Enhancing Electronic Filing
The Internal Revenue Service's (IRS) ability to detect and pursue noncompliance by taxpayers is constrained because only certain information reported by taxpayers is available in electronic databases. IRS officials have estimated that having all information on tax returns available electronically could increase annual collections from one enforcement program by $175 million annually. In addition, IRS might save tens of millions of dollars annually on tax-return processing costs. To make progress toward obtaining complete electronically available data, GAO recommended that the Commissioner of Internal Revenue direct the appropriate officials to determine
- actions needed to require software vendors to include bar codes on printed individual income-tax returns and the cost of those actions;
- the benefits, in terms of processing costs and improved enforcement, of having all return information available electronically; and
- how much electronic filing would have to increase, either through electronic filing mandates or bar coding, for the benefits of transcribing all remaining paper returns to exceed the costs.
IRS agreed with GAO's recommendations and outlined steps IRS planned to take.
Separately, to increase the portion of returns filed electronically, GAO said that Congress should consider mandating electronic filing by paid tax preparers meeting criteria such as a threshold number of returns filed. As of October 2008, no legislative changes have occurred about mandating electronic filing by paid preparers.
^ Back to topKey Reports
- Tax Administration: 2007 Filing Season Continues Trend of Improvement, but Opportunities to Reduce Costs and Increase Tax Compliance Should be Evaluated
- GAO-08-38, November 15, 2007
- Summary (HTML) Highlights Page (PDF) Full Report (PDF, 50 pages) Accessible Text Recommendations (HTML)
- Tax Administration: Most Filing Season Services Continue to Improve, but Opportunities Exist for Additional Savings
- GAO-07-27, November 15, 2006
- Summary (HTML) Highlights Page (PDF) Full Report (PDF, 62 pages) Accessible Text Recommendations (HTML)
