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As Tax Day Arrives, How Is IRS Managing the Filing Season?

Posted on April 15, 2014

Today is the deadline for filing federal individual income tax returns. By this point in time, if you needed to ask IRS questions about tax laws or your account, you’ve probably already been through the process at least once. If you didn’t ask IRS a question, you probably know someone who did: in 2013, IRS received 93.5 million phone calls and 21 million pieces of correspondence. Add that to processing about 142 million tax returns and issuing more than 100 million refunds last year, and IRS has an enormous undertaking on their hands. Each year, we track how well IRS does its job during the tax filing season. Here are some of the things we found in our reviews of recent filing seasons.

Return Processing: IRS’s 2012 estimates show a savings of about $3.13 per electronically filed return. To save money, IRS has been encouraging taxpayers to file returns electronically instead of on paper. In the 2013 filing season, 84 percent of individual tax returns were e-filed.

Telephone service and correspondence: As mentioned previously, IRS received 93.5 million phone calls and 21 million pieces of correspondence in the 2013 tax filing season from taxpayers asking tax law questions or seeking information about their accounts. One way IRS tries to manage the phone call volume is through prerecorded answers to commonly asked questions. These are much cheaper for IRS to answer—38 cents per call according to IRS—than if a taxpayer were to speak to an IRS representative, which costs $33 per call. IRS representatives answered 45.8 million calls while IRS automation answered another 20.4 million calls. Callers who wanted to speak to a representative had to wait 15.5 minutes on average. As with telephone service, IRS struggles to keep up with its correspondence. In the 2013 filing season, almost half of the correspondence was overage, meaning IRS did not meet its own goals for response time. In both areas, we found that the widening gaps highlighted the importance of fully implementing our 2012 recommendation to identify specific steps to manage service based on assessments of time frames, demand, capabilities, and resources.

Website: Use of the IRS website increased in 2013, which agency officials attributed to the site's being redesigned and the launch of new tools such as, “Where’s My Amended Return?” However, the IRS website does not currently allow taxpayers to access their accounts. Therefore, we recommended that IRS implement a long-term strategy to improve web services for taxpayers.  Last month, IRS officials told us that a long-term strategy for improving web services will be completed in February 2015.

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