The Internal Revenue Service is not processing taxpayer checks quickly enough, causing the government to lose money on interest payments, according to a new report.
The report, by the Treasury Inspector General for Tax Administration, assessed the timeliness and accuracy of the IRSs system for electronically processing paper checks. The IRS accepts billions of dollars in payments every year from taxpayers paying estimated tax payments in advance of filing their tax returns, submitting payments with their tax returns, and paying past-due taxes, mostly with paper checks.
TIGTA found that the IRS is generally scanning the checks and accurately posting the payments to taxpayer accounts. However, only 13 percent of the 770,504 payments reviewed by TIGTA were deposited the next business day through the Treasury Departments Financial Management Service. As a result, the IRS lost $695,115 in interest on the payments that were not promptly processed.
In addition, the codes used by the IRS to track electronic payments do not identify which IRS locations are processing the payments.
The timely processing and crediting of payments to appropriate accounts benefits taxpayers as well as the IRS, said TIGTA Inspector General J. Russell George in a statement. When payments are not promptly processed, taxpayers lose the benefit of the interest earned that is credited to the Department of the Treasury.
TIGTA recommended that the IRS improve its coding to be able to track the locations where the batches of payments were processed and to develop a strategy to get checks deposited as quickly as possible. The IRS agreed with TIGTAs recommendations.
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
Already have an account? Log In
Don't have an account? Register for Free Unlimited Access