Tax Administration: Electronic Filing Falling Short of Expectations
GGD-96-12
Published: Oct 31, 1995. Publicly Released: Nov 20, 1995.
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Highlights
GAO reviewed the Internal Revenue Service's (IRS) plans to maximize electronic filing, focusing on: (1) IRS progress in broadening the use of electronic filing; (2) the availability of data needed to develop an electronic filing strategy; and (3) the implications for IRS if it does not significantly reduce its paper-processing workload.
Recommendations
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| Internal Revenue Service | To help better ensure the success of IRS modernization, the Commissioner of Internal Revenue should identify those groups of taxpayers who offer the greatest opportunity to reduce IRS paper-processing workload and operating costs if they were to file electronically and develop strategies that focus IRS resources on eliminating or alleviating impediments that inhibit those groups from participating in the program, including the impediment posed by the program's cost. |
IRS issued a strategic plan for electronic tax administration, of which electronic filing is a major component, on December 3, 1998.
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| Internal Revenue Service | To help better ensure the success of IRS modernization, the Commissioner of Internal Revenue should adopt goals for electronic filing that focus on reducing IRS paper-processing workload and operating costs. These goals could be used in addition to the existing electronic filing goal to assess IRS progress in achieving the intended benefits of electronic filing. |
IRS did not set the kind of goals anticipated by the recommendation. Instead, it has a new overall goal that was mandated by the IRS Restructuring and Reform Act of 1998. The new goal is to have 80 percent of all tax and information returns filed electronically by 2007.
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| Internal Revenue Service | To help better ensure the success of IRS modernization, the Commissioner of Internal Revenue should prepare contingency plans for the possibility that the electronic filing program will fall short of expectations. |
When GAO issued this report, IRS' modernization plans called for reducing the number of service centers that process paper returns from 10 to 5. The recommendation derived from a concern that if the electronic filing program fell short of expectations, IRS' paper processing workload would be more than expected and thus might exceed the capacity of the 5 remaining paper processing centers. IRS has since backed away from its plan to reduce the number of paper processing centers, at least in the foreseeable future. As a result, this recommendation is no longer applicable.
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