TIGTA: IRS Is Seven Years Past Statutory Deadline for Providing Online Account Access to Taxpayers

The Treasury Inspector General for Tax Administration today released While Efforts Are Ongoing to Deploy a Secure Mechanism to Verify Taxpayer Identities, the Public Still Cannot Access Their Tax Account Information Via the Internet (2013-20-127):

The Internal Revenue Service Restructuring and Reform Act of 1998 (RRA 98) requires the IRS to allow taxpayers to access tax account information online. In addition, other Federal mandates ...provide guidance to the IRS for undertaking such an endeavor. In April 2006, the IRS initiated the My IRS Account (MIRSA) project to provide taxpayers with an online system to view, access, update, and manage their tax accounts. In December 2008, after 32 months of development and the expenditure of approximately $10 million, the MIRSA project was cancelled due to a lack of an effective enterprise-wide eAuthentication strategy. ...

The RRA 98 required the IRS to develop procedures to allow taxpayers filing returns electronically to review their account online by December 31, 2006. The IRS did not meet this requirement, and we determined that the IRS has not made adequate progress in allowing taxpayers to access tax accounts. Currently, taxpayers cannot review account information electronically. The IRS Oversight Board is aware that a disparity exists between what is required by Congress and the amount of Internet accessibility currently available to taxpayers. In April 2012, the Oversight Board requested that the Treasury Inspector General for Tax Administration audit the IRS’s progress to provide taxpayers with the ability to review tax account records and report any findings. The eTranscripts for Banks application does not meet the intent of the RRA 98 because it only allows taxpayers to request that their tax account and tax return transcripts be sent to their lending institution electronically versus a hardcopy request. It does not provide the ability to view, print, or perform any other functions.

We believe that IRS leadership did not prioritize the applications that meet the requirements of the RRA 98. Rather, the IRS devoted resources to the development and implementation of several applications that do not meet the intent of the RRA 98. These are the eTranscripts for Banks, Where’s My Refund?, and Where’s My Amended Return? applications. The eTranscripts for Banks application, which was deployed in August 2012, allows taxpayers to request that a tax transcript be sent to a lending institution electronically. The Where’s My Refund? application allows taxpayers to track the status of their refund. This application, originally deployed in 2002, was called the Internet Refund Fact of Filing application, and was redeployed with enhancements in January 2013. The Where’s My Amended Return? application allows taxpayers to track the status of an amended return and was deployed in March 2013. While the applications do not directly address the requirements of account review, the applications do provide ancillary benefits to taxpayers.

The IRS online Get Transcript application is expected to be the first application to meet the intent of the RRA 98. The Get Transcript application will allow taxpayers to access their tax account information via the Internet. Through discussions with Get Transcript application personnel, we were informed that the application is expected to be deployed in January 2014.

In its April 2013 report, the Government Accountability Office stated that while the IRS’s efforts have already benefited taxpayers and hold the promise of additional benefits in the future, the IRS does not have a long-term strategy for enhancing its website that explains how its ongoing and new efforts fit together. No overall cost estimate exists, and there are not enough details on goals, deliverables, future online services, and time frames to be able to assess progress.

Because the deadlines proposed in the RRA 98 were not met, taxpayers’ ability to electronically fulfill their tax responsibilities and review their tax account information using the Internet is diminished. In addition, there is an increased burden on IRS customer service representatives answering taxpayer’s calls and questions for transcript requests by not implementing an online application that is RRA 98 compliant.