Wednesday, April 6, 2011

GAO Report Offers Snapshot Of IRS's Ongoing Performance During 2011 Filing Season

Another GAO report released on March 31 offers a snapshot of IRS's ongoing performance during the 2011 filing season. (GAO-11-481) The stated purpose of the report, which was requested by Capitol Hill, was to assess the agency's efforts to streamline tax return processing, conduct pre-refund compliance checks, improve taxpayer service, and issue refunds through the use of debit cards. As of March 18, IRS processed 73 million returns and issued 65 million refunds totaling $193 billion. The percentage of e-filed returns is growing, GAO found, noting that it costs 19 cents to process an e-filed return compared to $3.29 for a paper return. The agency's inability to accept certain returns until mid-February had a blowback effect on paid preparers and tax preparation software providers, said GAO, observing that returns through mid-February were down by 21% compared to 2010. Other GAO findings included that IRS has rejected 13% of e-filed returns for reasons such as incorrect personal identification numbers; telephone call volume is up 13%; the wait times to speak to an assistor averaged 10 minutes, which is a bit longer than last year; and visits to the IRS Web site grew by 9%. “It is too early to tell the extent to which the various debit card offers are being accepted by taxpayers,” GAO said. Once again, the report referred to IRS's lack of math error authority (MEA) to review prior returns to verify lifetime limits on amounts that can be claimed (for example, Residential Energy Credits). “Additional MEA to verify compliance with lifetime limits on credits and deductions has advantages, compared to audits, for both taxpayers and IRS,” GAO said. The report can be found at

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