IRS SEES LESS E-FILINGKennesaw, Ga. - In early February, the Internal Revenue Service reported a nearly 10 percent drop in electronic tax filing from tax professionals, despite a push by the agency to encourage more e-filing.

This year, the IRS introduced a Free Fillable Tax Forms service that allows taxpayers of any income level to fill out on-screen forms and e-file their tax returns.

Perhaps because electronic filing is becoming more widely available to home computer users, the latest figures from the IRS indicate that tax professionals were doing 9.64 percent less e-filing compared to last season, down from 13,007,026 in 2008 to 11,753,332 as of Feb. 2, 2009. Meanwhile, the number of e-filings from do-it-yourself software such as TurboTax and TaxCut increased 9.69 percent as of Feb. 2, to 6,429,534 from 5,861,505 in the same period in 2008.

However, one company that services small CPA firms saw a 149-percent increase in filings. CCH Small Firm Services claimed that it accounted for nearly one in five of the more than 11 million tax returns filed up to that point with the IRS by tax professionals.


Washington, D.C. - The Internal Revenue Service paid between $10 billion and $12 billion in tax year 2006 to taxpayers who erroneously claimed the Earned Income Tax Credit, despite IRS efforts to step up compliance.

A new report from the Treasury Inspector General for Tax Administration found that the IRS has improved its oversight and management, and developed some successful processes for catching the erroneous EITC claims, but that its compliance resources are limited, and that additional alternatives to traditional compliance methods have not been developed.


Washington, D.C. - The Internal Revenue Service's program for allowing "Son of Boss" tax shelter investors to settle their tax disputes often did not lead to greater taxpayer compliance, according to a new report.

The report by the Treasury Inspector General for Tax Administration on the voluntary filing and payment compliance in the three years following the settlement's announcement in 2004 showed that 27 percent, or 300, of the 1,103 taxpayers who participated in the Son of Boss settlement did not meet their tax return filing and payment obligations at some point in this period.

TIGTA compared the filing and payment compliance of participants in the Son of Boss settlement program to the compliance of taxpayers participating in the IRS's offer-in-compromise program. TIGTA found in 2004 that 96 percent of the 84 taxpayers evaluated in a statistical sample of 28,018 OICs were in compliance.

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