Tax Administration: Increased Fraud and Poor Taxpayer Access to IRS Cloud
1993 Filing Season (Letter Report, 12/22/93, GAO/GGD-94-65).

In 1993, for the first time in several years, the number of tax returns
filed dropped; about 2 million fewer individual income tax returns were
filed that year than during 1992.  The Internal Revenue Service (IRS)
believes that a major reason for the decrease is the change in
withholding tables for tax year 1992, which caused fewer taxpayers to
receive refunds and more to owe taxes.  IRS identified about 54,000
fraudulent returns involving refund claims in 1993, about twice as many
as IRS identified in 1992.  Fraudulent electronic filing, which has been
on the upswing since the service was introduced nationwide in 1990, is a
particularly difficult problem for IRS because of the speed with which
refunds are processed.  Although IRS is bolstering its efforts to combat
electronic fraud, such as conducting computer checks to verify that
taxpayer names and social security numbers on returns match IRS records,
GAO believes that IRS could take further steps to identify and stop
fraudulent electronic refunds.  For example, IRS should analyze
information provided by banks on rejected refund anticipation
loans--loans that allow taxpayers to quickly get money while their
refunds are being processed.  IRS indicators show that, except for the
continuing fraud problem, the agency did a good job processing returns
during the 1993 filing season; most refunds were issued quickly and
accurately.  In addition, toll-free telephone assistors did a good job
answering tax law questions, and distribution centers did a good job
responding to taxpayers' requests for forms, instructions, and
publications.  Taxpayers, however, continued to have difficulty getting
through to telephone assistors.

--------------------------- Indexing Terms -----------------------------

 REPORTNUM:  GGD-94-65
     TITLE:  Tax Administration: Increased Fraud and Poor Taxpayer 
             Access to IRS Cloud 1993 Filing Season
      DATE:  12/22/93
   SUBJECT:  Tax returns
             Electronic forms
             Tax refunds
             Fraud
             Telecommunications operations
             Electronic funds transfer
             Tax administration systems
             Information processing operations
             Taxpayers
             Information dissemination operations
IDENTIFIER:  IRS TeleFile Program
             Earned Income Tax Credit
             IRS Telephone Assistance Program
             
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