Treasury Inspector General for Tax Administration
November 27, 2013
TIGTA - 2013-51
Contact: David Barnes
WASHINGTON -- While increasing numbers of taxpayers are using the Internet to arrange payment agreements with the Internal Revenue Service (IRS), the Online Payment Agreement (OPA) program has met only 10 percent of its goal of increasing the number of online payment agreements. As a result, the IRS is not meeting its planned goals for increasing revenue or reducing taxpayer burden and costs.
So concludes a new report publicly released today by the Treasury Inspector General for Tax Administration (TIGTA).
The IRS implemented the OPA web application in 2006 to provide individual taxpayers or their authorized tax representatives a simple and convenient way to establish payment agreements while eliminating the need for paper forms, toll-free calls, and personal interaction with the IRS.
TIGTA initiated its audit to determine the effectiveness of the OPA program in achieving its goals of reducing taxpayer burden and increasing revenue through a shift from paper to online payment agreements. TIGTA analyzed the IRS’s efforts to achieve its goals as projected in the Baseline Business Case used to obtain approval of the program but did not validate the IRS’s projections.
“The Online Payment Agreement program is providing benefits both to taxpayers and the Internal Revenue Service,” said J. Russell George, Treasury Inspector General for Tax Administration. “However, more needs to be done to promote taxpayer use of the program to achieve the full extent of the intended benefits. Given the current economic environment and focus on efficient Federal Government operations, the program’s increased revenue and reduced costs become even more important.”
Taxpayer use of the OPA program increased from 18,291 taxpayers in Fiscal Year 2007 to 95,979 in Fiscal Year 2012 (a 425 percent increase). In addition, the default rate (missed payment) of streamlined installment agreements processed through the OPA program is 44 percent lower than the overall default rate, which means that more taxpayers continued to make their regular payments, leading to increased revenue with the OPA program.
Despite increasing usage, the OPA program is not meeting the IRS’s expectations, TIGTA found. The IRS projected that the OPA program would process 3.2 million streamlined installment agreements for Fiscal Years 2007 through 2012. However, only 308,246 taxpayers (10 percent of the goal) used the OPA program to establish their installment agreements during this period.
TIGTA recommended that the IRS begin measuring OPA performance results against program goals, improve promotion efforts, and evaluate the OPA and installment agreement program to identify barriers and the reasons taxpayers used the methods they did to establish their payment agreements.
IRS officials agreed with the recommendations and stated that they began taking steps to implement them.
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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