Treasury Inspector General for Tax Administration
Office of Audit
REVIEW OF THE USE OF THE ELECTRONIC FILING IDENTIFICATION NUMBER
Issued on March 30, 2011
Highlights of Report Number: †2011-40-031 to the Internal Revenue Service Commissioner for the Wage and Investment Division.
IMPACT ON TAXPAYERS
More than 60 million individual tax returns were electronically filed in Fiscal Year 2010 by Electronic Return Originators.† The electronic filing (e-file) Program enables tax returns to be sent to the Internal Revenue Service (IRS) in an electronic format via an authorized IRS e‑file Provider.† An e‑file Provider is generally the first point of contact for most taxpayers filing a tax return through the IRSís e‑file Program. †Insufficient system validations put at risk the integrity of the e‑file Program.
WHY TIGTA DID THE AUDIT
The overall objective of this review was to determine whether controls over the e-file Program are sufficient to prevent unauthorized use of the EFIN.
WHAT TIGTA FOUND
System validations related to the unauthorized use of EFINs and compliance with various e-file Program requirements need strengthening.† From March 11, 2005, to October 21, 2010, there were 1,192 EFINs reported to the IRS as compromised.
WHAT TIGTA RECOMMENDED
TIGTA made several recommendations for improvement.†
In their response to the report, IRS management agreed with four of the six recommendations and disagreed with two.† TIGTA maintains that controls need strengthening to prevent the unauthorized use of the EFIN.
READ THE FULL REPORT
To view the report, including the scope, methodology, and full IRS response, go to: †
Email Address: ††TIGTACommunications@tigta.treas.gov
Phone Number:†† 202-622-6500
Web Site:†† http://www.tigta.gov