This management advisory report provides information developed to assist Internal Revenue Service (IRS) management in responding to past congressional questions about the IRS’ Revenue Protection Program.¹

In a May 8, 1997, House Ways and Means Committee hearing, Chairman Bill Archer asked IRS executives what percentage of electronic returns (e-file) the IRS "rejected" (declined to accept for processing), ² and how many of the rejected e-file returns were subsequently filed as paper returns. The Assistant Commissioner (Criminal Investigation) responded that IRS systems did not count the number of returns rejected and did not provide for tracking whether rejected e-file returns were later submitted on paper; therefore, the IRS could not answer the questions.

Subsequently, the Assistant Commissioner (Criminal Investigation) requested that the IRS Inspection Service (now Treasury Inspector General for Tax Administration (TIGTA)), attempt to develop the information requested by Chairman Archer. The Chief Operations Officer endorsed this request, which was renewed in 1998.

We developed the following information which answers the congressional questions:

We believe IRS management should develop capabilities and a methodology similar to the one we used on this project. The results of this project provided valuable additional information beyond that originally requested. Also, this capability would enable IRS analysts to address other difficult-to-measure Revenue Protection issues.

Management’s Response: The National Director (Tax Refund Fraud) responded that the information provided addressed the two congressional questions posed to IRS executives. Management’s complete response to the draft report is included as Appendix IV.