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Tax Administration: Opportunities to Increase the Use of Electronic Filing

GGD-93-40 Published: Jan 22, 1993. Publicly Released: Jan 29, 1993.
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Highlights

Pursuant to a congressional request, GAO discussed steps the Internal Revenue Service (IRS) can take to increase the use of electronic filing.

Recommendations

Recommendations for Executive Action

Agency Affected Recommendation Status
Internal Revenue Service The Commissioner of Internal Revenue should take steps to broaden the electronic filing of individual income tax returns. Those steps should include: (1) identifying market segments; and (2) specifying national strategies for attracting those segments to electronic filing, including strategies to encourage employers and financial institutions to provide electronic filing services to their employees and customers.
Closed – Implemented
IRS formed an executive-led task group to develop a comprehensive electronic filing strategy. That group produced a report that spelled out 21 initiatives for broadening the use of electronic filing. Each of the initiatives included an action plan and identified the organization(s) responsible for implementing the plan.
Internal Revenue Service IRS should assess the feasibility of: (1) enabling taxpayers to file electronically through their personal computers; and (2) providing broader access to electronic filing at IRS field offices and other convenient locations.
Closed – Not Implemented
GAO is closing this recommendation because it will be issuing another report on electronic filing in the Fall 1995. This report follows up on IRS' progress in broadening the appeal of and access to electronic filing and includes recommendations that encompass those that were included in this report.
Internal Revenue Service IRS should determine what forms and schedules might be added to the list of documents that can be filed electronically to broaden the accessibility of electronic filing.
Closed – Implemented
IRS said that nine more forms and schedules would be included among those that could be filed electronically in 1994 and that it planned to convert the remaining nonelectronic forms and schedules as soon as possible. According to IRS, one of the assumptions on which the electronic filing task group predicated its work was that all forms and schedules could be received electronically.
Internal Revenue Service IRS should follow through on plans to install return retrieval capability in the nonelectronic filing service centers and, thus, eliminate the need to copy and transship tax returns to other locations.
Closed – Not Implemented
According to IRS, funding constraints the past several years prevented implementation of this recommendation. Because the funding situation is not expected to change and given other funding priorities, GAO is closing this recommendation as "action not intended."
Internal Revenue Service IRS should take steps to avoid the need for redundant correction of errors on electronic returns.
Closed – Implemented
IRS accelerated its schedule for implementing a one-step error correction process. According to IRS, the process was in use in 1993 and resulted in increased efficiency.
Internal Revenue Service IRS should prepare a contingency plan to ensure that sufficient capacity is available to process electronic returns until its Tax Systems Modernization replacement is operational.
Closed – Implemented
The electronic filing task group addressed the issue of capacity as it related to two of the three electronic filing subsystems and laid out steps it felt were needed to meet capacity needs for the next 2 or 3 years. According to IRS, the third subsystem was recently upgraded and should have sufficient capacity to handle volumes through 1996.

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Topics

Cash managementDeposit fundsElectronic funds transferFederal taxesInterest ratesLossesPaymentsPersonal income taxesTax administration systemsTax returns