A report by the Treasury Department's inspector general raised concerns about the screening done by the Internal Revenue Service of electronic filing providers.

The report found that the IRS does not verify the citizenship of the providers or their authorization to work in the United States. Nor does the IRS generally perform credit history checks, and it does only a limited number of criminal background checks.

The report, from the Treasury Inspector General for Tax Administration, found that the IRS did have an effective process for ensuring the applicants meet age requirements and certain suitability checks, such as tax compliance. But the IRS did not have an independent verification process for applicants who claim they are a not-for-profit service.

TIGTA warned that the inadequate screening and monitoring increases the risk to both taxpayers and the federal government of potential losses from unscrupulous e-file providers. "Allowing this risk to continue jeopardizes the IRS's e-File program," said TIGTA Inspector General J. Russell George in a statement. In their response to the report, IRS management agreed with eight of TIGTA's nine recommendations and partially agreed with the one remaining recommendation.

Register or login for access to this item and much more

All Accounting Today content is archived after seven days.

Community members receive:
  • All recent and archived articles
  • Conference offers and updates
  • A full menu of enewsletter options
  • Web seminars, white papers, ebooks

Don't have an account? Register for Free Unlimited Access