REQUIRED SUPPLEMENTARY INFORMATION (UNAUDITED) 208

Tax Assessments

The government is authorized and required to make inquiries, determinations, and assessments of all taxes that have not

been duly paid. Unpaid assessments result from taxpayers filing returns without sufficient payment, as well as enforcement

programs such as examination, under-reporter, substitute for return, and combined annual wage reporting. Under federal

accounting standards, unpaid assessments are categorized as taxes receivable if taxpayers agree or a court has determined the

assessments are owed. If neither of these conditions are met, the unpaid assessments are categorized as compliance

assessments. Assessments with little or no future collection potential are called write-offs. Although compliance assessments

and write-offs are not considered receivables under federal accounting standards, they represent legally enforceable claims of

the government. There is, however, a significant difference in the collection potential between compliance assessments and

receivables.

Compliance assessments and pre-assessment work in process are $83.9 billion and $76.1 billion for FYs 2021 and 2020,

respectively. The amount of allowance for uncollectible amounts pertaining to compliance assessments cannot be reasonably

estimated, and thus the net realizable value of the pre-assessment work-in-process cannot be determined. The amount of

assessments that entities have statutory authority to collect at the end of the period but that have been written off and

excluded from accounts receivable are $85.5 billion and $95.1 billion for FYs 2021 and 2020, respectively.

Federal Oil and Gas Resources

The DOI is responsible for managing the nation’s oil and natural gas resources and the mineral revenues on federal

lands, both onshore and on the Outer Continental Shelf. This management process can be broken down into six essential

analysis components: pre-leasing, post-leasing and pre-production, production and post-production, revenue collection, fund

disbursement, and compliance.

Federal Oil and Gas Resources as of September 30, 2021, and 2020

Offshore Onshore Total

(In billions of dollars) 2021 2020 2021 2020 2021 2020

Oil and lease condensate................................ 30.8................................ 32.0 19.9 ................................ 19.2 ................................ 50.7 51.2 ..................

Natural gas, wet after lease 

separation................................................................ 2.3 ................................ 2.2 20.1 ................................ 17.3 22.4 ................................ 19.5 ........

Total ................................................................ 33.1 ................................ 34.2 40.0................................ 36.5 73.1................................ 70.7 .............

The above table presents the estimated PV of future federal royalty receipts on estimated proved reserves12 as of

September 30, 2021 and 2020. The federal government’s estimated petroleum royalties have as their basis the DOE’s EIA

estimates of proved reserves. The EIA provides such estimates directly for federal offshore areas and they are adjusted to

extract the federal subset of onshore proved reserves. The federal proved reserves were then further adjusted to correspond

with the effective date of the actual production for calendar year 2019, the most recently published EIA proved reserves

report and then are projected, separately for oil and natural gas, over time to simulate a schedule of when the reserves would

be produced. Future royalties are then calculated from these production streams by applying future price estimates by the

12 Per the EIA, lease condensate is a mixture consisting primarily of pentanes and heavier hydrocarbons which is recovered as a liquid from natural gas in

lease separation facilities. This category excludes natural gas plant liquids, such as butane and propane, which are recovered at downstream natural gas

processing plants or facilities. Also per the EIA, natural gas, wet after lease separation, is the volume of natural gas remaining after removal of lease

condensate in lease and/or field separation facilities, if any, and after exclusion of nonhydrocarbon gases where they occur in sufficient quantity to render the

gas unmarketable. Natural gas liquids may be recovered from volume of natural gas, wet after lease separation, and at natural gas processing plants

(https://www.eia.gov/dnav/ng/TblDefs/ng_prod_deep_tbldef2.asp).