ACS case prioritization and selection process supports the 

collection program mission and objectives. This report is part of a larger 

body of our work on case selection across IRS.4

For the first objective, we reviewed IRS documents, to the extent they 

were available, that describe the process for ACS case prioritization and 

selection. These documents include the Internal Revenue Manual (IRM), 

program documents, IRS reports, and presentations prepared by IRS 

staff. We visited an ACS call site in Philadelphia twice to review the ACS 

process, including how ACS collection cases are managed, and to 

observe taxpayer calls with IRS collection representatives. In addition, we 

analyzed IRS collection reports on the scope and scale of ACS 

operations and performance measures for fiscal years 2012 through 

2014. We interviewed IRS officials responsible for overseeing the ACS

case prioritization and selection process, as well as IRS officials 

responsible for the overall IRS collection program. Finally, we analyzed 

data on collection cases closed in ACS in fiscal year 2014 (the most 

recent full fiscal year available). This entailed describing the number of 

ACS collection cases by type of taxpayer, type of delinquency, case 

3

Former House Committee on Ways and Means Chairman Dave Camp also requested 

that GAO conduct this work.

4

GAO, IRS Case Selection: Collection Process Is Largely Automated, but Lacks Internal 

Controls, GAO-15-647 (Washington, D.C.: July 29, 2015) and IRS Examination Selection: 

Internal Controls for Exempt Organization Selection Should Be Strengthened, 

GAO-15-514 (Washington, D.C.: July 13, 2015).

Page 2 GAO-15-744 Automated Collection System

 
priority, type of case closure, and average and median number of days 

cases were open in ACS.5

For the second objective, we reviewed ACS procedures, IRM sections, 

IRS reports, and related internal controls intended to help the IRS 

collection program achieve its mission and program objectives. We 

reviewed similar documentation to determine whether procedures are in 

place to periodically monitor, evaluate, and review the ACS prioritization 

process. To determine IRS’s definition of fairness as it applies to 

collection activities, we reviewed the ACS procedures and process for 

case prioritization and selection. We also interviewed relevant IRS 

officials concerning their understanding of the mission, objectives, and 

internal controls of the collection program and ACS, and about the extent 

to which procedures exist to monitor ACS case prioritization and 

selection. We then assessed whether the procedures aligned with 

relevant Standards for Internal Control in the Federal Government.

6

For the purposes of this review, we determined that the data used in our 

analysis were reliable. Our data reliability assessment included reviewing 

relevant documentation, interviewing knowledgeable IRS officials, and 

reviewing the data to identify obvious errors or outliers. For additional 

details on our scope and methodology, see appendix I.

We conducted this performance audit from October 2014 to September 

2015 in accordance with generally accepted government auditing 

standards. Those standards require that we plan and perform the audit to 

obtain sufficient, appropriate evidence to provide a reasonable basis for 

our findings and conclusions based on our audit objectives. We believe 

that the evidence obtained provides a reasonable basis for our findings 

and conclusions based on our audit objectives.

The mission of IRS’s collection program, as set forth in the fiscal year 

2015 collection program letter, is “to collect delinquent taxes and secure 

5

Appendix IV also presents partial fiscal year 2015 results as of February 28, 2015. For 

our data analysis, business taxpayers include individual taxpayers who report business 

income and losses, as well as corporations and businesses remitting employment taxes. 

See appendix I for more details.

6

GAO, Internal Control: Standards for Internal Control in the Federal Government, 

GAO/AIMD-00-21.3.1 (Washington, D.C.: Nov. 1, 1999).

Background

Page 3 GAO-15-744 Automated Collection System

 
delinquent tax returns through the fair and equitable application of the tax 

laws, including the use of enforcement tools when appropriate, provide 

education to customers to enable future compliance, and thereby protect 

and promote public confidence in the American tax system.”7

IRS collects unpaid tax debts through a complex, three-phase process: 

(1) a notice phase, (2) a telephone phase (ACS), and (3) an in-person 

phase (Field collection).8 While these phases are not necessarily 

sequential (for example, a case could go directly from the notice phase to 

Field collection), with few exceptions every collection case is required to 

go through the notice phase.9

Of cases initiated in fiscal year 2014, more than two-thirds were resolved 

in the notice phase. If a case is not resolved during the notice phase, it is 

sent to the automated Inventory Delivery System (IDS), where the next 

step is determined.10 IDS will (1) identify and filter out uncollectible cases 

(i.e., removed from active collection status through a process known as 

shelving), (2) categorize some cases as high risk, and (3) determine 

7

The IRS collection program letter is a key organizational document for the collection 

program. It includes information on the IRS collection program mission, prior year 

accomplishments, and the collection program’s actions that align with IRS’s strategic plan. 

The IRS collection program’s mission closely aligns with the IRS-wide mission, as set forth 

in the IRS Strategic Plan for fiscal years 2014 to 2017. The IRS-wide mission is to 

“provide America’s taxpayers top-quality service by helping them understand and meet 

their tax responsibilities and enforce the law with integrity and fairness to all.” See Internal 

Revenue Service, Strategic Plan FY2014-2017 (Washington, D.C.: 2014). 

8

In Field collection, IRS revenue officers attempt in-person contact with taxpayers to 

prompt a payment or take enforcement action similar to those taken in the telephone 

contact phase (e.g., imposing levies or seizing financial assets). 

9

We reported on the notice phase in 2009. GAO, Tax Debt Collection: IRS Needs to 

Better Manage the Collection Notices Sent to Individuals, GAO-09-976 (Washington, D.C.: 

Sept. 30, 2009).

10In the notice phase and in IDS, collection cases are counted on a module basis. A 

module represents one taxpayer delinquency over one tax period. A taxpayer may have 

multiple delinquent modules outstanding with IRS at the same time. Collection cases are 

sent to ACS on a module basis, but once received within ACS, the modules are either 

added to an existing case on that taxpayer, which may include more than one module, or 

a new taxpayer case is established. In our report, we will generally refer to ACS collection 

cases on a taxpayer basis. If so, we will differentiate those data. In fiscal year 2014, on 

average, each ACS case had two modules. For more information on IDS, see GAO, IRS 

Case Selection: Collection Process Largely Automated, but Lacks Adequate Internal 

Controls, GAO-15-647 (Washington, D.C.: July 29, 2015). 

Page 4 GAO-15-744 Automated Collection System

 
whether cases should be routed to either ACS or Field collection to 

potentially be worked.11 See figure 1.

Figure 1: IRS Collection Process

Notes: The Field queue is a holding area for cases for potential selection in Field collection for 

assignment to a revenue officer. Cases can also be resolved without IRS collections actions if, for 

example, the taxpayer paid the amount owed or filed a missing return during the notice phase, or 

while the taxpayer’s case was awaiting assignment in the queue.

11IDS has several internal processes that support the three functions cited. For example, 

IDS “grades” cases. Grading determines the complexity of a case for potential assignment

to a revenue officer in Field collection. Revenue officers with higher skill levels and 

expertise are assigned more complex cases. The grading rules are established in IRM as 

a product of union negotiations for employee assignment and workload management.

Page 5 GAO-15-744 Automated Collection System

 
To make these determinations, IDS considers hundreds of factors about a 

case while carrying out two activities that facilitate closures, prioritization, 

and routing:

• Modeling is a statistical process that analyzes the results of 

previously closed cases to predict likely case outcomes. In IDS, this 

process helps determine if a case should be shelved if a model 

predicts it would not be collectible.

• Risking determines whether a case is high risk and influences case 

routing and shelving decisions. For example, cases where a taxpayer 

owes a large amount of money would be considered high risk and 

would be a priority for selection.

The outputs from the modeling and risking activities are used in 

conjunction with hundreds of business rules to determine where to route 

cases for further collection actions.12 For cases routed to ACS and Field 

collection, the predictive modeling results from IDS are transmitted and 

used again to further prioritize cases. Cases are sent to ACS for several 

reasons, the two most common of which, based upon IRS data, are:

• Taxpayer case already established in ACS: Taxpayer already has 

one or more delinquency issues that are being pursued in ACS.13

• Default routing rules: No other IDS rule for routing cases to Field 

collection or for shelving cases proves applicable, and therefore by 

default the module is sent to ACS.14

12Other factors are also considered and can lead to cases not being processed for further 

collection actions. For example, the business routing rules test whether the taxpayer is 

currently in bankruptcy. Under the IRS Restructuring and Reform Act of 1998, a taxpayer 

may bring suit against the IRS for taking further collection actions (like levying a taxpayer’s 

wages or putting a lien on property) if there is a willful violation of certain bankruptcy 

procedures, or for other reasons such as reckless, intentional, or negligent disregard of 

certain limitations placed on IRS employee behavior during collection actions. Pub. L. No. 

105-206, 112 Stat. 685, 730-31 (July 22, 1998). IDS business routing rules may also route 

cases to IRS’s Locator Services System if there is not enough information to contact or 

locate the taxpayer. This may occur if previous taxpayer correspondence has been 

returned as undeliverable or IRS does not have a valid telephone number for the taxpayer. 

Locator Services System performs research on taxpayer addresses and telephone 

numbers. 

13Whenever IDS recognizes that a collection module is associated with a taxpayer case 

already assigned to ACS, that module is sent to ACS to be joined with the collection case 

on that taxpayer, thus adding another module to the taxpayer’s existing collection case.

Page 6 GAO-15-744 Automated Collection System

 
Once a collection case is sent to ACS, it is either established as a new 

case or added to an existing case on a taxpayer. IRS pursues ACS 

collection cases by taking one or more actions, including reminding 

taxpayers of their tax delinquency through automated outgoing calls and 

letters, as well as placing liens on property or levying wages or assets. 

