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The Taxpayer Advocate Report to Congress regarding Internal Revenue Service (IRS) Collection Practices expressed concern about the IRS collection procedures for IRS debt when it inflicts "unnecessary or disproportionate harm" on the taxpayer.

Not only does the practice hurt the taxpayer but it also negatively affects the money that the IRS collects for back taxes. IRS believes that the more aggressively they enforce collection actions against taxpayers such as liens and levies, the more money they collect for back taxes or tax debt. The reality, however, points to the opposite results. The Taxpayer Advocate believes that the "data don't bear that out." The report to congress states that since 1999 the IRS increased tax lien filings almost 475 percent and increased tax levies whether it is bank levies or wage garnishment by 600 percent. With this massive attack, one would expect that the IRS is now doing a great collection job. The numbers reveal that collection dollars (adjusted for inflation) went down by 7 percent over that period.

So we previously said that tax liens, bank levies, wage garnishments or other levies did not help the IRS if not actually hurt them as the Advocate suggested. This tax collection mobilization also inflicts considerable damage on the taxpayers who have IRS debts or back taxes. They say that when the lien is filed you immediately lose 100 points on your credit score. If you were beginning to recover and you built your credit score to 700 now they put you back at 600, and if you are at 600 and on your way to gaining access to the financial system and possibly the American dream, they put you back at 500.

Employers, credit card companies, renters, mortgage companies and even insurance companies check your credit. They practically shut you off from any decent opportunities. The question is for what? What is the IRS gaining by this? In many instances, they are gaining nothing. It is sadly funny when I hold a conference with an officer of the IRS to negotiate an Installment Agreement, and after we successfully accomplish the agreement, the IRS officer gives me the recital that "Now that we have put your client on Installment Agreement, we will file a lien against the client."

When this first happened I was shocked and I reasoned, "Before the agreement my client had no lien, now we do the agreement and we get hit by a lien?" I felt something was wrong. But soon I got trained by the system and when I do an installment agreement, I respond with all dignity and pride in my knowledge, "Yes sir, but of course, sir." Thus we have learned to expect anomalies.

If we as practitioners fail to voice our opinion, at least congress now based on peoples' complaints is watching the problem. The problem is that the Advocate reported that although the IRS has been advised of the consequences of their actions, they are under-utilizing Offers in Compromise.

As the Taxpayer Advocate puts it, the IRS acceptance of offers in compromise stands at an all-time low. The IRS has filed 1 million liens against taxpayers. To put it in perspective, there are countries in this world whose population equals 1 million people. So in this case such a country would be one under siege. Remarkable? Perhaps next time we can propose some solutions along with those proposed by the Taxpayer Advocate. Dean Alexander Sr. has more than 30 years experience as a CPA and tax consultant. Reach him at www.resolvemytaxes.com.