IRS Ignores $16 Billion in Unpaid Taxes

Struggling with rising workloads and stagnant staff levels, the Internal Revenue Service walked away from more than 2 million delinquent tax accounts last year, totaling nearly $16.5 billion, according to the Treasury Department.

Last year, the IRS opted not to pursue 2.25 million tax cases, costing the government $14.1 billion in individual income taxes and $2.3 billion in corporate taxes, the Treasury document states.

The median size of the delinquent accounts was $14,000. The largest account not being pursued involved more than $50 million.

"That the IRS has deferred collection on more than $16 billion in delinquent tax debt is but another example of one step forward, two steps back," said Sen. Max Baucus (D-Mont.), the ranking minority member of the Senate Finance Committee, in a written statement. "The especially troubling fact is that the agency knows who owes these back taxes, but isn't taking the time to make the 30-cent phone call that could result in hundreds, thousands, or even millions of dollars in lost revenue."