E-Filing Enables IRS to Issue Refunds Faster Despite Shutdown, Smaller Staff

By Charles S. Clark

April 16, 2014

The Internal Revenue Service, operating with fewer employees and a filing season postponed by last October’s government shutdown, managed to beat last year’s performance measure of the number of tax refunds issued, auditors reported on Wednesday.

The processing of 55,434,000 refunds worth more than $164 billion represents a 3.7 percent increase over the previous year’s figure at the same time in the season, according to an interim report (as of March 7) by the Treasury Inspector General for Tax Administration.

Also noteworthy was a key reason for the picked-up pace—greater use of home computers by taxpayers in filing their returns. Some 27.4 million taxpayers used their own device, up from 25.9 million last year, while the number of paper returns -- which require more of the tax agency’s time to process -- shrunk from 5.6 million to 4.9 million, or only 7.4 percent of the 67.1 million mostly electronic returns received by early March. (The filing season ended April 15.) The IRS reported earlier this month that, as of March 28, it had received 82 million returns through e-file, about 91 percent of returns filed this year, and about 9 percent, or 8.3 million, returns on paper.

Because of the 16-day shutdown last fall, TIGTA noted, IRS delayed the start of filing season from Jan. 21 to Jan. 31, 2014. But the agency continued to expand its filters designed to identify fraudulent returns. As of Feb. 28, it had identified 28,076 fraudulent tax returns involving identity theft as well as 57,316 tax returns with $385 million claimed in fraudulent refunds. It went on to prevent the issuance of $336 million, or 87.3 percent, of the fraudulent refunds identified, the IRS reported.

Because of trims to its budget and reduced personnel, the IRS had cut back its taxpayer telephone assistance, auditors noted. This season the agency planned to have assisted 5.6 million taxpayers through face-to-face contact at Taxpayer Assistance Centers -- one million fewer than were assisted last year. As of March 8, 2014, about 46.3 million taxpayers had contacted the IRS by calling toll-free Customer Account Services lines.

Increasingly, taxpayers are being steered toward the agency’s 24/7 self-help services offered via IRS.gov, and offerings on YouTube, Twitter, Tumblr and Facebook. “However, the IRS did not always ensure that the self-help tools were updated with the most current tax information before the start of the filing season,” TIGTA reported.

As of March 7, the IRS reported, the website had received 181.2 million visits, with 1.4 percent increase in the number of taxpayers obtaining their refund information online via the “Where’s My Refund?” option.

The agency’s IRS2Go mobile application has been downloaded or updated 5.5 million times since its launch in January 2011. And as of March 10, the agency reported, IRS YouTube videos have been viewed 583,000 new times, while its Twitter followers have risen by 7 percent over last year, and now number 81,605.

By Charles S. Clark

April 16, 2014