NEW YORK – Citing documents provided by an unidentified IRS executive, the Times reported that more than one-third of the 3 million Americans who are late on tax payments have had their cases sent to an inactive file since June 1999, when the IRS decided to stop pursuing them. Last year, 668,018 cases were sent to the file compared to 98 cases in 1998, the documents said.
Some of the cases involved tens of thousands of dollars. But the IRS defined them as too small to pursue given the agency's resources, said David A. Mader, assistant deputy commissioner of the IRS.
From 1992 to 2000, the IRS' staff was reduced from 115,000 to 97,000 while the number of tax returns filed increased by 10 percent. During that period, the number of audits the agency performs fell by two-thirds and seizures of property to pay back taxes declined by 99 percent.