A record e-filing season

More taxpayers go online rather than lick stamps

A record number of taxpayers visited the Internal Revenue Service's Web site this tax season for tax help and to file their returns. E-filing likely outpaced the number of mailed paper forms for the first time, according to IRS figures.

“We take every opportunity we can to broadcast the benefits of electronic filing," IRS Commissioner Mark Everson said in testimony before a House Appropriations Committee subcommittee April 14. The filing season ended for most people April 15, the deadline for filing tax returns or seeking an extension.

Through April 8, the last date for which figures are available, 63 percent of the

88 million individual tax returns received this year were sent via the Internet, an 8 percent increase compared with the same period last year, tax officials said.

Electronic returns are less prone to customer error, said Susan Smoter, director of Internet development services at the IRS. Individual paper returns contain errors 21 percent of the time, whereas only 1 percent of e-filed tax returns are inaccurate, she said. "That's very easy to figure out -- front-end edits clean it up before it comes into the system."

Most of those errors are tax preparers' fault, but the hand-sorting of paper returns also leaves plenty of room for error, IRS officials said. "Even if you send something to us by registered mail and you get the signed receipt back, the only thing that guarantees is [that] we got the envelope," said George Coffin, the IRS' public portal branch chief. Coffin and Smoter spoke April 14 at a dinner sponsored by the National Capitol Chapter of the Association for Information and Image Management International.

During the afternoon of April 14, the IRS' Web site received more than 2,100 hits per second, well above during last year’s peak, Coffin said. The site, which began as a static bulletin board of downloadable tax forms, has become a dynamic content management system, he said.

IRS managers once tried to centrally manage all the Web site's content. But to handle the growing volume of material, they have decided instead to take a decentralized approach, using publishers and reviewers who adhere to IRS standards.

The tax agency's Web presence could still be improved, Coffin and Smoter said. Even the 1 percent error rate in e-filed tax returns is too much, Smoter said. IRS officials rely on a consortium of software companies to provide tax preparation software online as part of a service called Free File. "We only get the return data once it’s been processed, so somebody is slipping up there," she said.

Among other necessary improvements is the site’s search engine, Coffin said. The engine returns too many results, which frustrates customers who must wade through them, he said.

Future iterations of the IRS’ public Web portal might offer customized content views, but tax officials have no plans to keep track of who is visiting the Web site, Smoter said. "It would totally freak you out if you came to the IRS Web site and we knew who you were. We know that our customers do not want to have that close a relationship."

In the future, quick links to information and forms could be provided directly on the IRS' home page, Smoter said. That way, taxpayers would not have to click more than once to find a 1040 form.

GAO says taxpayers’ data is not secure

A recently released Government Accountability Office report found that taxpayer data stored on Internal Revenue Service mainframes is vulnerable to hacking. Based on an investigation conducted from August through December 2004, GAO auditors found that tax officials have corrected some security control weaknesses, but are still unable to guarantee the confidentiality and integrity of taxpayer data.

Among the weak spots they identified were:

  • User accounts and passwords were available to any authorized user on the system.
  • Access to accounts with operating system rights was not adequately restricted.
  • Known network vulnerabilities were not sufficiently addressed, possibly allowing unauthorized users to gain access.
  • Audit data was not always retained on servers.
  • An agencywide information security program has not been implemented.
  • Security standards are not always enforced.

    — David Perera

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