IRS to develop system to track missing payments

The IRS will develop an electronic system to track missing taxpayer payments, the agency said in response to a watchdog report that found the IRS relies on manual processes to assign and monitor such payments.

The IRS agreed with the recommendations in a May 21 report from the Treasury Inspector General for Tax Administration (TIGTA), which said the IRS has already implemented an interim process to track “hardcore payment tracers” while working toward a broader case management system.

From fiscal years 2022 through 2024, the IRS received about $3.2 billion in unidentified payments — funds that could not be immediately matched to a taxpayer account due to missing or incomplete information. The agency applied about $2.3 billion, or 70%, to taxpayer accounts, TIGTA said.

Another $741 million was removed from inventory or transferred to excess collections after remaining unresolved for a year, and about $218 million remained unresolved, the report said. Read more.