These actions may prompt taxpayers to call ACS to attempt to resolve 

their cases. If collection cases in ACS do not contain up-to-date contact 

information for the taxpayer, or information about sources that IRS could 

levy, IRS collection representatives will search for such information. If 

they find it, the case enters the pool of cases on which a potential action 

could be taken.

ACS attempts to resolve two types of collection delinquencies: (1) 

balance due cases, in which a taxpayer has a tax liability to IRS, and (2) 

nonfiler cases, in which a taxpayer has an unfiled return.15 One case may 

include both types of delinquencies.

Balance due cases can be resolved by the taxpayer paying the 

outstanding tax debt in full, or arranging with IRS to pay the full or partial 

outstanding tax debt over time (known as an installment agreement). 

However, these cases could also be closed as currently not collectible if 

ACS collection representatives are unable to locate or contact the 

taxpayer, or if the taxpayer is facing economic hardship or unable to pay, 

among other reasons.16 Some cases closed as currently not collectible 

may reenter the collection inventory if IRS determines that in the future, 

the taxpayer will be able to pay some of the tax debt.

Unfiled return cases may be resolved if the taxpayer files the delinquent 

return, or if the taxpayer is no longer liable for the unpaid taxes during the 

period in question, among other reasons. If the collection case is 

14Cases may be routed to ACS for a myriad of other reasons, such as the taxpayer’s 

being a federal employee or retiree.

15The tax debt inventory generally originates from one of three sources: (1) a tax return 

with a balance due, (2) an IRS program to collect taxes from individuals or businesses 

who did not file a return (nonfilers), or (3) an IRS assessment of additional tax liability after 

an action on a filed tax return, such as an audit.

16Each tax assessment has a collection statute expiration date of 10 years after the 

assessment. See IRM Part 5, Chapter 16, Section1, for a complete list of reasons why a 

collection case could be closed as currently not collectible and IRM Part 5, Chapter1,

Section19, for additional details on the collection statute expiration date. 

Page 7 GAO-15-744 Automated Collection System

 
unresolved by ACS, it may move to Field collection to be pursued further, 

or it could be shelved.

In November 2014, IRS began realigning collection operations across its 

Wage & Investment (W&I) and Small Business/Self-Employed (SB/SE) 

business operating divisions. According to IRS, the realignment will 

increase efficiency, reduce redundancies, and position IRS to improve 

identification of emerging compliance issues. Previously, ACS operations 

were split with W&I handling collections against individual taxpayers, and 

SB/SE handling individuals with business income and losses as well as 

all business entity taxpayers. As part of the realignment, IRS is 

consolidating all ACS call and support sites within SB/SE.17 At least 

through fiscal year 2015, ACS will operate separate phone numbers for 

W&I and SB/SE, and all sites will continue to handle the same type of 

taxpayers as they did prior to the realignment.18 IRS officials said that 

they plan to consolidate the management of its telephones by fiscal year 

2016 to align with the new organizational structure.

17Post realignment, SB/SE handles collection cases that originate from all of IRS’s 

business operating divisions, including W&I, SB/SE, the Large Business and International 

division, and the Tax-Exempt/Government Entities division.

18ACS call sites receive taxpayer calls and research collection cases while support sites 

assist the call sites by resolving written correspondence from taxpayers, taxpayer 

representatives, and third-party contacts. See appendix II for the locations of ACS call and 

support sites.

Case Selection Is 

Mostly Automated, 

and Priority Cases 

Accounted for Half of 

ACS’s Closed Cases 

in Fiscal Year 2014

Page 8 GAO-15-744 Automated Collection System

 
The ACS prioritization and selection process consists of three steps, as 

shown in figure 2. These steps are automated—that is, they do not 

involve manual intervention—and occur within seconds of each other. IRS 

managers responsible for ACS case prioritization and selection cannot 

change these steps without guidance from IRS collection program 

executives and input from IRS’s information technology staff. Overall, the 

ACS prioritization and selection process is set up so that high-priority 

cases are worked first. These include IRS program collection priorities 

and cases that have a greater potential to result in full payment or an 

installment agreement based on IRS’s predictive models discussed 

above. Documentation of the process is limited (an issue we discuss later 

in this report); therefore we based our description below largely on our 

reviews of the documentation that does exist, on multiple interviews with 

IRS officials, and on our observations during two visits to the ACS call site 

in Philadelphia.19

19See appendix II for additional information on ACS and its case prioritization and 

selection process. 

ACS Uses Case 

Characteristics and 

Predictive Models to 

Prioritize Cases for 

Selection through a 

Multistep Process

Page 9 GAO-15-744 Automated Collection System

 
Figure 2: ACS Prioritization and Selection Process

The first step in the ACS prioritization and selection process is to assign a 

case to one of three inventory groups: (1) special inventories, (2) model 

priority inventories, and (3) the general population inventory.

During this step, ACS first assesses cases to determine whether they fall 

within one of ACS’s five special inventories, four of which align with IRS’s 

collection program priorities. ACS will look at the case characteristics, 

such as from which IRS division the case originated, to assign it to a 

special inventory. ACS works all but one of the special inventories at 

specific call sites where staff possess the expertise to work the cases. 

See table 1.

Case Assigned to Inventory and Risk 

Category

Page 10 GAO-15-744 Automated Collection System
Table 1: Overview of ACS Special Inventories

ACS Special Inventory Description 

Collection

Program Prioritya DedicatedACS Call Site

Large business cases with 

a balance due

IRS Large Business and International division taxpayers, 

which include corporations with assets greater than $10 million 

and may conduct business internationally.

Yes Yes

High-income nonfiler 

cases

Taxpayers with estimated high incomes who have not filed 

their tax returns.

Yes Yes

Federal employee and 

retiree cases

The IRS Federal Employee/Retiree Delinquency Initiative 

(FERDI), involves cases to promote federal tax compliance 

among current and retired federal employees, taxpayers who 

receive certain Social Security and railroad board benefits, and 

federal agency vendors.b

Yes Yes

Delinquent employer 

payroll taxpayers (Trust 

fund cases)

Cases where employers have not complied with requirements 

to remit withholding and employment taxes on wages paid to 

their employees.c

Yes No

International Cases Business and individual taxpayers who have an address 

abroad.

No Yes

Source: IRS documentation and IRS officials. | GAO-15-744

Notes:

a

There is an additional IRS collection program priority in ACS of taxpayers (individuals and small 

businesses) with large dollar delinquent accounts but it is not a special inventory in ACS.

b

IDS automatically routes all non-IRS employee FERDI cases to a dedicated ACS unit, and IRS 

employee cases are worked by Field collection. IRM Part 5, Chapter19, Section18.

c

The quarterly nonpayment of employer payroll taxes can involve “pyramiding”—a fraudulent practice 

where a business withholds taxes from its employees but intentionally fails to remit them to IRS. Trust 

fund taxes include employment taxes, income taxes withheld from employees’ wages, and certain 

types of excise taxes. A Trust Fund Recovery Penalty arises against those persons deemed 

responsible when these monies are not paid as required. Employers file returns for trust funds 

quarterly using form 941 or annually using form 944. ACS works trust fund cases across its seven 

SB/SE call sites.

Next, ACS assesses the remaining cases to determine whether they 

qualify for assignment to one of the business model priority inventories.20

These inventories contain cases that IRS predicts as having a probability 

of resulting in full payment or installment agreements, among other 

outcomes. To make this determination, ACS uses the predictive model 

scores generated by IDS.21 If the model score on the case is above a 

20There are 12 W&I model priority inventories.

21Each module received in ACS has a number of predictive model scores, which assign 

the probability of a specified outcome of the case. For balance due modules, IDS 

transmits 10 model scores to ACS for use. For nonfiler modules, IDS transmits 2 model 

scores. 

Page 11 GAO-15-744 Automated Collection System

 
specified threshold, ACS will assign the case to the corresponding model 

priority inventory. ACS assigns any remaining cases not placed into one 

of the special inventories or model priority inventories to the general 

population inventory.

Simultaneously with these actions, ACS assigns each case a risk 

category of high, medium, or low.22 ACS bases this assignment on the 

case’s characteristics, such as its age, the dollar value of the outstanding 

balance, and the type of return the taxpayer filed or failed to file, among 

others. According to IRS officials, the risk categories have remained 

largely unchanged since their inception in 2000.23 Many of the risk 

categories contain dollar thresholds, which have also remained 

unchanged; for example, if a taxpayer has a delinquent balance due that 

is within or above a specified amount, ACS will assign it to the 

corresponding risk category. In addition, ACS uses risk categories to 

determine how long to retain cases in ACS before sending them to the 

queue or shelving them. ACS sends high- and medium-risk cases to the 

queue after 26 weeks. Low-risk cases are not sent to the queue but are 

shelved after 104 weeks. IRS officials said that ACS retains low-risk 

cases for longer because ACS staff have to work through high- and 

medium-risk cases before they can get to low-risk cases. These officials 

added that if low-risk cases are not resolved in ACS and subsequently 

sent to the queue, it is unlikely that they would get worked by revenue 

officers in Field collection.

22Each risk category has multiple sub-categories. In SB/SE there are 14 sub-categories 

within the high-risk category, 10 sub-categories within the medium-risk category, and 8 

sub-categories within the low-risk category; in W&I these totals are 10, 16, and 8, 

respectively. Cases in ACS are re-risked weekly, and if a case has received a new 

module, or if the taxpayer has provided additional information in the interim, the risk 

category may change. 

23IRS stated that in 2000 it hired a contractor to develop a risk-based collection concept 

similar to the one used in private debt collections.

