A new report by the Government Accountability Office on last tax-filing season suggests the Internal Revenue Service beef up its enforcement efforts while it processes returns.

The GAO recommended two areas in which the IRS should expand its "math error authority," or MEA, to check for taxpayer errors while processing before interest is owed on unpaid taxes. One involves eligibility for the child and dependent care credit by taxpayers who are "married filing separately." Taxpayers in this filing status are not eligible for the credit, but the IRS still allows it to be claimed, issues refunds, and later audits the same taxpayers to try to recover the money.

The other area in which the GAO suggested the IRS could do more error checking is in verifying earned income tax credit claims by noncustodial parents. In 2006, $91 million worth of such claims were unverified. The IRS plans to look at one way to verify these claims further, the GAO noted. However, the IRS is not planning to study another option that would combine the federal data on noncustodial parents and other taxpayer characteristics to automatically determine eligibility.

The GAO pointed out two other areas where the IRS lacks legal authority, but has the technical ability to use automated error checking. With one such error, the IRS could prevent individuals from deducting contributions to individual retirement accounts above the allowable limit, noted the GAO. Another type of error check could stop individuals from violating the age requirements for such contributions.

The GAO also noted that the 2008 filing season was generally successful despite the challenges of processing economic stimulus payments. The IRS issued 116 million stimulus payments totaling $94 billion, but needed to reassign hundreds of staff members from collection cases to telephone assistance to answer calls about the stimulus payments. The IRS expects the costs and foregone revenue associated with issuing the stimulus payments to reach about $960 million, of which $655 million is revenue foregone due to the shift of collections staff to telephone service.