IRS to Boost Oversight of Security, Accuracy of E-Filings
|
TOOLBOX
   Resize
COMMENT
 Discussion Policy
 CLOSE
Comments that include profanity or personal attacks or other inappropriate comments or material will be removed from the site. Additionally, entries that are unsigned or contain "signatures" by someone other than the actual author will be removed. Finally, we will take steps to block users who violate any of our posting standards, terms of use or privacy policies or any other policies governing this site. Please review the full rules governing commentaries and discussions. You are fully responsible for the content that you post.
Who's Blogging  |
Saturday, April 11, 2009
With more and more Americans using software to figure their taxes and the Web to file their annual returns, the Internal Revenue Service has decided it's time to beef up its oversight of the security and accuracy of such filings.
The IRS is acting on a report by the Government Accountability Office that raised concerns about the lack of a clear system to monitor electronic tax filings prepared by software programs such as TurboTax, TaxCut or TaxAct.
"IRS provides some oversight of the tax software industry but does not fully monitor compliance with established security and privacy standards," the GAO said in the report, which it gave to the IRS in February.
While the IRS has standards for software providers governing privacy of programs, the providers are not required to meet them. The IRS needs better enforcement, the GAO said, because it only intervenes when there is a complaint.
"The IRS does not know whether the confidentiality and integrity of the taxpayers' data are at an increased risk of being inadequately protected against fraud and identity theft," the GAO said.
Of the 141 million taxpayers in 2007, 39 million used software programs to prepare their forms and 66 percent of those filed online. That number increases as fewer people go to paid tax preparers or prepare their taxes themselves.
Intuit, which makes TurboTax, the most popular tax preparation software among consumers, said its sales of desktop software and online applications rose 10 percent in 2008.
Without better monitoring, the IRS may be missing out on revenue, according to the GAO report. At the same time, the GAO said, the IRS should study how the price of electronic filing has affected how taxpayers choose to prepare and file their taxes. Without an overall assessment of electronic filing, the IRS isn't aware of any risks that may be associated with the growing trend, the report found.
"This report was not because we found problems," said James White, director of tax issues at the GAO. "What we want is for things to be more systemic so we can see that companies are complying, but we don't have evidence of problems, yet."
The IRS agreed with most of the GAO's recommendations. It said that while it has rules in place, the GAO wants a more "documentable" plan.
"We are working on it, and we will have a complete comprehensive picture for the next filing season," said David Williams, director of electronic tax administration at the IRS.