Page 12 GAO-15-744 Automated Collection System

 
After ACS assigns a case to an inventory and a risk category, the case 

receives a priority level, which determines the order in which ACS works 

the case within each inventory. ACS uses the assigned inventory, risk 

category, and the predictive model scores unique to each case to assign 

it a priority level.24 Figure 3 illustrates how ACS sets the priority level for 

business taxpayers. The ACS process for setting the priority level for 

individual taxpayers is similar except that it prioritizes high-income 

nonfiler and FERDI cases, among others, first. Following the IRS 

realignment, which is consolidating all ACS call sites within SB/SE, IRS 

officials said that their goal is to integrate the case prioritization and 

selection processes used for SB/SE and W&I into one approach during 

fiscal year 2016.

24The priority level can range from 0 to 5, with 0 being the highest priority.

Case Assigned Priority Level

Page 13 GAO-15-744 Automated Collection System

 
Figure 3: ACS Process for Assigning a Priority Level to Business Cases

Notes: Taxpayers that fall under the responsibility of the IRS Small Business/Self Employed, Tax 

Exempt/Government Entities, and Large Business and International business operating divisions fall 

under the ACS business prioritization process above. These taxpayers would include business entity 

taxpayers and individual taxpayers with business income or losses.

IRS collection program officials said that they would like to continue to 

expand IRS’s use of the IDS model scores to prioritize cases within ACS. 

For example, ACS prioritizes cases into priority levels of 0 to 5, but does 

not prioritize the cases within each level. According to IRS collection 

program officials, using the model scores more robustly would allow IRS 

to better select among cases that have the same priority level or follow-up 

date. However, collection program officials have no plans to use the 

predictive model scores as the sole factor to prioritize cases as this would 

ignore the collection program priorities discussed above.

Page 14 GAO-15-744 Automated Collection System
In the third step, ACS assigns each case to a function unit. Function units 

are holding bins for cases while they wait for action by either ACS 

collection representatives or the system itself (which acts automatically). 

Generally, these actions include contacting taxpayers, taking enforcement 

actions, such as liens and levies, or investigating cases for contact 

information.25 After segregating cases by inventory and function unit, ACS 

works cases in a specific order, beginning with priority level, then by 

follow-up date, and finally by taxpayer identification number in ascending 

order.

Although the ACS prioritization process is largely automated, IRS 

managers responsible for case prioritization and selection have some 

discretion in choosing the number and type of cases worked to ensure 

that ACS meets two key performance measures: (1) the number of 

balance due and nonfiler case closures and (2) the level of service, which 

measures the quality of collection representatives’ interactions with 

taxpayers who call into ACS.26 To ensure ACS meets these measures, 

ACS managers consider: (1) how collection representatives’ time is spent; 

(2) how many notification and enforcement actions to initiate; and (3) how 

many and which cases to load for collection representatives to work.

ACS managers first balance the time collection representatives spend 

researching cases with the time they spend answering phone calls from 

taxpayers. In fiscal years 2013 and 2014, collection representatives spent 

77 percent of their time answering phone calls, up from 66 percent in 

fiscal year 2012, and thus spent less time researching cases, including 

those that may be of higher priority. Representatives spent more time 

25These ACS notifications are distinct from those IRS initially sent to taxpayers during the 

notice phase of the collection process.

26According to IRS officials, IRS sets the annual targets for the number of ACS case 

closures and level of service after reviewing historical information on ACS performance, 

as well as assessing available ACS staffing for the coming year. ACS officials develop 

these goals and then vet them with IRS collection program executives.

Case Assigned to Function Unit

ACS Managers Aim to 

Balance Workload to 

Achieve Case Closure and 

Taxpayer Service 

Measures

How Collection 

Representatives’ Time Is Spent

Page 15 GAO-15-744 Automated Collection System

 
answering phones primarily because in fiscal year 2014 there were 20 

percent fewer collection representatives (in terms of full-time equivalents) 

in ACS than in fiscal year 2012.

ACS managers also balance the number of notification and enforcement 

actions—such as outgoing calls, letters, liens, and levies—with the 

expected number of taxpayers who will call in response.27 ACS managers 

target an expected call volume that allows collection representatives to 

answer taxpayers’ calls in a timely manner. This helps ensure that ACS 

meets targets for level of service. Over the previous 3 fiscal years, ACS 

issued fewer notification and enforcement actions because of the 

declining number of collection representatives spending an increasing 

share of their time answering calls. For example, IRS issued 37 percent 

fewer levies and 31 percent fewer letters between fiscal year 2012 and 

2014.

Finally, ACS managers assess how many cases to upload for collection 

representatives to work. Managers track the number of cases and how 

long cases are residing in function units to ensure that older cases are 

worked by collection representatives in a timely manner.28 If the 

managers determine cases are residing in function units too long, they 

upload a block of cases from those function units to ACS’s inventory 

management tool. Each collection representative accesses the inventory 

management tool and works the next case available based on the priority 

level and oldest follow-up date. This process thus precludes collection 

representatives from selecting individual cases.

27According to IRS studies, levies generate one of the highest percentages of calls from 

taxpayers with a roughly 20 percent response rate (in fiscal year 2014), and thus ACS

staff monitors the volume at which they are issued.

28IRS establishes targets for the number of days that IRS allows a share of cases to 

reside in each of the priority function units. For instance, for SB/SE, cases in the 

managerial approvals function units have targets for working cases so that no more than 1 

percent of cases remain in these function units for more than 10 days. IRS managers 

compare how many cases are in priority function units to the annual targets to ensure that 

cases do not reside too long in those function units without action taken on them.

How Many Notification and 

Enforcement Actions to Initiate

How Many and Which Cases 

to Load for Collection 

Representatives to Work

Page 16 GAO-15-744 Automated Collection System

 
In fiscal year 2014, almost half of the 3.5 million cases closed or 

transferred out of ACS were high-priority cases, such as high-income 

nonfiler and trust fund cases. See figure 4. Furthermore, three-quarters of 

cases closed in ACS in fiscal year 2014 were for taxpayers who had a 

balance due outstanding with IRS (discussed further below).29 See 

appendix III for data on nonfiler cases for taxpayers who failed to file tax 

returns.

Figure 4: Cases Closed in ACS by Priority and Case Type, Fiscal Year 2014

Notes: Balance due cases also include combination cases, in which the taxpayer had both a nonfiler 

and balance due delinquency, consistent with how IRS reports such cases. Case data are presented 

on a taxpayer basis. High-priority cases include those with a priority of 0-1 and nonhigh-priority cases 

include those with a priority of 2-5. Figure data may add up to more than 100 percent due to rounding.

Table 2 shows the mix of closed cases by inventory type. About nine

percent were in one of ACS’s five special inventories, which align with 

IRS collection program priorities. About one-third of cases were from the 

model priority inventories, in which IRS predicts the case has a certain 

29Balance due cases also include combination cases, in which the taxpayer had both a 

nonfiler and balance due delinquency, consistent with how IRS reports such cases.

Priority Cases Accounted 

For Half of Case Closures 

in Fiscal Year 2014, and 

IRS Performed Better at 

Closing Priority Individual 

Cases Than Priority 

Business Cases

Page 17 GAO-15-744 Automated Collection System

 
potential to result in full payment or an installment agreement, among 

others, and the remaining cases were in ACS’s general inventory.

Table 2: Cases Closed in ACS by Type of Inventory, Fiscal Year 2014

Special Inventories Number Percentage

Large Business & International Cases 7,423 0.2%

Trust Fund Cases 140,876 3.7%

High-Income Nonfiler Cases 41,656 1.1%

Federal Employee/Retiree Cases 97,841 2.6%

International Cases 26,888 0.7%

Total Special Inventories 314,684 8.9%

Model Priority Inventories 1,133,879 32.2%

General Population Inventory 2,073,125 58.9%

Total Number of Cases 3,521,688 100.0%

Source: GAO analysis of IRS data. I GAO-15-744

Notes: Case data are presented on a taxpayer basis. Percentages may not sum due to rounding.

Broken out by type of taxpayer, about 60 percent of the balance due and 

nonfiler cases ACS closed in fiscal year 2014 were business taxpayers. 

These taxpayers included (1) business entities, such as corporations; (2) 

businesses which failed to file or remit fully their employment taxes; and 

(3) individuals with business income or losses.

Of the 3.52 million cases closed in or transferred out of ACS in fiscal year 

2014, about 1.76 million cases (50 percent) were either resolved by IRS 

when the taxpayer paid the tax liability in full, or established an 

installment agreement to pay the liability partially or in full, or when IRS 

secured the delinquent return. IRS collected almost $6.2 billion in 

delinquent revenue for the federal government from those cases closed in 

fiscal year 2014. Another 1 million cases (29 percent) were transferred 

out of ACS to another location in the IRS collection program.30 Finally, 

30While transferred cases are no longer worked within ACS, they remain open within the 

IRS collection program. ACS transfers taxpayer cases from ACS to the Field queue or 

Field collection where ACS is prohibited from resolving the case. These would most often 

involve economic hardship determinations for amounts in excess of ACS authority or 

installment agreements lasting 5 years longer than the collection statute expiration date. 

Field collection can also request ACS transfer the case due to related accounts on the 

taxpayer already in Field collection. IRM Part 5, Chapter 19, Sections 5-7.

Page 18 GAO-15-744 Automated Collection System

 
about 373,000 cases (11 percent) were closed as currently not collectible 

or shelved, and the remaining 380,000 cases (11 percent) were closed for 

other reasons, such as being sent to IRS exam to potentially audit the 

taxpayer’s return.31

In fiscal year 2014, IRS generally performed better at closing high-priority 

individual balance due cases than it did at closing these types of business 

cases. Figure 5 shows the outcome of these types of closed cases.

31Cases closed as currently not collectible could reenter the collection inventory if IRS 

determines that at some point in the future, the taxpayer will be able to pay some of the 

tax debt, since each collection assessment has a statute of limitations of 10 years (IRM 

Part 5, Chapter 16, Section 1). Similarly, cases that are shelved are taken out active 

collection status but could also reenter collection inventory.

