Summary

Electronic filing shows the potential benefit of a paperless tax filing system. Although GAO supports the need to modernize the Internal Revenue Service (IRS) and the movement toward electronic filing, it is concerned about the growing instances of electronic filing fraud. IRS has not yet shown how an electronic tax filing system can be adequately safeguarded against fraud. GAO also remains concerned about inadequate control of unauthorized access by IRS employees to taxpayer records. Control over access to these records cannot be left to implementation of the IRS' Tax Systems Modernization program--which is several years away--but requires prompt and effective implementation of security improvements.