What Tax Examiners and Collectors, and Revenue Agents Do
Tax examiners and collectors, and revenue agents are responsible for ensuring that individuals and businesses pay the taxes they owe.
Tax examiners and collectors, and revenue agents determine how much is owed in taxes and collect tax from individuals and businesses on behalf of federal, state, and local governments. They review tax returns, conduct audits, identify taxes owed, and collect overdue tax payments.
Tax examiners and collectors, and revenue agents typically do the following:
- Review filed tax returns to determine whether credits and deductions claimed are allowed by law
- Contact taxpayers to address problems and to request supporting documentation
- Conduct field audits and investigations of income tax returns to verify information or to update tax liabilities
- Evaluate financial information, using their understanding of accounting procedures and knowledge of changes to tax laws and regulations
- Keep records on each active case including telephone numbers and actions taken
- Notify taxpayers of overpayment or underpayment and issue a refund or request additional payment
Tax examiners and collectors, and revenue agents ensure that individuals and businesses pay the appropriate amount of taxes owed, as prescribed by laws and regulations. In addition to verifying that tax returns are filed correctly, they follow up with taxpayers whose returns are questionable or who owe more money.
Different levels of government collect different types of taxes. The federal government's Internal Revenue Service (IRS) deals primarily with business and personal income taxes. State governments collect income and sales taxes. Local governments collect property and sales taxes.
Because some states base income taxes on taxpayers’ reported federal income, tax examiners working for the federal government report to the states any adjustments or corrections they make. State tax examiners then determine whether the adjustments affect the state taxpayer liability.
Tax examiners and collectors, and revenue agents have different duties and responsibilities:
Tax examiners typically deal with simple tax returns filed by individual taxpayers who claim few deductions and by small businesses. Tax examiners also may contact individual taxpayers in order to resolve outstanding problems with their returns.
Much of a tax examiner’s job involves making sure that tax credits and deductions claimed by taxpayers are lawful. If a taxpayer owes additional taxes, tax examiners adjust the total amount by assessing fees, interest, and penalties and then notify the taxpayer of the total amount owed.
Revenue agents, called internal revenue agents in the IRS, specialize in tax-related accounting. Like tax examiners, they review returns for accuracy. However, revenue agents handle the complex tax returns of large businesses and corporations.
Some experienced revenue agents focus exclusively on a particular area, such as multinational business. Regardless of their specialty, revenue agents must keep up to date with changes in tax laws and regulations.
Tax collectors, also called internal revenue officers in the IRS, deal with overdue accounts. The process of collecting an overdue payment starts with the revenue agent or tax examiner sending a report to the taxpayer. If the taxpayer makes no effort to pay, the case is assigned to a tax collector.
When a tax collector takes a case, he or she first sends a notice to the taxpayer. The tax collector then works with the taxpayer to settle the debt. Settlement may involve setting up a plan in which the amount owed is paid back in small amounts over time.
When delinquent taxpayers claim that they cannot pay their taxes, collectors investigate and verify the claims. Tax collectors research information on taxpayer financial statements or mortgages and locate taxpayer-owned items of value through third parties, such as local departments of motor vehicles. Ultimately, they must decide whether the IRS should place a lien—a claim on an asset such as a bank account, real estate, or an automobile—to settle a debt. Tax collectors also have the authority to garnish wages—that is, take a portion of earned wages—to collect taxes owed.