Treasury Inspector General for Tax Administration
April 16, 2012
TIGTA - 2012-14
Contact: David Barnes
WASHINGTON - The Internal Revenue Service (IRS) has resolved a problem that delayed refunds early this filing season and increased taxpayer visits to the "Where?s My Refund" site on IRS.gov. Meanwhile, more taxpayers are using home computers to file their tax returns this year, and they are encountering more difficulty getting help from customer service.
Those are among the findings of the Treasury Inspector General for Tax Administration?s (TIGTA) Interim Filing Season report, publicly released today.
The objective of TIGTA?s review was to provide selected information related to the IRS?s 2012 Filing Season results. It is an interim report and for information only; no recommendations were made.
TIGTA's report found that as of March 3, 2012, the IRS received more than 63 million tax returns: 57 million (90 percent) were e-filed and nearly 6.3 million (10 percent) were filed on paper. The report also found that the IRS had issued nearly 52.4 million tax refunds totaling approximately $157.6 billion, down 2 percent from this time last year. And while 33 million of those returns were prepared by practitioners, 23.7 million were prepared on taxpayers? home computers, which is a 12 percent increase over last year.
"The filing season is critical for the IRS since it is during this time that most individuals file their income tax returns and contact the IRS if they have questions about specific tax laws or filing procedures," said J. Russell George, Treasury Inspector General for Tax Administration. "Our report found that the IRS is catching and preventing more fraudulent refunds and screening more prisoner tax returns; however, programming problems associated with Modernized e-File delayed some refunds, which may have contributed to a doubling of visits to the „Where?s My Refund? feature at IRS.gov over the previous year."
E-filing: TIGTA found that taxpayers who e-filed their tax returns early in the 2012 Filing Season experienced delays in receiving their tax refunds. The IRS indicated that it had experienced problems with its filters established to identify fraud and with a programming problem associated with the Modernized e-File system which delayed the processing of approximately 7.8 million tax returns. IRS officials say that problem was fixed by February 18, 2012.
First-Time Homebuyer Credit: The IRS has improved its processing of First-Time Homebuyer Credit installment repayments; however, some were still not processed accurately.
Earned Income Tax Credit: Some paid tax return preparers are not complying with Earned Income Tax Credit due diligence requirements.
Fraudulent Refunds: The IRS is doing a better job of identifying and preventing tax fraud, as well; as of March 3, 2012, the IRS had identified 441,462 tax returns with $2.7 billion claimed in fraudulent refunds and prevented the issuance of $2.6 billion (97 percent) of those fraudulent refunds, representing a 29 percent increase in the number of tax returns identified as of the same period in 2011. The IRS also selected 134,509 tax returns filed by prisoners for fraud screening, representing a 112 percent increase compared to last filing season.
Customer Service. Due to budget constraints, the IRS expected to be able to serve fewer taxpayers at its walk-in offices, called Taxpayer Assistance Centers, and to answer fewer taxpayer telephone calls.
Taxpayer Assistance Centers: The IRS anticipated increased wait times and earlier cutoffs of assistance. Tax return preparation was only provided on a limited number of days per week and only on a first come, first served basis.
Toll-Free Telephone Assistance. The IRS also planned on providing only a 61 percent Level of Service on its toll-free lines. As of March 3, 2012, IRS assistors had answered 7.4 million calls and achieved a 66 percent Level of Service, compared to 70 percent in 2011.
Tax Preparation Assistance at Volunteer Program Sites. TIGTA also found problems with accuracy rates among volunteer preparers who prepare tax returns for some taxpayers at Volunteer Program sites. As of March 3, 2012, TIGTA auditors had nine tax returns prepared at the sites with a 44 percent accuracy rate. This is lower than the 60 percent accuracy rate TIGTA reported during the same time period for the 2011 Filing Season.
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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