Electronic Funds Transfer:

Analysis of Proposal for Direct Deposit of Income Tax Refunds

IMTEC-89-34: Published: Feb 24, 1989. Publicly Released: Feb 24, 1989.

Additional Materials:

Contact:

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

In response to a congressional request, GAO assessed a proposal to use electronic funds transfer to pay federal income tax refunds and other nonrecurring payments directly into taxpayers' bank accounts.

GAO found that: (1) although the Internal Revenue Service (IRS) already offered electronic refunds on electronically filed returns, the proposal would be costly to implement for paper returns; (2) a potential existed that taxpayers and IRS staff would make errors in transcribing the bank routing and transit number and the taxpayer's bank account number using paper returns; (3) the proposed provision to notify the taxpayer by mail before making the electronic payment was unnecessary, costly, and could delay refund receipt; and (4) there would be little time saved in issuing refunds by electronic transfers, rather than by checks, since a direct deposit refund would arrive only 1 to 4 days before a check. GAO also found that: (1) the Treasury Financial Management Service stated that the cost of preparing and issuing a check was 30 cents, while the cost of preparing and issuing an electronic transfer was 4 cents; and (2) until a way was found to reduce the error potential and the cost, IRS would offer the direct deposit option to taxpayers filing paper returns.

Sep 13, 2016

Sep 6, 2016

Jul 29, 2016

Jul 7, 2016

Jun 27, 2016

Jun 23, 2016

Apr 19, 2016

Apr 13, 2016

Apr 7, 2016

Mar 28, 2016

Looking for more? Browse all our products here