Page 19 GAO-15-744 Automated Collection System

 
Figure 5: Types of Closures of High Priority Balance Due Cases in ACS, Fiscal Year 

2014

Notes: Balance due cases also include combination cases, in which the taxpayer had both a nonfiler 

and balance due delinquency, consistent with how IRS reports such cases. Case data are presented 

on a taxpayer basis. High-priority cases include those with a priority of 0–1. Cases with other closing 

codes include those cases that were no longer liable, not liable for the tax period, had a tax liability 

below a certain amount, had an expired statute, were closed on another IRS system, or were closed 

in ACS as sent to IRS exam or the automated 6020(b) program under the authority of 26 U.S.C. § 

6020(b) (hereafter “automated 6020(b) program”).

Of cases closed in ACS in fiscal year 2014, the median number of days 

high-priority individual and business balance due cases were open was 

259 and 196 days, respectively.32 Of cases closed in fiscal year 2014, 

IRS closed 85 percent of business high-priority balance due cases within 

32Individual and business high-priority balance due cases were closed on average 445 

and 241 days, respectively, in fiscal year 2014. 

Page 20 GAO-15-744 Automated Collection System

 
the first year they were open, whereas 61 percent of individual highpriority cases were closed within the first year.

An effective internal control system can help federal agencies achieve 

their missions and objectives and improve accountability. As set forth in 

Standards for Internal Control in the Federal Government, also known as 

the Green Book, internal controls comprise the plans, methods, and 

procedures used to meet an entity’s mission, goals, and objectives, which 

support performance-based management.33 Internal controls help agency 

program managers achieve desired results and provide reasonable 

assurance that program objectives are being achieved through, among 

other things, effective and efficient use of agency resources. Internal 

control is not one event, but rather an ongoing series of actions and 

activities that occur throughout an entity’s operations. Two examples of 

internal control standards are the establishment of clear, consistent 

objectives and a commitment to documenting significant events.

33For more information on internal control standards, see GAO, Standards for Internal 

Control in the Federal Government, GAO/AIMD-00-21.3.1 (Washington, D.C.: November 

1999). A newer version of the standards, GAO, Standards for Internal Control in the 

Federal Government, GAO-14-704G (Washington, D.C.: September 2014), takes effect in 

fiscal year 2016.

ACS Objectives Are 

Unclear, and IRS 

Lacks Key 

Documentation of and 

Procedures for 

Evaluating Case 

Prioritization and 

Selection

Page 21 GAO-15-744 Automated Collection System

 
Internal control standards can serve as tools to help IRS management 

ensure that ACS contributes to the collection program’s mission of 

collecting delinquent taxes and securing delinquent tax returns through 

the fair and equitable application of the tax laws. However, when we 

compared IRS’s processes to these standards, we found that they were 

deficient in some areas, thereby increasing the risk that ACS activities 

may not fully contribute to the collection program’s mission.

According to internal control standards, having clearly documented and 

communicated program objectives is a precondition of any further internal 

control activity, such as risk assessment, and is key to helping entities

meet their mission, objectives, and goals.34 IRS officials responsible for 

the collection program and ACS were unable to produce documentation 

regarding collection program or ACS objectives. While during an interview

with us, collection program executives described the objectives of 

ensuring adequate coverage of different types of collection cases and 

maximizing the revenue collected by IRS, neither of these concepts were 

clearly documented and communicated to IRS staff. We found elements 

of what could be developed into program objectives in various program 

documents—such as the collection program letter, which includes the 

collection mission, and collection policy statements. However, none of 

these documents were identified by IRS officials as establishing program

objectives. IRS officials also pointed to a variety of established 

34GAO, Standards for Internal Control in the Federal Government, GAO/AIMD-00-21.3.1

(Washington, D.C.: November 1999), pg. 10.

Selected Key Steps in Internal Control

The Collection Program 

and ACS Lack Clearly 

Documented Objectives, 

and the Key Term of 

Fairness Is Undefined

Page 22 GAO-15-744 Automated Collection System

 
performance goals and measures used within the collection program as 

objectives. However, according to internal control standards and the 

GPRA Modernization Act of 2010 (GPRAMA), performance goals and 

measures are not objectives, but rather should be used to assess 

whether an entity is achieving its objectives, and are ultimately derived 

from those objectives.35

The concept of fairness is of central importance to the collection program, 

as reflected in IRS’s and the collection program’s mission statement.36

However, the term “fairness” was not defined or operationalized in any 

ACS or collection program documents as it relates to case selection. IRS

officials did share a number of viewpoints of how fairness could be 

defined. While these informal views on fairness may have meaning to 

some, they do not constitute an institutional definition of fairness, nor are 

they substitutes for documented objectives that are accessible and can 

be communicated to staff.37 One IRS official responsible for collection 

case selection processes offered a definition of fairness as “treating like 

taxpayers alike”—that is, that taxpayers with similar characteristics face 

an equal likelihood of being selected for collection. Another IRS official 

said ACS is fair because it is a “next case” system—that is, cases are 

automatically prioritized and selected for ACS staff to work, without IRS 

35Pub. L. No. 111-352, 124 Stat. 3866 (Jan. 4, 2011). GPRAMA significantly enhanced 

the Government Performance and Results Act of 1993, Pub. L. No. 103-62, 107 Stat. 285 

(Aug. 3, 1993).

36The IRS mission, as reflected in its fiscal year 2014-2017 Strategic Plan, is to “Provide 

America’s taxpayers top-quality service by helping them understand and meet their tax 

responsibilities and enforce the law with integrity and fairness to all.” IRS Strategic Plan: 

FY2014-2017 (Washington, D.C.: 2014). The collection program’s mission, as conveyed in 

its fiscal year 2015 Collection Program Letter, is “To collect delinquent taxes and secure 

delinquent tax returns through the fair and equitable application of the tax laws, including 

the use of enforcement tools when appropriate, provide education to customers to enable 

future compliance, and thereby protect and promote public confidence in the American tax 

system.”

37We had previously recommended that IRS provide a performance measure for its former 

strategic objective to “increase fairness of compliance” and to clarify this strategic 

objective to more precisely express the desired result in a way that can be measured. In 

response, IRS replaced this one strategic objective with four new ones, each of which was 

more clearly stated and measurable. However, none of these newly formulated objectives 

provided a clearly-stated and measureable definition of fairness as it relates specifically to 

collection activities. Further, none of these four strategic objectives appears in IRS’s 

current strategic plan. GAO, IRS Modernization: IRS Should Enhance Its Performance 

Management System, GAO-01-234 (Washington, D.C.: Feb. 23, 2001).

Page 23 GAO-15-744 Automated Collection System

 
staff having any role in selecting them. According to this IRS official, 

fairness is “built into the system.” Another IRS official added that while 

IRS does not define and document fairness in the IRS collection program 

letter, IRS details the procedures and processes in the Internal Revenue 

Manual for how IRS staff are supposed to deal with taxpayers calling into 

ACS. He said that consistently following these procedures constitutes 

treating taxpayers fairly.38

The absence of clearly documented objectives and a clearly 

communicated definition of fairness present a number of challenges for 

IRS. First, without clearly formulated and communicated program 

objectives, IRS cannot know how well ACS contributes to the collection 

program mission and is not able to effectively assess the risks ACS may 

face or its overall effectiveness. Further, without documentation, a key 

concept like fairness may be open to multiple interpretations by ACS 

management and staff, as well as by the public. Ensuring that the 

multistep ACS prioritization and selection process is documented will 

allow IRS to communicate the concept of fairness consistently and reduce 

the risk that the case selection and prioritization process is perceived as 

unfair.

Internal control standards state that management needs to identify and 

analyze relevant risks associated with achieving the objectives. In 

addition, management needs to decide how to manage those risks and 

what actions should be taken in response. IRS officials draw on a mix of 

daily, weekly, monthly, and ad hoc meetings as their means of identifying 

and managing operational risks, which could affect the functioning of 

ACS.

38All IRS employees are evaluated on a mandatory standard evaluating their ability to 

administer tax laws fairly and equitably, consistent with the employees’ responsibilities. 

However, the IRM section covering this portion of evaluating whether IRS employees 

meet the standard does not define fairness but does provide examples of performance 

that meet or do not meet the standard.

ACS Has Processes for 

Assessing Risk and 

Monitoring Performance, 

but the Lack of Objectives 

Undercuts Their 

Effectiveness

Page 24 GAO-15-744 Automated Collection System

 
An IRS official illustrated one example of risk identification in which the 

agency’s process identified that some levy notices contained incorrect tax 

liability information. This error presented a risk that ACS might 

systematically supply taxpayers or third parties with incorrect information. 

She also described the steps IRS took to address this risk. These 

included working with IRS information technology staff to move the 

affected cases out of function units that issue letters and levies, as well as 

issuing an alert to inform relevant ACS staff of what was going on, in case 

they received questions from taxpayers.

ACS managers responsible for case prioritization and selection also have 

quality reviews and other processes to review ACS operations. For 

example, program reviews, among other things, ensure ACS collection 

representatives work cases according to IRM procedures. In fiscal year 

2014, each of the seven program reviews completed at SB/SE call sites 

identified areas for improvement in case processing and outlined 

corrective actions each call site should take in response.39 These reviews 

check compliance with current procedures but do not assess the ACS 

case prioritization and selection process, according to IRS officials. IRS 

managers, including those in ACS, are to complete annual assessments

of the effectiveness of controls within their own areas of responsibility, 

which include identifying and reporting risks.40

Additionally, IRS is implementing an Enterprise Risk Management (ERM) 

program, which will consider risks more systematically across IRS. The 

SB/SE Commissioner chartered a risk committee for SB/SE, which 

provides input into the overall IRS ERM process. The collection program 

also has a risk council, which provides input to the SB/SE Risk 

Committee. ACS is represented on this council by the Director of Campus 

Collections, who oversees the various ACS call sites that are spread 

across the country. As of April 2015, SB/SE’s preliminary risk register 

listed 31 distinct risks, including some collection-related risks. IRS plans 

to periodically update the risk register and monitor the risks included on 

39Internal Revenue Manual, Part 1, Chapter 4, Section 20. Depending on available 

resources, IRS will complete program reviews of a sample of ACS call sites and may also 

complete follow-ups at those sites if deficiencies and errors are identified. In fiscal year 

2014, IRS completed program reviews at five SB/SE ACS call sites and no W&I call sites. 

