Liquidation of Dishonored Checks now on Hand

April 18, 1966 REVENUE MEMORANDUM ORDER NO. 29-66 SUBJECT : Liquidation of Dishonored Checks now on hand In order to liquidate all dishonored checks in the hands of Collection Agents of the Bureau of Internal Revenue there is hereby prescribed the plan and procedures for such purpose. This program as part of our accelerated and intensified collection efforts is purposely designed to (1) prevent taxpayers from resorting to loopholes in our procedures and laws by submitting checks which will not be honored upon presentation to the bank and (2) discourage further delinquency by moving in as quickly as possible to make taxpayers realize that there is no benefit in issuing such checks. cdt Annex A which outlines the plan and procedures of this project is attached hereto as an integral part of this Order. Any further detailed instructions necessary for field operators in this connection shall be subsequently issued by the Management and Planning Department. This order takes effect immediately. (SGD.) MISAEL P. VERA Commissioner of Internal Revenue ANNEX "A" PROJECT: Liquidation of Dishonored Checks Now on Hand. PLAN 1. Inventory develop a valid and reliable list by a. requiring a detailed list from the collection agents holding the dishonored checks, and b. verifying and adding to the lists from its records by the Accounting Division. 2. Control establish accounting control by a. listing all items on magnetic tape and printing registers, and b. setting up general ledger control account's over the "collectibles." 3. Collection insure attention and collection by a. placing managerial and control responsibility on the respective regional directors, and b. holding the identified collection agents responsible for results, even though enforced action may be required. cdta PROCEDURE Operator : Operator to be performed: Collection 1. Make immediate arrangements to have all Department dishonored checks to be controlled through the national office beginning on May 1, 1966. (The plan and procedure for this process will be the subject of another report.) Accounting: 2. Require each collection agent now holding a dishonored check to report all on hand as of April 30, 1966, in a format to be designed but containing the following information: a. Taxpayer's name and address, b. Maker's name and address, if different from taxpayer, c. Check number and drawee bank, d. Date issued, e. Amount, f. Kind of tax for which given, and g. Number and date of official receipt given. Collection 3. Prepare the required report and submit it at the Agent close of business, April 30, 1966. 4. Make immediate report on item by item basis covering all items which may have been in transit on April 30, 1966, and received directly shortly thereafter. Accounting 5. Verify the reports received from the collection agents, Division add to them to make them complete, and transmit the verified and completed reports in one transmittal to the data processing center. Data P C 6. Key punch & key verify all cases reported. 7. Convert cards to tape, and accumulate total and compare with total of reports submitted by Accounting. 8. Sort records to respective regions. 9. Print the following output: a. a three part letter to the taxpayer form and content to be designed, and b. a three part list for the cases in each region. 10. Deliver the output as follows: a. All parts of the letter and parts 1 & 2 (original and duplicate) of the list to the Collection Department, and b. part 3 of the list to the Accounting Division. Collection 11. Deliver all parts of the letter and part 1 of the list to Department the respective Regional Directors. 12. Retain part 2 for functional supervision. Accounting 13. Open a control account in the general ledger, using part 3 of Division the list as a journal, by debiting "Dishonored Checks Collectible PY", and crediting "Revenue Receipts Deposited PY" for the entire amount. 14. Make the necessary adjustment entries by class of the previously credited as tax collected. 15. Write name of collector to whom case will be assigned on the three part assembly of the letter to the taxpayer. 16. Give parts 1 & 2 to the collector. 17. Keep part 3 of the letter with part 1 of the list, and maintain control of the activity through these two documents. Collector 18. Present the original of the letter to the taxpayer, and collect the full amount of the dishonored check and penalty in some form of payment that cannot again result in a dishonored check. 19. Submit the payment for deposit, using the receipt form on the original notice of dishonor. 20. Report the collection on the above form and attached to the second part of the letter which was received from the region. Make the report directly to the region, as the region is keeping strict control on this operation. Region 21. Make the proper record of collection on the controls. 22. Accumulate the collection documents until the close of the week, and then forward them to the Collection Department in the National Office. Collection 23. Submit all reports of Collection to DPC once a week. Department DPC 24. Apply the payment reports to the respective dishonored checks collectible accounts, and produce a register of the payments posted that week. 25. Send part 1 of the Registers of Payments to Accounting, and part 2 to Collection Department. Accounting 26. Debit the 'Revenue Receipts Deposited PY" account and Division credit the Dishonored Checks Collectible PY" account. 27. When all the accounts in this project have been closed, make the proper entries contra the adjustment entries opened in instruction numbered 14.