Tax Examiners, Collectors, and Revenue Agents - What They Do
Taxes are one of the certainties of life, and as long as governments collect taxes, there will be jobs for tax examiners, collectors, and revenue agents. By reviewing tax returns, conducting audits, identifying taxes payable, and collecting overdue tax dollars, these workers ensure that governments obtain revenues from businesses and citizens.
Tax examiners do similar work, whether they are employed at the Federal, State, or local government level. They review filed tax returns for accuracy and determine whether tax credits and deductions are allowed by law. Because many States assess individual income taxes based on the taxpayer's reported Federal adjusted gross income, tax examiners working for the Federal Government report any adjustments or corrections they make to the States. State tax examiners then determine whether the adjustments affect the taxpayer's State tax liability. At the local level, tax examiners often have additional duties, but an integral part of the work still includes the need to determine the factual basis for claims for refunds.
Tax examiners usually deal with the simplest tax returns—those filed by individual taxpayers with few deductions or those filed by small businesses. At the entry level, many tax examiners perform clerical duties, such as reviewing tax returns and entering them into a computer system for processing. If there is a problem, tax examiners may contact the taxpayer to resolve it.
Tax examiners also review returns for accuracy, checking taxpayers' math and making sure that the amounts that they report match those reported from other sources, such as employers and banks. In addition, examiners verify that Social Security numbers match names and that taxpayers have correctly interpreted the instructions on tax forms.
Much of a tax examiner's job involves making sure that tax credits and deductions claimed by taxpayers are legitimate. Tax examiners contact taxpayers by mail or telephone to address discrepancies and request supporting documentation. They may notify taxpayers of any overpayment or underpayment and either issue a refund or request further payment. If a taxpayer owes additional taxes, tax examiners adjust the total amount by assessing fees, interest, and penalties and notify the taxpayer of the total liability. Although most tax examiners deal with uncomplicated returns, some may work with more complex tax issues, such as pensions or business net operating losses.
Revenue agents specialize in tax-related accounting work for the U.S. Internal Revenue Service (IRS) and for equivalent agencies in State and local governments. Like tax examiners, they audit returns for accuracy. However, revenue agents handle complicated income, sales, and excise tax returns of businesses and large corporations. As a result, their work differs in a number of ways from that of tax examiners.
Entry-level Federal revenue agents usually audit tax returns of small businesses whose market specializations are similar. As they develop expertise in an industry, such as construction, retail sales, or finance, insurance, and real estate, revenue agents work with tax returns of large corporations.
Many experienced revenue agents specialize; for example, they may focus exclusively on multinational businesses. But all revenue agents working for the Federal Government must keep abreast of the lengthy, complex, and frequently changing tax code. Computer technology has simplified the research process, allowing revenue agents Internet access to relevant legal bulletins, IRS notices, and tax-related court decisions. Revenue agents also use computers to analyze data and identify trends that help pinpoint tax offenders.
At the State level, revenue agents have duties similar to those of their counterparts in the Federal Government. State revenue agents use revenue adjustment reports forwarded by the IRS to determine whether adjustments made by Federal revenue agents affect a taxpayer's taxable income in the eyes of the States. In addition, State agents consider the sales and income taxes for their own States.
At the local level, revenue agents have varying titles and duties, but they still perform field audits or office audits of financial records for business firms. In some cases, local revenue agents also examine financial records of individuals. These local agents, like their State counterparts, rely on the information contained in Federal tax returns. However, local agents also must be knowledgeable enough to apply local tax laws regarding income, utility fees, or school taxes.
Collectors, also called revenue officers in the IRS, deal with delinquent accounts. The process of collecting a delinquent account starts with the revenue agent or tax examiner sending a report to the taxpayer. If the taxpayer makes no effort to resolve the delinquent account, the case is assigned to a collector. When a collector takes a case, he or she first sends the taxpayer a notice. The collector then works with the taxpayer on how to settle the debt.
In cases in which taxpayers fail to file a tax return, Federal collectors may request that the IRS prepare the return on a taxpayer's behalf. In other instances, collectors are responsible for verifying claims that delinquent taxpayers cannot pay their taxes. They investigate these claims by researching court information on the status of liens, mortgages, or financial statements; locating assets through third parties, such as neighbors or local departments of motor vehicles; and requesting legal summonses for other records. Ultimately, collectors must decide whether the IRS should take a lien—a claim on an asset such as a bank account, real estate, or an automobile—to settle a debt. Collectors also have the discretion to garnish wages—that is, take a portion of earned wages—to collect taxes owed.
