recommended reading

Some tax preparers continue to resist the IRS e-filing system

As the Internal Revenue Service pushes taxpayers to file more returns electronically, tax preparers continue to face challenges with the e-filing system, according to a new report from the Government Accountability Office.

The 1998 IRS Restructuring and Reform Act required that 80 percent of tax returns be filed electronically by 2007, but the IRS missed that target. The agency then began modernizing its legacy e-filing system in 2004 and the deadline was extended until 2012. This year, preparers who expect to file more than 100 individual, trust or estate returns must do so electronically; in 2012, the e-file mandate will apply to all paid preparers who file 11 or more returns.

Electronic filing is a critical component of modernizing the IRS, GAO said. The report, released Monday, was prepared at the request of Sens. Richard Durbin, D-Ill., and Jerry Moran, R-Kan., chairman and ranking member, respectively, of the Senate Subcommittee on Financial Services and General Government.

"IRS has made significant progress increasing e-filing rates," the report said. "But it still has a way to go until it reaches its 80 percent goal." In 2010, 71 percent of all tax returns were filed electronically, according to a January GAO report.

Although the IRS has taken several steps to implement the e-file mandate, including communicating the details and publishing the proposed regulations, professional preparers raised concerns regarding the timing, wrote auditor James R. White, director of tax issues at GAO.

Preparers were required by Jan. 1 to obtain preparer tax identification numbers, which allows the IRS to identify individuals responsible for filing returns, and ensure they are compliant with the law. Firms that employ the preparers are required to have a separate electronic filing identification number.

Tracking multiple ID numbers might raise administrative costs for the IRS. GAO recommended agency officials determine if it would be practical and cost-effective to use preparer's identification numbers as the authorizing number for e-filing.

Preparers can request hardship waivers for the e-file requirement by submitting Form 8944, but GAO recommended the IRS add a sentence to the form explaining the benefits of electronic filing.

In response to the report, IRS Deputy Commissioner for Services and Enforcement Steven T. Miller agreed with GAO's recommendations.

Threatwatch Alert

Thousands of cyber attacks occur each day

See the latest threats

JOIN THE DISCUSSION

Close [ x ] More from Nextgov
 
 

Thank you for subscribing to newsletters from Nextgov.com.
We think these reports might interest you:

  • It’s Time for the Federal Government to Embrace Wireless and Mobility

    The United States has turned a corner on the adoption of mobile phones, tablets and other smart devices, outpacing traditional desktop and laptop sales by a wide margin. This issue brief discusses the state of wireless and mobility in federal government and outlines why now is the time to embrace these technologies in government.

    Download
  • Featured Content from RSA Conference: Dissed by NIST

    Learn more about the latest draft of the U.S. National Institute of Standards and Technology guidance document on authentication and lifecycle management.

    Download
  • A New Security Architecture for Federal Networks

    Federal government networks are under constant attack, and the number of those attacks is increasing. This issue brief discusses today's threats and a new model for the future.

    Download
  • Going Agile:Revolutionizing Federal Digital Services Delivery

    Here’s one indication that times have changed: Harriet Tubman is going to be the next face of the twenty dollar bill. Another sign of change? The way in which the federal government arrived at that decision.

    Download
  • Software-Defined Networking

    So many demands are being placed on federal information technology networks, which must handle vast amounts of data, accommodate voice and video, and cope with a multitude of highly connected devices while keeping government information secure from cyber threats. This issue brief discusses the state of SDN in the federal government and the path forward.

    Download
  • The New IP: Moving Government Agencies Toward the Network of The Future

    Federal IT managers are looking to modernize legacy network infrastructures that are taxed by growing demands from mobile devices, video, vast amounts of data, and more. This issue brief discusses the federal government network landscape, as well as market, financial force drivers for network modernization.

    Download

When you download a report, your information may be shared with the underwriters of that document.