The Internal Revenue Service should make some changes in its software code to reduce delays in reissuing some undelivered refund checks, recommends a new report.

When the post office determines that a tax refund check is undeliverable because the address to which the check was sent is not the taxpayer's current or correct address, the check is returned to the Financial Management Service, said the report from the Treasury Inspector General for Tax Administration.

The IRS then corresponds with the taxpayer to try to obtain a current address, even in some cases when the IRS already has an updated address on record for the taxpayer. This process delays receipt of the refund by the taxpayer, and the IRS generally does not pay interest to the taxpayer for the time required to get the refund check reissued.

TIGTA estimated that over a five-year period, 73,795 taxpayers could be burdened by being asked to provide information the IRS already has and by having delivery of their refund checks delayed.  Over the same period of time, the IRS could incur additional expenses of $36,160 to mail the unnecessary notices.

TIGTA recommended that the IRS revise its computer programming to automatically reissue an undelivered refund check when an address change is reflected on a taxpayer's account between the date on which the check was originally issued and the date on which it is returned as undeliverable.  IRS management agreed with the recommendation. A programming change was submitted on June 27, 2008, with a requested operational date of Jan. 15, 2010.