IRS looks to make mobile, cashless payments for overdue debts a reality

The IRS is looking at ways to make paying back delinquent debts as easy as making a purchase through commonplace tools like Venmo, or Square's credit-card readers...

The IRS is looking at ways to make paying  delinquent debts as easy as making a purchase through commonplace tools like Venmo, or Square’s credit-card readers that plug into smartphones.

The agency, according to a request for information filed last Thursday, looks to provide “innovative and state-of-the-art, alternative, non-cash payment methods” to revenue officers who knock on doors to collect debts owed by taxpayers.

The RFI asks vendors to provide feedback about possibly using mobile applications, “mobile payment devices” and other tools to facilitate on-the-spot payments.

The agency has asked vendors whether their mobile apps would be compatible with iOS, Android or other mobile operating platforms.

“Any method must also provide for security that would protect any Personally Identifiable Information (PII) and must comply with security protocols for electronic transmission of financial data,” the IRS wrote in its RFI.

If a revenue office wants to collect a payment from a taxpayer in the field, but in an area that lacks reliable cellular service, the IRS has asked vendors how their app might handle the situation.

“Revenue Officers … may be in areas that lack good infrastructure, particularly with respect to internet connectivity. Wireless internet availability may or may not be available, and satellite communications may be necessary,” the agency wrote.

Prospective mobile payment device vendors must ensure the devices can read the magnetic strip on credit cards, and comply with chip-and-PIN technology.

In those cases where revenue officers are operating in areas with limited reception, mobile devices must securely “capture, process, store and forward the credit card request” once they reconnect with the network.

Despite the push for a more digital experience, mobile-device vendors must still ensure that the equipment can print out receipts for taxpayers.

The Census Bureau, in the lead-up to the 2020 population count, has navigated around similar mobile technology challenges.

Next year, the agency’s enumerators will follow-up with households that didn’t respond to the decennial count using iPhones loaded with a custom app. When knocking on doors in areas with reduced connectivity, enumerators’ phones will store responses, but will transmit those responses back to the Census Bureau’s data vault once it regains a network connection.

The RFI follows National Taxpayer Advocate Nina Olson’s annual report to Congress, in which she told lawmakers revenue officers “are not given the appropriate tools to effectively collect revenue,” and that the IRS lacks metrics to evaluate their effectiveness.

In addition, Olson’s report highlights conversations her office has had with stakeholder groups, in which tax professionals complained about the difficulty in arranging in-person meetings with revenue officers, or even having them return phone calls.

“By the time a Revenue Officer makes contact, taxpayers may be unable to pay the debt in full because the debt has grown so large as a result of accrued penalties and interest, or because the taxpayer’s financial condition has deteriorated over time,” Olson wrote.

In some cases, revenue collection has even spilled over into violence. Special agents working for the Treasury Inspector General for Tax Administration (TIGTA) arrested a tax provider last May after assaulting a revenue office with a shotgun.

“In the last several years, threats directed at the IRS have remained the second largest component of TIGTA’s Office of Investigations’ work,” TIGTA auditor wrote in its semiannual report to Congress.

The IRS, in most cases, will first notify taxpayers through the mail before calling or knocking on their doors.

However, in certain cases, including when someone has an overdue tax bill or delinquent tax return, an agency revenue office may pay a visit to a taxpayer’s home or business.

“Generally, home or business visits are unannounced,” the IRS wrote in an October 2017 press release.

Copyright © 2024 Federal News Network. All rights reserved. This website is not intended for users located within the European Economic Area.

Related Stories

    Alyson Fligg/Labor DepartmentClare Martorana

    Why OMB’s human-centered policy design effort is paying off

    Read more