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IRS Reduces Costs, But Increases Taxpayer Burden

by Mike Godfrey, Tax-News.com, Washington

26 December 2011


According to a new report by the Treasury Inspector General for Tax Administration (TIGTA), the United States Internal Revenue Service (IRS) had saved some USD14.2m by reducing the mailing of 2010 tax return packages, but had also increased the burden on about 6m individual taxpayers who, subsequently, had to obtain tax forms.

TIGTA initiated an audit to assess the implementation of the IRS’s strategy to eliminate or reduce the mailing of tax products, beginning with the 2010 tax filing season. The review included the IRS’s efforts to monitor cost savings, and the impact on tax compliance and taxpayer burden.

The IRS estimated that, as of July 27, 2011, it had saved about USD8.25m. However, TIGTA determined that the IRS had overestimated its postage and printing savings by nearly USD2.1m, but did not include just over USD8m in savings realized by processing more tax returns electronically.

However, it was also pointed out that eliminating individual tax package mailings increased the burden for a number of taxpayers, including those who complained they could not locate the forms they needed or did not know which forms to use. It also caused about 6m taxpayers to spend an additional 1.5m hours to obtain tax forms.

“An important part of the IRS’s mission is to help all taxpayers meet their responsibilities, even while striving to reduce costs,” said J. Russell George, the TIGTA. “Additional taxpayer burdens must be carefully considered when developing strategies to reduce costs and implement efficiencies.”

TAGS: compliance | tax | tax compliance | Internal Revenue Service (IRS) | United States | individual income tax

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