Treasury Inspector General for Tax Administration
December 20, 2011
TIGTA - 2011-88
Contact: David Barnes
WASHINGTON -- The IRS saved approximately $14.19 million by not mailing Tax Year 2010 tax packages; however, eliminating the mailings increased the burden for about 6 million taxpayers who had to obtain tax forms, according to a new report by the Treasury Inspector General for Tax Administration (TIGTA).
TIGTA initiated an audit to assess the implementation of the IRSís strategy to eliminate or reduce the mailing of tax products, beginning with the Tax Year 2010 Filing Season. The review included the IRSís efforts to monitor cost savings and the impact on tax compliance and taxpayer burden. This is a follow-up review to a prior TIGTA report.
The IRS estimated that as of July 27, 2011, it had saved about $8.25 million. However, TIGTA determined that the IRS overestimated its postage and printing savings by $2.08 million and did not include $8.02 million in savings realized by processing more tax returns electronically. In addition, the data the IRS used to identify taxpayers who would have received a Tax Year 2010 tax package and notify them they would not be receiving one were inaccurate.
Eliminating individual tax package mailings increased the burden for a number of taxpayers, including those who complained they could not locate the forms they needed or did not know which forms to use. It also caused about 6 million taxpayers to spend an additional 1.5 million hours to obtain tax forms.
ďAn important part of the IRSís mission is to help all taxpayers meet their responsibilities, even while striving to reduce costs,Ē said J. Russell George, the Treasury Inspector General for Tax Administration. ďAdditional taxpayer burden must be carefully considered when developing strategies to reduce costs and implement efficiencies.Ē
TIGTA recommended that the IRS develop a process to ensure savings and cost data related to the future elimination or reduction of mailing tax products are current and reliable. In addition, a formal strategy should be developed and documented to ensure that publishing and postage costs are continually evaluated and cost and savings calculations are documented and validated.
In its response to the report, the IRS stated that it agreed with the recommendations and developed a process to ensure that information leading to the elimination and reduction in the mailing of the remaining two tax packages is complete, current, and reliable. In addition, it developed strategies to ensure it continually evaluates costs, implements efficiencies, and evaluates taxpayer burden.
Read the report.
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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