In fiscal year 2015, IRS planned to complete program reviews at three W&I ACS call sites 

and five SB/SE call sites. 

40Internal Revenue Manual, Part 1, Chapter 4, Section 2.

Page 25 GAO-15-744 Automated Collection System

 
the register. IRS is also to develop and take actions in response to the 

risks listed on the register. In addition to these actions, ERM has 

procedures whereby ACS staff and management can elevate risks for 

management and executives to consider. The implementation of the ERM 

process in SB/SE is still in its initial stages with the preliminary risk 

register created in April 2015 and the first risk collection council meeting 

held that same month. As a result, it is too early to determine the 

effectiveness of the ERM in identifying and managing risk.

As noted above, ACS managers responsible for case prioritization and 

selection track performance measures, such as the number of balance 

due and nonfiler case closures as well as level of service. IRS officials 

responsible for ACS review these measures in daily, weekly, and monthly 

meetings, which provide information on how ACS is functioning and on 

whether it is meeting the targets established for its key measures. Internal 

control standards require management to establish activities to review 

performance measures and indicators, as well as to compare actual 

performance to planned or expected results. ACS managers responsible 

for case prioritization and selection monitor and review a range of reports. 

These reports provide data on staffing, total ACS dollars collected, 

enforcement activities (e.g., liens and levies), and customer satisfaction, 

among other measures. Collection program executives review similar 

ACS measures, as well as information on enterprise collection priorities, 

some of which ACS pursues.

IRS has established a management infrastructure for both assessing risk 

and monitoring performance. However, the lack of clearly documented 

collection program and ACS objectives undercuts its effectiveness. 

Without clearly documented program objectives, IRS cannot ensure that 

its risk assessment processes effectively identify and analyze relevant 

risks associated with achieving objectives. ERM’s training for managers 

reinforces the importance of understanding objectives at various levels 

across IRS and establishing a risk management process to minimize the 

effects of risk to the accomplishment of those objectives. Similarly, IRS 

cannot know the extent to which ACS performance measures align with 

or contribute to the collection program mission without deriving measures 

from established objectives.

Page 26 GAO-15-744 Automated Collection System
Internal control standards state that such controls need to be clearly 

documented and that documentation should be readily available for 

examination. However, IRS has incomplete documentation to describe 

ACS’s process for assigning a case to an inventory and risk category, 

priority level, and function unit. The information we used to outline the 

ACS case prioritization and selection process discussed above was 

mostly told to us by IRS officials over a series of discussions, rather than 

by clear and comprehensive documentation. IRS was able to provide 

documentation on the case characteristics that apply to each risk 

category and the IRM section that explains ACS operations, including

information about how cases are assigned to function units. However, this 

documentation does not provide an overview of the multistep ACS case 

prioritization and selection process.41

Using screen shots from their computer system, IRS officials were able to 

demonstrate how ACS assigns a case to an inventory and a priority level. 

However, the screen shots did not stand alone without explanation and 

input from IRS officials. IRS was able to provide documentation about 

how the process has changed overtime, such as information technology 

requests to implement the use of the predictive model scores and alter 

the model priority inventories in ACS.

IRS officials acknowledged that they have little formal documentation 

along these lines to comprehensively describe the ACS process. In lieu of 

documentation, IRS has to rely on the institutional knowledge of 

management and staff to be able to describe the process. For example, 

key IRS staff have been employed in ACS since at least 2000, when ACS 

began using the risk categories. The officials also acknowledged that the 

process needs to be written out to affect a smooth transition to future staff 

and management. Indeed, IRS officials told us that some ACS staff will 

soon be eligible for retirement, which highlights the importance for IRS to 

document the multistep ACS process.

Without adequate documentation, it is also difficult to determine whether 

the ACS case prioritization and selection process effectively supports 

collection program and ACS missions and objectives. Furthermore, as 

IRS realigns ACS collection operations within SB/SE, having baseline 

41The IRM describes ACS as a system designed to do next case processing, in which the 

system selects cases to be worked by priority. IRM, Part 5, Chapter 19, Section 5.

The ACS Prioritization and 

Selection Process Is Not 

Clearly Documented

Page 27 GAO-15-744 Automated Collection System

 
documentation of the process as structured would assist IRS in 

communicating the process to staff and in making decisions about how 

best to consolidate ACS. Finally, the absence of a fully documented 

prioritization process may make it difficult for IRS to defend against 

accusations that it is not following its collections procedures, since these 

procedures are not documented and cannot be communicated to parties 

inside and outside of IRS.

According to internal control standards, separate evaluations of controls 

can be useful by focusing directly on the controls’ effectiveness at a 

specific time. The scope and frequency of separate evaluations should 

depend primarily on the assessment of risks and the effectiveness of 

ongoing monitoring procedures.42 ACS has no procedures or structure for 

regularly completing periodic evaluations of the ACS case prioritization 

and selection process, including its use of the special inventories, risk 

categories, predictive models, and priority levels. For example, according 

to IRS officials, the ACS risk categories have been relatively static since 

their creation in 2000, and dollar values within those risk categories have 

not been adjusted for inflation. While some changes have been made to 

the ACS case prioritization and selection process, these changes were 

based on ad hoc studies or recommended by management based on 

changes in priorities, rather than the result of regular and periodic 

evaluations of the ACS case prioritization process. For example, as a 

result of the IRS Collection Process Study completed in 2010, IRS 

decided to retain high-risk cases longer in ACS to ensure those cases get 

worked.43 IRS officials said that while they have no procedures to 

regularly or periodically evaluate ACS case prioritization, such 

evaluations could provide useful information for consolidating ACS 

operations in SB/SE, in light of the IRS realignment. In addition, according 

to IRS officials, the realignment is serving as a catalyst to review and 

enhance the ACS process in SB/SE, such as reviewing and enhancing 

the use of the risk categories and revisiting the amount of time cases are 

retained in ACS.

42GAO, Standards for Internal Control in the Federal Government, GAO/AIMD-00-21.3.1 

(Washington, D.C.: November 1999), pg. 20.

43IRS, Collection Process Study (Washington, D.C.: Sept. 30, 2010). 

IRS Lacks Procedures for 

Periodically Evaluating the 

ACS Process and Has Not 

Taken Corrective Action 

from Ad Hoc Evaluation

Page 28 GAO-15-744 Automated Collection System

 
IRS’s December 2014 Collection Workload Optimization Project (CWOP) 

produced a number of findings and recommendations for how ACS could 

better manage and prioritize cases. For example, CWOP recommended 

that ACS stop prioritizing cases by follow-up date because selecting 

cases by the oldest follow-up date may result in ACS selecting cases with 

less collection potential. In our discussions about the status of the CWOP 

recommendations, IRS officials said that while CWOP remains an 

ongoing effort, they do not have a plan or time frame in place for next 

steps and corrective actions in response to the report. IRS officials stated 

that they have been unable to take action with regard to certain CWOP 

recommendations due to scarce resources and competing priorities for 

IRS’s information technology services.

Internal control standards note that managers are to (1) promptly evaluate 

findings from audits and other reviews, including those showing 

deficiencies and recommendations reported by auditors and others who 

evaluate agencies’ operations, (2) determine proper actions in response 

to findings and recommendations from audits and reviews, and (3) 

complete, within established time frames, all actions that correct or 

otherwise resolve the matters brought to management’s attention.

Without periodically reviewing and evaluating the ACS case prioritization 

and selection process and ensuring that findings from evaluations, such 

as CWOP, are addressed and corrective action is taken where 

necessary, ACS may be missing opportunities to better prioritize its 

workload and improve collection results. For example, CWOP 

recommends that ACS prioritize collection cases in each of its inventories 

by the model scores rather than by the priority level codes. According to 

IRS, this would help ACS select the cases with the greatest collection 

potential. Without such evaluations, IRS may also not be able to ensure 

that ACS case prioritization is working as intended and may be missing 

opportunities to more effectively align the ACS case prioritization process 

with IRS’s strategic objectives and with collection program and ACS 

objectives, once developed. In addition, if the prioritization and selection 

process is not periodically evaluated over time, it could lose its value and 

usefulness. For example, IRS does not know how the static dollar 

thresholds for the ACS risk categories affect the composition of cases 

assigned certain priorities and risks over time. Outdated dollar thresholds 

may no longer be serving their intended purpose of identifying high-risk or 

priority cases as they have remained static while taxpayer incomes have 

increased over time, potentially changing ACS’s composition of cases.

Page 29 GAO-15-744 Automated Collection System
ACS is one of IRS’s primary enforcement tools for compelling 

noncompliant taxpayers to file their tax returns and pay their taxes. ACS 

ensures millions of taxpayers do just that, which results in billions of 

dollars being collected annually for the federal government, thereby 

helping to address the tax gap and encouraging future voluntary 

compliance. ACS’s process for prioritizing and selecting cases helps to 

ensure that high-priority taxpayers, including federal employees and 

retirees, high-income nonfilers, and large corporations, as well as 

taxpayers who have a higher probability of paying their taxes in full, 

comply with the tax laws. But the absence of key management controls—

objectives, documentation, and procedures to complete periodic 

evaluations—creates multiple challenges for IRS. Without clearly 

documented objectives, IRS cannot know if ACS is meeting its mission 

and the agency will not be able to manage risk or monitor performance as 

well as it otherwise could.

