The Treasury Inspector General for Tax Administrator (TIGTA) has come up with its annual report on the performance of the IRS during the year’s tax season. For the tax year 2013, TIGTA has a favorable report for the IRS. In spite of the delay in the opening of the tax season, the IRS is found to have processed returns and issued funds on time.

J. Russell George, the Treasury Inspector General for Tax Administration, said, “despite the delays, the IRS timely processed the majority of tax returns, and tax refunds were issued within 45 days of the April 15 tax return due date.” Tax News shares the figures: “The TIGTA found that, as of May 4, 2013, the IRS received approximately 133.6m tax returns, down from the 134.6m returns filed during the same period in 2012. More than 113.5m (nearly 85 per cent) of the returns were filed electronically, up from nearly 111.8m e-filed in 2012.

“The TIGTA also found that the IRS issued more than 99.5m refunds totalling more than USD264bn, compared to nearly 101.2m refunds totalling more than USD274bn in 2012. The average refund decreased slightly to USD 2,656 in 2013, compared with USD2,708 during the same period last year.”

With many of its operations now automated, the IRS has been trying to avoid delays in the processing of refunds caused by the lack of staff during the tax season. Electronic filing of taxes has helped the IRS to process returns more quickly. Taxpayers, if they file electronically, can check the status of their refund and know the approximate date on which they might receive a refund.

The TIGTA has also reviewed the number of fraudulent tax returns discovered by the IRS. Tax News follows with the details: “The IRS reported that it identified just over 579,000 tax returns with USD3.6bn claimed in fraudulent refunds during tax return processing and prevented the issuance of USD3.47bn (96.4 per cent) of those refunds.”

“However, the TIGTA’s report also raised concerns about the potential misuse of the split refund option to direct multiple tax refunds to the same bank account. The TIGTA notified the IRS in February that it appeared some tax refunds were being incorrectly directed to tax preparers’ accounts.

“The TIGTA had identified 385,500 tax returns with direct deposits totalling more than USD150.8m made to almost 47,000 bank accounts that had three or more deposits from different taxpayers into these accounts. The TIGTA determined that 248,000 (64 per cent) of these tax returns were prepared by a paid tax preparer.”

The TIGTA also noted that over 122,100 taxpayers inaccurately filed for the Earned Income Tax Credit (EITC) by filing for the credit without attaching the checklist form to their tax returns. The IRS is expected to charge a total of USD 354 million in penalties for the inaccurate filing of more than 700,000 tax returns.