A new report criticizes the Internal Revenue Service for less than effective tax administration by under utilizing and under testing the Modernized e-file system. Electronic filing is no longer new to individual and business taxpayers. The IRS gradually, but cautiously, expanded the use of the e-file system since its 2004 implementation. In February of last year, the agency allowed 1040 forms to be filed online.
The tax agency hopes to have the complete e-file system in operation late next year. The new audit of the government agency hints that the IRS has not sufficiently tested the e-file system to make an absolute transition from the IRS’s old, so-called legacy e-filing system. The Modernized e-file is expected to process tax forms more quickly and allow filers to submit additional documents through PDF files.
Taxpayers are able to access and use the latest e-file system now, but the audit claims not many have. Fewer than 9 million tax returns were filed by individuals through the new system this year. That number represents only a quarter of the usual number of returns the IRS receives in tax season.
By comparison, auditors said the soon-to-be-replaced legacy system has handled well over 3 million returns in a day. The new system has, at most, chugged through about 330,000 in one day.
Another concern auditors have is how well the new electronic filing system will deal with individual tax forms. The IRS has only checked about 10 percent of last year’s returns to make sure the new system was processing accurately.
The IRS plans to eliminate the legacy system next October, before the beginning of the 2013 tax season.
Auditors say the tax agency should do everything it can to get taxpayers used to filing on the new, faster system before that happens.
Source: Nextgov, “IRS hasn’t properly tested new e-file system, audit finds,” Joseph Marks, Nov. 29, 2011
