Tax Administration: Delayed Tax Deposits Continue to Cause Lost Interest for the Government
GGD-93-64
Published: Mar 22, 1993. Publicly Released: Mar 22, 1993.
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Highlights
Pursuant to a congressional request, GAO provided information on the timeliness of Internal Revenue Service (IRS) deposits of tax payments, focusing on: (1) how delays in tax payment deposits affect lost interest; and (2) IRS efforts to reduce deposit delays.
Recommendations
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| Internal Revenue Service | To speed the deposit of large tax payments, the Commissioner of Internal Revenue should direct the Assistant Commissioner for Returns Processing to expedite deposits of tax payments submitted with applications for filing extensions (Form 4868) starting with the 1994 filing season. |
Closed – Not Implemented
IRS has concluded that possible alternatives, like the use of a lockbox or the use of post office boxes, are not feasible. As IRS moves further into an electronic environment, other alternatives for handling these tax payments and the associated forms may be identified.
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| Internal Revenue Service | To speed the deposit of large tax payments, the Commissioner of Internal Revenue should direct the Assistant Commissioner for Returns Processing to require that service centers collect data during the 1993 peak period to identify: (1) the type of mail having the largest tax payments; and (2) the number of tax payments received at various dollar levels. IRS should then use the data to develop other strategies for identifying and rapidly depositing large tax payments. The analysis should consider reducing below $5,000 the minimum amount of payment that is expedited during the peak period. |
Closed – Implemented
Two of IRS' 10 service centers collected data during the 1993 peak filing period on the type of mail having the largest tax payments. The data indicated that mail in large envelopes was more likely to contain large tax payments and thus should be prioritized. IRS revised its procedures to require that all centers prioritize mail to speed the deposit of large tax payments.
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