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.
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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.