IRS Garners Savings—and Problems—from Going Paperless

Submitted by rkoreto on Wed, 12/21/2011 - 17:23

The treasury inspector general for tax administration (TIGTA) issued a report on Dec. 13 addressing how much money the IRS saved by not mailing forms and instructions to taxpayers, and what the implications are for those who are not online.

TIGTA estimated that the IRS saved $14.19 million by not mailing 2010 tax packages. Nevertheless, the report said, "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 6 million taxpayers to spend an additional 1.5 million hours to obtain tax forms."
 
The report said that the paperless switch was not without risks: the taxpayer burden could end up costing the IRS in other ways, as taxpayers might now spend more time calling the IRS or visiting a Taxpayer Assistance Center. Additionally, "taxpayers may either forget to file or decide not to file their tax returns if they do not receive a tax package in the mail."
 
Among TIGTA's recommendations was a strategy that "should include goals and measures for future savings as well as steps to monitor how the elimination of tax packages affects taxpayer burden and voluntary compliance. This includes analyzing taxpayer complaints and geographic coverage of form distribution in Taxpayer Assistance Centers and Tax Form Outlet Program partners."
 
New York State has already reaped paperless savings by not mailing 1099-G postcards, which indentify how much of a New York state tax refund a taxpayer received in the previous year. This information is available online.

 

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