Treasury Inspector General for Tax Administration
July 12, 2011
TIGTA - 2011-35
Contact: Karen Kraushaar
WASHINGTON - A Federal requirement that the tax returns of large corporations be filed and processed electronically has resulted in cost savings to the corporations and to the Government, according to a new report from the Treasury Inspector General for Tax Administration (TIGTA).
In January 2005, the Department of the Treasury issued temporary regulations that required corporations with assets of $50 million or more and that file 250 or more returns per year to e-file their corporate tax returns. In November 2007, the Treasury Department expanded that requirement to include corporations with $10 million or more in total assets. TIGTA’s audit found that this has reduced the costs and inefficiencies associated with manually processing paper returns, enhanced customer service and improved the availability of taxpayer information.
TIGTA’s audit found that e-filing by large corporations creates faster processing times and lower error rates.
“Our report found that corporate return e-filing has benefited both taxpayers and the Internal Revenue Service,” said J. Russell George, the Treasury Inspector General for Tax Administration. “I am pleased to see that the e-file program is providing meaningful results,” George added.
The Inspector General also noted, however, that although IRS officials expected that e-filing would allow them to eliminate more compliant corporate taxpayers from the IRS’s audit stream, this key benefit has not materialized to date. In each of the fiscal years since mandatory e-filing was introduced for large corporations, a higher percentage (roughly one out of four) of corporate returns audited were closed with no adjustment when compared to any of the three fiscal years preceding the program’s introduction.
TIGTA made two recommendations in its report, with which the IRS agreed.
Read the report.
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