IRS could save millions through e-filing

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Electronic filing of tax returns could save the Internal Revenue Service millions of dollars. The IRS currently spends $3.29 to process each paper tax return, while an electronic return costs a mere 19 cents.

In 2009, about two-thirds of tax returns were filed electronically. If the remaining paper returns had been e-filed, the IRS could have saved $148 million.

The 1998 IRS Reform Act established the goal of 80 percent of tax returns being filed electronically by 2007, which has since been extended until 2012. Starting this tax season, if a tax preparer files more than 10 individual income tax returns per year, it must be submitted electronically.

The Government Accountability Office found that the IRS may be missing opportunities to educate taxpayers about the benefits of e-filing. Aside from saving the IRS money, e-filing tends to be more accurate and allows for refunds to be processed quicker. If the IRS had more information available electronically, its compliance programs would improve and bring in additional enforcement revenue.

“Opportunities may exist to reduce costs by investigating potential for eliminating duplication, and to increase e-filing rates by educating taxpayers about the benefits of e-filing,” the GAO report said.

FAST FACT: Shifting staff from paper return processing to compliance programs could increase tax revenue collected by $175 million annually.

Following are other new watchdog reports released by the Government Accountability Office (GAO), various federal Offices of Inspector General (OIG), and other government entities.

MISC.

  • A Bureau of Land Management manager failed to disclose regular meetings with a Wyoming businessman, which included dinners and lunches over a 12-year period, during which the manager was considering a land exchange which would have benefited the company. The employee may have violated conflicts of interest laws, but the report did not reveal the final ruling. (DOI Inspector General)

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