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ExpectMore.govExpectMore.gov home pageEXPECT FEDERAL PROGRAMS TO PERFORM WELL, AND BETTER EVERY YEAR.
 
Program Assessment

Program

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Internal Revenue Service Submission Processing

This program processes 224 million tax returns and one and a half billion information returns (such as bank reports on taxpayer's interest income) each year and issues 109 million refunds. In 2005, more than half of individual tax returns were submitted electronically.

Rating

What This Rating Means

PERFORMING
Moderately Effective

In general, a program rated Moderately Effective has set ambitious goals and is well-managed. Moderately Effective programs likely need to improve their efficiency or address other problems in the programs' design or management in order to achieve better results.
  • More Americans are electronically filing their taxes. Electronic filing is growing more than 10 percent per year. However, this growth is not sufficient for IRS to meet the legislative goal of 80 percent electronic filing by 2007. Congress has not yet acted on the Administration's proposals to accelerate the increase in electronic filing.
  • Every return converted from paper to electronic filing saves the IRS $2.15 in processing costs. More importantly, electronically filed returns have a less than one percent error rate compared to five percent for paper filed returns, saving taxpayers time and money. Finally, according to the annual American Customer Satisfaction Results report electronic filers have high satisfaction rates.
  • Based on IRS' recently completed tax gap study, approximately 13 percent of refund dollars (excluding earned income tax credit refunds) are paid in error. With current third party reporting and technology, IRS is unable to identify and prevent these errors during processing.

Improvement Plan

About Improvement Plans

We are taking the following actions to improve the performance of the program:

  • Seeking legislative changes to promote electronic filing, including greater authority to require electronically-filed returns.
  • Setting goals by 2007 for reduced taxpayer filing burden resulting from the time and expense of preparing and filing their returns.
  • Using a single cost based efficiency measure by 2008 (cost per return processed).

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