Interim Results for 2013 Filing Season Released

In early-April, the U.S. Treasury Inspector General for Tax Administration (TIGTA) released its “Interim Results of the 2013 Filing Season” report.  It outlined how the IRS was impacted by delays due to tax code changes, as well as reviewed the agency’s performance through early March.

The IRS faced several time constraints this year.  Tax professionals and taxpayers everywhere were anxious to process returns, and the effects of the delay were felt by everyone when tax season did not start on time.  The major reason for the deferral was last minute changes to the tax code.  The IRS has a very small window of time in which to update tax forms, instructions, and publications before accepting returns each year, and even the smallest change can be significant.  Even though the IRS did start accepting most tax forms just eight days after they had originally planned, there were some taxpayers who had to wait until March 4 to have their returns processed.

Another source of contention for the IRS this season was lack of manpower.  Congress required the agency to implement mandatory budget cuts and on March 5, the IRS announced it would have to make significant cuts for the remainder of the Fiscal Year.  Customer service and response time took an immediate hit due to reduced staffing.

How did all this affect the numbers?   As of March 9, the IRS had received approximately 65 million returns, down from the nearly 75 million returns filed during the same time period the year before. Of the 65 million, more than 59 million (91 percent) were filed electronically – also a decrease from the prior year when 64 million returns had been e-filed.  Also, fewer refunds had been issued - 53 million totaling nearly $155 billion (an average of $2,894 per refund) this year and 59.2 million totaling more than $174 billion last year (an average of $2,944 per refund).

Other points of interest the report included were:

• The noncompliance with Earned Income Tax Credit due diligence requirements continued. The TIGTA identified 80,585 tax return preparers filed 616,622 tax returns claiming nearly $1.9 billion in EITC without attaching the required Form 8867.  This opened the door for the IRS to issue $306 million in penalties.
• Education credits also continued to be a source of error.  The TIGTA identified 18,061 tax returns were filed claiming education credits totaling $30 million for children at an age very unlikely to be enrolled in a four-year college degree program.
• The IRS had identified 220,821 fraudulent tax returns claiming $1.86 billion in tax refunds as of March 9.  This protected them from issuing $1.79 billion in fraudulent refunds.
• Fewer taxpayers seeking help at Taxpayer Assistance Centers could be served due to IRS reduced staffing. Only six million taxpayers, 11.8 percent fewer than in 2012, were assisted.
• A 21.1 percent increase in the number or visits to IRS.gov website was reported, as well as a 47.1 percent increase in the number of taxpayers obtaining their refund information via the “Where’s My Refund” option on the IRS.gov site.
  • Social media outlets proved popular this year. As of March 21, the IRS2GO mobile application had more than 1.9 million new downloads; there were more than 1.5 million new views of IRS YouTube videos; and, there was a 31 percent increase in Twitter followers.

The TIGTA did not offer any recommendations in this report.  However, they will produce a final report that reviews the entire filing season in September.

-Kenya Hoffart, Industry Writer

The U.S. Treasury Inspector General for Tax Administration was established to provide independent oversight of IRS activities.  It promotes the economy, efficiency, and effectiveness in the administration of the internal revenue laws.  It is committed to the prevention and detection of fraud, waste, and abuse within the IRS and related entities.