The lack of clear and comprehensive documentation on ACS’s multistep 

case prioritization and selection process risks that it will not be 

communicated consistently to parties inside and outside of IRS. IRS has 

relied on institutional knowledge from experienced staff, some of whom 

are now retirement eligible. However, the risk of inconsistently 

communicating the ACS process increases as subsequent IRS 

employees work within ACS. By not periodically evaluating how the ACS 

process is structured (or acting on the findings of the ad hoc evaluation 

that was conducted), IRS is missing opportunities to enhance ACS’s 

effectiveness. Moreover, the absence of these controls could affect IRS’s 

ability to successfully consolidate W&I and SB/SE ACS call sites as part 

of the ongoing IRS realignment. Lastly, IRS risks the appearance that the 

ACS prioritization and selection process is unfair to taxpayers because 

IRS is unable to communicate key pieces of information, such as its 

definition of fairness, to the public.

To help ensure the IRS collection program meets its mission and selects 

cases fairly, we recommend that the Commissioner of Internal Revenue 

take the following four actions related to ACS:

1. Establish, document, and implement objectives for the collection 

program and ACS, and define the key term of “fairness” as it applies 

to collection activities, which can be communicated to IRS staff.

2. Establish and implement clear guidance and documentation for the 

ACS case prioritization and selection process, including inventory, 

Conclusions

Recommendations for 

Executive Action

Page 30 GAO-15-744 Automated Collection System
risk, and priority designations, as well as changes to those 

designations over time, and communicate them to appropriate IRS 

staff.

3. Establish, document, and implement procedures to complete periodic 

evaluations of the ACS case prioritization and selection process and 

structure. The evaluation should cover the composition of the risk 

categories, model thresholds, and dollar thresholds used to prioritize 

cases.

4. Establish, document, and implement a plan and time frame to ensure 

follow-up for ad hoc evaluations of the ACS case prioritization and 

selection process.

We provided a draft of this report to the Commissioner of Internal 

Revenue for review and comment. The Deputy Commissioner for 

Services and Enforcement provided written comments dated August 18, 

2015, which are reprinted in appendix V. 

IRS stated that it agrees with the importance of sound internal controls 

and is committed to their improvement, especially in the areas we 

recommended. To that end, IRS noted actions that it has taken to 

improve collection performance in fiscal years 2014 and 2015, including 

updates of analytical models and the realignment of the collection 

program to be entirely within SB/SE. IRS acknowledged that its 

documentation has not kept pace and affirmed its commitment to bringing 

the policies and procedures up to date. However, IRS did not believe that 

the level of current documentation has undercut the effectiveness of ACS.

In response to our recommendation to establish, document, and 

implement objectives for the collection program and ACS, IRS said it will 

review its current objectives for both, which it identifies as the collection 

program priorities, to identify and implement any additional objectives. 

IRS also said it plans to define key terms such as "fairness" as it applies 

to collection activities in a data dictionary, which is communicated to IRS 

staff. As we noted above, ensuring clearly documented and 

communicated objectives exist will allow IRS to use the management 

infrastructure in ACS for both assessing risk and monitoring performance 

to their full potential. In addition, communicating a key concept like 

fairness to IRS staff will help reduce the risk that it is open to multiple 

interpretations. 

Agency Comments 

and Our Evaluation

Page 31 GAO-15-744 Automated Collection System
In response to our recommendation on establishing and implementing 

clear documentation, IRS said that it will review and implement clear 

guidance and documentation that can be communicated to IRS staff. As 

we discussed, having adequate documentation for the ACS case 

prioritization and selection process will assist IRS in communicating the 

process to staff, and in making decisions about the best way to 

consolidate ACS under the recent realignment of collection operations.

In response to our recommendation to periodically evaluate the ACS case 

prioritization and selection process, and follow up on prior ad hoc 

evaluations, IRS said it will review and, if needed, update its internal 

management documents and ensure follow up for ad hoc evaluations. 

IRS also noted that any evaluation of the ACS case prioritization and 

selection process completed will be based on a risk assessment at that 

time. Given that components of the ACS case prioritization and selection 

process have been in place since at least 2000 without being evaluated, 

ACS may be missing opportunities to better prioritize its workload and 

improve collection results through periodic evaluations, and ensuring 

follow up for ad hoc evaluations.

Lastly, IRS noted that our report did not identify any instances where the 

selection of a case was considered inappropriate or unfair. However, as 

described in our scope and methodology, we did not design our study to 

look for cases of inappropriate selection, but rather to assess the internal 

controls that help safeguard the fairness of the case selection process. By 

evaluating ACS’s internal control framework for selection, we were able to 

determine whether IRS had processes in place that help provide 

reasonable assurance of fair selection not just of cases selected in the 

past but also on an ongoing basis. 

We are sending copies of this report to the Chairmen and Ranking 

Members of other Senate and House committees and subcommittees that 

have appropriation, authorization, and oversight responsibilities for IRS. 

We will also send copies of the report to the Secretary of the Treasury, 

Commissioner of Internal Revenue, and other interested parties. In 

addition, this report is available at no charge on the GAO website at 

http://www.gao.gov.

If you or your staff have any questions or wish to discuss the material in 

this report further, please contact me at (202) 512-9110 or 

mctiguej@gao.gov. Contact points for our Offices of Congressional 

Page 32 GAO-15-744 Automated Collection System
Relations and Public Affairs may be found on the last page of this report. 

Key contributors to this report are listed in appendix VI.

James R. McTigue, Jr.

Director, Tax Issues

Strategic Issues

Page 33 GAO-15-744 Automated Collection System
Appendix I: Objectives, Scope, and 

Methodology

Our objectives were to (1) describe the Automated Collection System 

(ACS) process to prioritize and select collection cases and the results of 

that process for fiscal year 2014, and (2) determine how well the ACS 

case prioritization and selection process supports the collection program 

mission and objectives.

To describe ACS’s process to prioritize and select collection cases, we 

obtained and reviewed, to the extent they were available, IRS documents 

on how cases are prioritized and selected once they are received within 

ACS. The documents reviewed include sections of the Internal Revenue 

Manual (IRM), program documents, IRS reports, and presentations 

prepared by IRS staff. To better understand background and context for 

ACS, we reviewed information on the Inventory Delivery System process, 

which routes cases to ACS, and interviewed IRS officials responsible for 

the IRS collection program.1 We also twice visited an ACS call site in 

Philadelphia. We interviewed IRS managers in the offices of 

Headquarters Collection and Campus Collection, including IRS managers 

responsible for managing case inventory in ACS, on how collection cases 

are received in and flow through the ACS process. We also interviewed 

IRS officials regarding the various factors that the officials take into 

consideration in deciding how to work certain cases to meet ACS 

performance measures and how IRS’s recent realignment will affect 

ACS’s process. In addition, we observed ACS staff working cases and 

taking telephone calls from taxpayers. To better understand the scale of 

operations for ACS and performance measures, we reviewed data from a 

number of prepared reports and other data provided by IRS covering 

fiscal years 2012 through 2014. The data we received included the 

number of notification and enforcement actions taken in ACS. We derived 

most of the data from IRS Collection Activity Reports (CAR). We 

previously used CAR data to report on the IRS notice phase process in 

2009.2 At that time, we interviewed IRS officials with knowledge of CAR 

data about the steps taken to ensure data accuracy. We determined that 

the CAR data were sufficiently reliable for our purposes.

1

GAO, IRS Case Selection: Collection Process Largely Automated, but Lacks Adequate 

Internal Controls, GAO-15-647 (Washington, D.C.: July 29, 2015).

2

GAO, Tax Debt Collection: IRS Needs to Better Manage the Collection Notices Sent to 

Individuals, GAO-09-976 (Washington, D.C.: Sept. 30, 2009). 

Appendix I: Objectives, Scope, and 

Methodology

Page 34 GAO-15-744 Automated Collection System

 
Appendix I: Objectives, Scope, and 

Methodology

To describe the results of the ACS case prioritization and selection 

process for fiscal year 2014 (the most recent full year available), we 

obtained data from ACS on collection taxpayer cases that had been 

closed in fiscal year 2014 and partially from fiscal year 2015.3 We 

analyzed and reported closed ACS collection cases by the type of 

taxpayer (individual or business), case priority, type of delinquency, type 

of closure, and the average and median number of days cases were open 

in ACS. For purposes of our analysis of taxpayer type, individual 

taxpayers reflect cases handled by ACS call sites in the Wage & 

Investment division. We defined business taxpayers as those cases that 

were prioritized and worked within the Small Business and Self Employed 

division. These include the following types of taxpayers:

• Individual taxpayers who report business income, such as (1) nonfarm 

sole proprietorships that file Form 1040, Schedule C, are 

unincorporated and owned by a single individual in which net 

business income or loss is included in the owner’s individual adjusted 

gross income; (2) landlords, who file a Form 1040 and Schedule EPart I and are individuals who report rental real estate activity on Part 

I of Schedule E; or (3) farmers, who file a Form 1040 and Schedule F 

or Form 4835 and are individuals who report farm income or 

landowners who report farm rental income;

• Businesses which failed to file or remit fully their employment taxes; or

• Business entity taxpayers, such as corporations.4

For the purposes of our analysis, we treated taxpayers who had both a 

balance due and nonfiler account on their case, known as a combination 

case, as a balance due case, consistent with how IRS reports ACS data. 