A big part of a collector's job at the Federal level is imposing and following up on delinquent taxpayers' payment deadlines. For each case file, collectors must maintain records, including contacts, telephone numbers, and actions taken.
Like tax examiners and revenue agents, collectors use computers to maintain files. Computer technology also gives collectors access to data to help them identify high-risk debtors—those who are unlikely to pay or are likely to flee. Collectors at the IRS usually work independently. However, they call on experts when tax examiners or revenue agents find fraudulent returns, or when the seizure of a property will involve complex legal steps.
At the State level, collectors decide whether to take action by reviewing tax returns filed in the State where they work. Collection work may be handled over the telephone or turned over to a collector who specializes in obtaining settlements. These collectors contact people directly and have the authority to issue subpoenas and request seizures of property. At the local levels, collectors have less power than their State and Federal counterparts. Although they can start the processes leading to the seizure of property and garnishment of wages, they must go through the local court system.
Tax examiners, collectors, and revenue agents work in clean, pleasant, and comfortable office settings. Depending upon work assignment, travel may be necessary. Revenue agents at both the Federal and State levels spend a significant portion of their time in the offices of private firms, accessing tax-related records. Some agents may be permanently stationed in the offices of large corporations with complicated tax structures. Agents at the local level usually work in city halls or municipal buildings. Collectors travel to local courthouses, county and municipal seats of government, businesses, and taxpayers' homes to look up records, search for assets, and settle delinquent accounts.
Stress can result from the need to work under a deadline. Collectors also must face the unpleasant task of confronting delinquent taxpayers.
Tax examiners, collectors, and revenue agents generally work a 40-hour week, although some overtime might be needed during the tax season. State and local tax examiners, who may review sales, gasoline, and cigarette taxes instead of handling tax returns, may have a steadier workload year-round.
In the Federal Government, workers must have a bachelor's degree or a combination of some college education and related experience. After being hired by the IRS, employees can expect to attend several multiweek training seminars. In State and local governments, workers often have an associate degree, some college-level business classes and specialized experience, or a high school diploma and specialized experience.
For more advanced entry-level positions, applicants often must have a bachelor's degree. Candidates may sometimes qualify without a bachelor's degree, however, if they can demonstrate experience working with tax records, tax laws and regulations, documents, financial accounts, or similar records.
Specific education and training requirements vary by occupational specialty.
Tax examiners usually must have a bachelor's degree in accounting or a related discipline or a combination of education and full-time accounting, auditing, or tax compliance work. Tax examiner candidates at the IRS must have a bachelor's degree or one year of full-time specialized experience, which could include full-time work in accounting, bookkeeping, or tax analysis. After they are hired, tax examiners receive some formal training. In addition, annual employer-provided updates keep tax examiners current with changes in procedures and regulations.
Collectors usually must have some combination of college education and experience in collections, management, customer service, or tax compliance, or as a loan officer or credit manager. A bachelor's degree is required for employment as a collector with the IRS. No additional experience is required, and experience may not be substituted for the degree. Degrees in business, finance, accounting, and criminal justice are good backgrounds.
Entry-level collectors receive formal and on-the-job training under an instructor's guidance before working independently. Collectors usually complete initial training by the end of their second year of service, but may receive advanced technical instruction as they gain seniority and take on more difficult cases. Also, collectors are encouraged to continue their professional education by attending meetings to exchange information about how changes in tax laws affect collection methods.
Revenue agents usually must have a bachelor's degree in accounting, business administration, economics, or a related discipline or a combination of education and full-time business administration, accounting, or auditing work. Revenue agents with the IRS must have either a bachelor's degree or 30 semester hours of accounting coursework along with specialized experience. Specialized experience includes full-time work in accounting, bookkeeping, or tax analysis.
Tax examiners, collectors, and revenue agents work with confidential financial and personal information; therefore, trustworthiness is crucial for maintaining the confidentiality of individuals and businesses. Applicants for Federal Government jobs must submit to a background investigation.
Collectors need good interpersonal and communication skills because they deal directly with the public and because their reports are scrutinized when the tax agency must legally justify attempts to seize assets. They must be able to negotiate well and deal effectively with others in potentially confrontational situations.
Revenue agents need strong analytical, organizational, and time management skills. They also must be able to work independently, because they spend so much time away from their home office, and they must keep current with changes in the tax code and laws. Revenue agents that travel need a valid driver’s license to perform their duties.