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Tax Administration: Federal Tax Deposit Information Can Be Processed More Efficiently

GGD-87-86 Published: Jul 02, 1987. Publicly Released: Jul 02, 1987.
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Highlights

GAO studied the efficiency of the Internal Revenue Service's (IRS) optical character recognition equipment to determine: (1) if the speed and accuracy of processing payment information are enhanced when depositories use machine-readable type to encode dollar amounts on federal tax deposit (FTD) coupons instead of handwritten figures; and (2) whether opportunities exist to increase the use of coding.

Recommendations

Recommendations for Executive Action

Agency Affected Recommendation Status
Department of the Treasury To improve the efficiency with which FTD coupons are processed and better ensure that all depositories reasonably capable of encoding dollar amounts on FTD coupons do so, the Secretary of the Treasury should establish the necessary regulations and procedures to: (1) require federal depositories to encode dollar amounts on individual FTD coupons before submitting them to IRS for processing; and (2) exempt depositories that would incur prohibitive costs in complying.
Closed – Implemented
Treasury disagreed and decided to conduct a promotion program to encourage banks to voluntarily encode their FTD coupons. The program described to GAO is very low key. Each of IRS' 10 service centers is on its own as to what it does to encourage encoding. GAO believes that kind of effort is unresponsive to GAO recommendations and will be less than fully effective, thus minimizing savings.

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Topics

Tax Policy and Administration
Collection proceduresDeposit fundsOptical scannersTax administration systemsTaxpayersOptical character recognitionTaxesFinancial institutionsStatistical dataFinancial management