For the purposes of this review, we determined that the ACS data used in 

our analysis were reliable. Our data reliability assessment included 

3

The Automated Collection System retains only a rolling 2-year period of data, which is 

why we reported fiscal year 2014 data as the only complete year of data available in the 

body of this report. Partial fiscal year 2015 data are reported in appendix IV and cover 

October 1, 2014, through February 28, 2015. 

4

In general, employers who withhold federal income tax or social security and Medicare 

taxes must file (1) Form 941, Employer’s Quarterly Federal Tax Return each quarter, (2) 

Form 943, Employer’s Annual Federal Tax Return for Agricultural Employees to report 

agricultural wages, (3) Form 944, Employer’s Annual Federal Tax Return if a taxpayer has 

received written notification about the Form 944 program, or (4) Form 945, Annual Return 

of Withheld Federal Income Tax if a taxpayer is filing to report backup withholding. 

Page 35 GAO-15-744 Automated Collection System

 
Appendix I: Objectives, Scope, and 

Methodology

reviewing relevant documentation, interviewing knowledgeable IRS 

officials, and reviewing the data to identify obvious errors or outliers.

To assess how well the processes for case selection support collection 

program objectives and mission, we compared documentation for the 

processes identified above to selected standards in the Standards for 

Internal Control in the Federal Government (GAO/AIMD-00-21.3.1, 

November 1999).5 We also reviewed IRS and collection program 

guidance in which objectives could potentially be stated or implied, 

including the IRM, the mission statements of various collection program 

subunits and policy statements on collections, annual collection program 

letters for fiscal years 2013 through 2015, and potentially collection

program-related objectives in IRS Publication 3744, Internal Revenue 

Service Strategic Plan FY2014-2017.

6 We then assessed whether ACS’s 

procedures, IRM sections, IRS reports, and related internal controls 

conformed to the relevant standards for internal control in the federal 

government.7 To determine which internal control standards were most 

relevant, we utilized our Internal Control Management and Evaluation 

Tool, in conjunction with observations based on our preliminary audit 

work, to select the standards that most closely related to ACS activities.8

We then focused our assessment of ACS internal controls around our 

selected standards by interviewing IRS officials and reviewing available 

documentation. To determine IRS’s definition of fairness as it applies to 

collection activities, we reviewed the ACS procedures and process for 

case prioritization and selection. Furthermore, we surveyed relevant 

industry and institutional sources, and determined that there is no 

standard definition of fairness in the context of tax collection specifically—

or even tax administration more generally—to which IRS could appeal in 

lieu of having its own internally-generated definition of fairness within the 

collection program. To determine whether there are procedures in place 

to monitor, evaluate, and review the ACS prioritization process 

periodically, we reviewed similar documentation mentioned above. We 

5

IRS, Fiscal Year 2015 Collection Program Letter.

6

IRS, Strategic Plan: FY2014-2017 (Washington, D.C.: 2014).

7

GAO, Internal Control: Standards for Internal Control in the Federal Government, 

GAO/AIMD-00-21.3.1 (Washington, D.C.: November 1999).

8

GAO, Internal Control Management and Evaluation Tool, GAO-01-1008G (Washington, 

D.C.: August 2001).

Page 36 GAO-15-744 Automated Collection System

 
Appendix I: Objectives, Scope, and 

Methodology

also interviewed relevant IRS officials concerning their understanding of 

the mission, objectives, and internal controls of the collection program 

and ACS, and about the extent to which procedures exist to monitor ACS 

case prioritization and selection.

We conducted this performance audit from October 2014 to September 

2015 in accordance with generally accepted government auditing 

standards. Those standards require that we plan and perform the audit to 

obtain sufficient, appropriate evidence to provide a reasonable basis for 

our findings and conclusions based on our audit objectives. We believe 

that the evidence obtained provides a reasonable basis for our findings 

and conclusions based on our audit objectives.

Page 37 GAO-15-744 Automated Collection System
Appendix II: Automated Collection System 

(ACS) Overview

Once a case arrives, ACS assigns it to an inventory and priority level, as 

well as to a function unit. Depending on the function unit, ACS may take a 

number of actions, such as searching for contact information and a levy

source, contacting taxpayers, or issuing levies or liens as appropriate. 

See figure 6, which depicts the ACS process.

Appendix II: Automated Collection System 

(ACS) Overview

Overview of ACS Process

Page 38 GAO-15-744 Automated Collection System
Appendix II: Automated Collection System 

(ACS) Overview

Figure 6: Overview of ACS

Notes: a

This figure begins after the notice phase of the IRS collection process.

b

IRS may take one or more of these actions. c

If a case is not resolved in ACS, a case may move to the next step in the collection stream, such as 

the Field queue (a holding area for cases to be moved to the Field collection) or is shelved, meaning 

the case is taken out of active collection inventory. d

ACS works cases based on priority and will shelve cases if they have not been closed within a 

certain amount of time.

e

A collection case may be closed for a variety of reasons. For example, a collection case is closed as 

unable to contact if IRS is unable to contact a taxpayer although the address is known but there is no 

means to enforce collection through a levy. See Internal Revenue Manual (IRM), Part 5, Chapter 16, 

Section1 and IRM Part 5, Chapter19, Section 5. f

A case may be closed for a number of reasons, including but not limited to (1) a taxpayer paying the 

balance due fully, (2) a taxpayer filing a delinquent return with IRS, (3) IRS and the taxpayer 

establishing and then completing an installment agreement for payment, (4) IRS determining the 

taxpayer cannot be located or contacted, or (5) because the taxpayer does not have the ability to pay.

Page 39 GAO-15-744 Automated Collection System
Appendix II: Automated Collection System 

(ACS) Overview

Also, the ACS process for setting the priority level for individual taxpayers 

is similar to the process used for business taxpayers.1 The main 

difference is that, within the Wage & Investment (W&I) process, highincome nonfiler and Federal Employee/Retiree Delinquency Initiative

cases, among others, are prioritized first, as, unlike those of the Small 

Business/Self Employed (SB/SE) process, the W&I call sites do not have 

responsibility to pursue trust fund cases.2 The W&I prioritization process 

proceeds similarly to the SB/SE process thereafter. See figure 7.

Figure 7: ACS Process for Assigning a Priority Level to Individual Cases

Notes: High-income nonfiler cases, prioritized first, are sent to the ACS call site in Austin, Texas. In 

addition, some cases from the general inventory and model priority inventory are also sent to the 

Austin call site to be worked.

1

The priority level can range from 0 to 5, with 0 being the highest priority.

2

These cases do not receive the highest ACS priority of 0, but according to IRS officials, 

they receive priority within ACS because they are worked at specific sites.

Page 40 GAO-15-744 Automated Collection System

 
Appendix II: Automated Collection System 

(ACS) Overview

Finally, after segregating cases by inventory and function unit, ACS works 

cases in a specific order, beginning with priority level, then by follow-up 

date, and finally by taxpayer identification number in ascending order. 

See figure 8 for how ACS sorts cases by priority and inventory within a 

function unit.

Figure 8: How ACS Cases Are Prioritized and Sorted Within a Function Unit

Notes:

a

International special inventory cases include both individual and business taxpayers. Priority level 0 

cases are the highest priority while priority level 5 cases are the lowest.

In November 2014, IRS realigned compliance operations across its W&I 

and SB/SE business operating divisions. Prior to the realignment, ACS 

operations were split with W&I handling individual taxpayers and SB/SE 

handling business taxpayers. As part of the realignment, IRS 

consolidated all ACS collection operations within SB/SE under the 

authority of a single IRS collection director. Figure 9 shows the various 

ACS call and support sites, which receive taxpayer calls and research 

ACS Call Site Locations

Page 41 GAO-15-744 Automated Collection System
Appendix II: Automated Collection System 

(ACS) Overview

collection cases. Through the end of fiscal year 2015, the eight former 

W&I call sites will continue to handle and answer phone calls from 

individual taxpayers, while the seven former SB/SE call sites will do the 

same for business taxpayers.

Page 42 GAO-15-744 Automated Collection System
Appendix II: Automated Collection System 

(ACS) Overview

Figure 9: ACS Call Site and Support Site Locations

Notes: Under IRS’s November 2014 realignment, all W&I and SB/SE ACS operations were 

consolidated within SB/SE under a single collection director. The support sites assist the call sites by 

resolving written correspondence from taxpayers, taxpayer representatives, and third-party contacts.

Page 43 GAO-15-744 Automated Collection System
Appendix II: Automated Collection System 

(ACS) Overview

Table 3 shows how notifications and enforcement actions have fallen 

significantly between fiscal years 2012 and 2014.

Table 3: ACS Notification and Enforcement Actions, Fiscal Years 2012 to 2014

Fiscal Year

2012 2013 2014

Percentage Change

from 2012 to 2014

Liens 209,121 203,574 185,762 -11.2%

Levies 2,246,769 1,216,302 1,423,502 -36.6 

Letters 7,011,252 5,461,390 4,847,191 -30.9

Outgoing Calls 2,030,926 1,303,081a 1,210,175a -40.4

Source: GAO analysis of IRS data. | GAO- 15-744

Note:

a

W&I division ACS call sites shut down their automated dialer system from February 2013 until March 

2014, as IRS used ACS staff from three call sites to work on identify theft issues.

ACS Notification and 

Enforcement Actions

Page 44 GAO-15-744 Automated Collection System
Appendix III: Automated Collection System 

(ACS) Data on Nonfiler Closed Cases, Fiscal 

Year 2014

This appendix shows the results of nonfiler cases closed in ACS in fiscal 

year 2014.1

Figure 10: Types of Closures of ACS Individual Nonfiler Cases by Priority, Fiscal 

Year 2014

Notes: Case data are presented on a taxpayer basis. High priority cases include those with a priority 

of 0-1 and nonhigh-priority cases include those with a priority of 2-5. Cases with other closing codes 

include those cases that were no longer liable, not liable for the tax period, had a tax liability below a 

certain amount, had an expired statute, were closed on another IRS system, or were closed in ACS 

as sent to IRS exam or the automated 6020(b) program.

