TIGTA Says E-File Program For Large Corporations Provides Meaningful Results

Corporate audits are taking less time and generating more additional recommended taxes since electronic filing via IRS's Modernized e-File system was mandated for large corporations, the Treasury Inspector General for Tax Administration (TIGTA) said in an audit released on July 12. (Audit Report No. 2011-30-048) However, due to numerous projects to improve the agency's audit process for corporations, “it is very difficult, if not impossible,” to precisely evaluate the effect e-filing is having on audit productivity, TIGTA said. As described in the audit, the e-filing mandate has resulted in a reduction in the costs associated with the inefficiencies of manually processing paper returns. Customer service has also been enhanced, and there has been an increase in the availability of taxpayer information. In addition, corporate taxpayers state that e-filing has reduced the time and expense they spend filing their tax returns and related forms. On the flip side of the coin, a “key benefit” of e-filing has not been achieved, namely the capability to eliminate more compliant taxpayers from its audit stream. Nevertheless, the e-file program is “providing meaningful results,” said J. Russell George, the inspector general. The audit is available at http://www.treasury.gov/tigta/auditreports/2011reports/201130048fr.pdf.