Treasury Inspector General for Tax Administration
November 28, 2011
TIGTA - 2011-84
Contact: David Barnes
WASHINGTON – The Internal Revenue Service’s (IRS) Modernized e-file (MeF) system needs improvement so that more taxpayers will be able to electronically file their tax returns, according to two new reports released publicly today.
The MeF system is designed to replace the IRS’s current tax return filing technology with a single, Internet-based electronic filing platform by the 2013 Filing Season. The Treasury Inspector General for Tax Administration (TIGTA) reviewed whether the IRS corrected performance problems identified by TIGTA during the 2010 Filing Season and whether the system will timely and accurately process individual tax returns during the 2011 Filing Season.
Overall, TIGTA found that the processes the IRS used to validate and monitor MeF system processing did not ensure the accurate processing of individual tax returns, and that TIGTA could not validate that previously identified performance issues were resolved.
“Since a growing number of Americans are filing their returns electronically, there is no room for error in IRS computer systems,” said J. Russell George, Treasury Inspector General for Tax Administration. “The IRS must be relentless in its pursuit of excellence with regard to all aspects of the Modernized e-file system. Attention to system security, capacity, and performance accuracy are paramount.”
In its first report, “The Modernized e-File Release 6.2 Included Enhancements, but Improvements Are Needed for Tracking Performance Issues and Security Weaknesses,” TIGTA found that the IRS successfully planned for key performance enhancements and tested the system’s requirements prior to implementation during the 2011 Filing Season, but needed to improve its methods for tracking performance problems and security weaknesses. Specifically, the IRS could not provide documentation to show TIGTA that performance enhancements were implemented to address performance-related issues identified during the 2010 Filing Season. The IRS agreed with three of TIGTA’s four recommendations for improvement but disagreed with TIGTA’s assertion that security weaknesses were not immediately mitigated. Although the IRS stated it currently accounted for all security controls, TIGTA maintains that documentation for tracking security issues should be continuously monitored and updated as weaknesses are identified or as changes occur.
In its second report, “Low Participation and Tax Return Volumes Continue to Hinder the Transition of Individual Income Tax Returns to the Modernized e-File System,” TIGTA found that IRS processes were not effective in ensuring the accuracy of the returns processed by MeF during the 2011 Filing Season. TIGTA also found that reluctance by tax return transmitters and State tax agencies to e-file using MeF raises significant concerns regarding the IRS’s ability to replace fully the Legacy e-file system for the 2013 Filing Season. According to the report, some return transmitters lacked confidence in the performance of the MeF system.
Further, the IRS is not encouraging taxpayers to take advantage of the ability to use the MeF system to scan and upload supplemental documentation to their e-filed tax returns.
TIGTA recommended in its second report that the IRS:
Note: The difference between the date TIGTA issues an audit report to the Internal Revenue Service and the date TIGTA publicly releases the report is due to TIGTA's internal review process to ensure that public release is in compliance with Federal confidentiality laws.
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