1

Cases in which the taxpayer had a balance due and nonfiler delinquency, known as 

combination cases, were treated as balance due cases, consistent with how IRS reports 

such cases.

Appendix III: Automated Collection System 

(ACS) Data on Nonfiler Closed Cases, Fiscal 

Year 2014

Page 45 GAO-15-744 Automated Collection System

 
Appendix III: Automated Collection System 

(ACS) Data on Nonfiler Closed Cases, Fiscal 

Year 2014

Figure 11: Types of Closures of ACS Business Nonfiler Cases by Priority, Fiscal 

Year 2014

Notes: Case data are presented on a taxpayer basis. High-priority cases include those with a priority 

of 0-1 and nonhigh-priority cases include those with a priority of 2-5. Cases with other closing codes 

include those cases that were no longer liable, not liable for the tax period, had a tax liability below a 

certain amount, had an expired statute, were closed on another IRS system, or were closed in ACS 

as sent to IRS exam or the automated 6020(b) program.

Page 46 GAO-15-744 Automated Collection System
Appendix III: Automated Collection System 

(ACS) Data on Nonfiler Closed Cases, Fiscal 

Year 2014

Figure 12: Number of Days That Closed ACS Nonfiler Cases Were Open, Fiscal Year 

2014

Notes: Case data are presented on a taxpayer basis. High-priority cases include those with a priority 

of 0-1 and nonhigh-priority cases include those with a priority of 2-5.

Table 4: Distribution of Closed Nonfiler ACS Cases by Number of Years Open, Fiscal Year 2014

One Year or Less One to Two Years Two to Three Years Three or More Years

Individual Nonfiler Cases

High-Priority Cases 51.8% 28.6% 7.3% 12.4%

Nonhigh-Priority Cases 66.0% 16.3% 10.3% 7.4%

Business Nonfiler Cases

High-Priority Cases 94.3% 3.7% 1.3% 0.7%

Nonhigh-Priority Cases 41.4% 17.7% 37.3% 3.6%

Source: GAO analysis of IRS data. I GAO-15-744

Notes: Case data are presented on a taxpayer basis. High-priority cases include those with a priority 

of 0-1 and nonhigh-priority cases include those with a priority of 2-5.

Page 47 GAO-15-744 Automated Collection System
Appendix IV: Automated Collection System 

(ACS) Data on Balance Due and Nonfiler Case 

Closures, Partial Fiscal Year 2015

This appendix shows the results of balance due and nonfiler cases closed 

in ACS from October 1, 2014, to February 28, 2015.

Table 5: Types of Closures of ACS Balance Due Cases by Priority Level, Partial Fiscal Year 2015

Individual Balance Due Cases Number of Closures Percentage

High-Priority Cases 

Full Payment 14,664 13.0%

Installment Agreement 65,627 58.1%

Currently Not Collectible 15,983 14.1%

Transferred Out of ACS 7,775 6.9%

Other 9,003 8.0%

Nonhigh-Priority Cases 

Full Payment 206,852 48.0%

Installment Agreement 115,003 26.7%

Currently Not Collectible 21,140 4.9%

Transferred Out of ACS 4,922 1.1%

Shelved 6,293 1.5%

Other 76,810 17.8%

Business Balance Due Cases

High-Priority Cases 

Full Payment 40,741 11.0%

Installment Agreement 48,837 13.2%

Currently Not Collectible 8,368 2.3%

Transferred Out of ACS 253,498 68.5%

Other 18,681 5.0%

Nonhigh-Priority Cases 

Full Payment 133,436 36.1%

Installment Agreement 76,993 20.8%

Currently Not Collectible 12,295 3.3%

Transferred Out of ACS 4,435 1.2%

Shelved 95,978 25.9%

Other 46,958 12.7%

Source: GAO analysis of IRS data. I GAO-15-744

Notes: Balance due cases also include combination cases, in which the taxpayer had both a nonfiler 

and balance due delinquency, consistent with how IRS reports such cases. Case data are presented 

on a taxpayer basis. High-priority cases include those with a priority of 0–1 and nonhigh-priority cases 

include those with a priority of 2-5. Cases with other closing codes include those cases that were no 

longer liable, not liable for the tax period, had a tax liability below a certain amount, had an expired 

statute, were closed on another IRS system, or were closed in ACS as sent to IRS exam or 

automated 6020(b) program. Partial fiscal year 2015 data cover October 1, 2014, through February 

28, 2015.

Appendix IV: Automated Collection System 

(ACS) Data on Balance Due and Nonfiler 

Case Closures, Partial Fiscal Year 2015

Page 48 GAO-15-744 Automated Collection System
Appendix IV: Automated Collection System 

(ACS) Data on Balance Due and Nonfiler Case 

Closures, Partial Fiscal Year 2015

Table 6: Types of Closures of ACS Nonfiler Cases by Priority, Partial Fiscal Year 2015

Individual Nonfiler Cases Number of Closures Percentage

High-Priority Cases 

Return Secured 5,831 9.9%

Return Filed 7,753 13.1%

Transferred Out of ACS 15,911 26.9%

Unable to Locate or Contact Taxpayer 6,650 11.3%

Shelved 10,975 18.6%

Other 11,983 20.3%

Nonhigh-Priority Cases 

Return Secured 6,246 8.0%

Return Filed 9,526 12.3%

Transferred Out of ACS 26,214 33.7%

Unable to Locate or Contact Taxpayer 2,731 3.5%

Shelved 9,242 11.9%

Other 23,799 30.6%

Business Nonfiler Cases

High-Priority Cases 

Return Secured 4,035 1.9%

Return Filed 9,776 4.7%

Transferred Out of ACS 167,622 80.7%

Unable to Locate or Contact Taxpayer 1,109 0.5%

Shelved 257 0.1%

Other 25,031 12.0%

Nonhigh-Priority Cases 

Return Secured 2,673 7.0%

Return Filed 3,696 9.7%

Transferred Out of ACS 7,182 18.9%

Unable to Locate or Contact Taxpayer 1,055 2.8%

Shelved 10,096 26.5%

Other 13,335 35.1%

Source: GAO analysis of IRS data. I GAO-15-744

Notes: Case data are presented on a taxpayer basis. High-priority cases include those with a priority 

of 0–1 and non-high-priority cases include those with a priority of 2-5. Cases with other closing codes 

include those cases that were no longer liable, not liable for the tax period, had a tax liability below a 

certain amount, had an expired statute, were closed on another IRS system, or were closed in ACS 

as sent to IRS exam or the automated 6020(b) program. Partial fiscal year 2015 data cover October 

1, 2014, through February 28, 2015.

Page 49 GAO-15-744 Automated Collection System
Appendix IV: Automated Collection System 

(ACS) Data on Balance Due and Nonfiler Case 

Closures, Partial Fiscal Year 2015

Table 7: Average and Median Number of Days ACS Balance Due Cases Open by 

Priority Level, Partial Fiscal Year 2015

Individual Balance Due Cases Number of Days

High-Priority Cases 

Average 509 

Median 294 

Non-high-Priority Cases 

Average 356 

Median 161 

Business Balance Due Cases

High-Priority Cases 

Average 302 

Median 196 

Non-high-Priority Cases 

Average 376 

Median 196 

Source: GAO analysis of IRS data. I GAO-15-744

Notes: Case data are presented on a taxpayer basis. Partial fiscal year 2015 data covers October 1, 

2014, through February 28, 2015. High-priority cases include those with a priority of 0-1 and nonhighpriority cases include those with a priority of 2-5.

Page 50 GAO-15-744 Automated Collection System
Appendix IV: Automated Collection System 

(ACS) Data on Balance Due and Nonfiler Case 

Closures, Partial Fiscal Year 2015

Table 8: Average and Median Number of Days ACS Nonfiler Cases Open by Priority 

Level, Partial Fiscal Year 2015

Individual Nonfiler Cases Number of Days

High-Priority Cases 

Average 734 

Median 518 

Nonhigh-Priority Cases 

Average 661 

Median 532 

Business Nonfiler Cases

High-Priority Cases 

Average 223 

Median 196 

Nonhigh-Priority Cases 

Average 482 

Median 497 

Source: GAO analysis of IRS data. I GAO-15-744

Notes: Case data are presented on a taxpayer basis. Partial fiscal year 2015 data covers October 1, 

2014, through February 28, 2015. High-priority cases include those with a priority of 0-1 and nonhighpriority cases include those with a priority of 2-5.

Page 51 GAO-15-744 Automated Collection System
Appendix V: Comments from the Internal Appendix V: Comments from the Internal Revenue Service

Revenue Service

Page 52 GAO-15-744 Automated Collection System
Appendix V: Comments from the Internal 

Revenue Service

Page 53 GAO-15-744 Automated Collection System
Appendix V: Comments from the Internal 

Revenue Service

Page 54 GAO-15-744 Automated Collection System
Appendix V: Comments from the Internal 

Revenue Service

Page 55 GAO-15-744 Automated Collection System
Appendix VI: GAO Contact and Staff 

Acknowledgments

James R. McTigue, Jr. (202) 512-9110, mctiguej@gao.gov

In addition to the contact named above, MaryLynn Sergent, Assistant 

Director, Vaughn Baltzly, Jehan Chase, David Dornisch, Steven Flint, 

Robert Gebhart, Ted Hu, Robert Robinson, Alan Rozzi, John Sawyer,

Albert Sim, and Jason Vassilicos contributed to this report.

Appendix VI: GAO Contact and Staff 

Acknowledgments

Contact

Staff 

Acknowledgments

(451123) Page 56 GAO-15-744 Automated Collection System
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