TIGTA: Demise of TeleFile is costing taxpayers millions

The U.S. Treasury Inspector General for Tax Administration (TIGTA) has issued a new report indicating that the IRS's decision to end its call-in tax filing program, TeleFile, has increased the financial burden on taxpayers by as much as $23.6 million.

Results of a TIGTA study disclosed that in 2006, 541,000 taxpayers who formerly phoned in their tax return information spent $23.6 million on tax preparation software.

TIGTA also discovered that 966,000 taxpayers returned to filing paper tax returns when they could no longer use TeleFile.

The IRS ended the experimental TeleFile system after the 2005 tax filing season claiming the program was costly and participation was decreasing. TeleFile was a program that allowed taxpayers to call a toll-free number and use their telephone keypad to enter information for their tax return. Forms 1040EZ, 4868, and 941 could be filed using the TeleFile system.

Only taxpayers who received a TeleFile packet from the IRS were eligible to use the system.

"Once again, the IRS has made a taxpayer service decision based on questionable data," said Inspector General J. Russell George, in a statement. "At best, the IRS may have eliminated its short-term cost of the program. Meanwhile, it has placed a financial burden on many taxpayers and slowed the growth of its objective to encourage electronic filing."

Senators Max Baucus (D-MT) and Charles Grassley (R-IA) have indicated they are considering introducing legislation that would require the IRS to reinstate TeleFile or establish a similar call-in tax return system.

"The IRS did not have the best interest of taxpayers in mind when it chose to get rid of TeleFile," said Baucus. "Instead it chose to shift costs on to the American people and increase the burden to taxpayers."

You may like these other stories...

Truckers and other owners of heavy highway vehicles take note: Your next federal highway use tax return is due on September 2.The September 2 due date, which was pushed back two days because the normal August 31 deadline...
The head of the IRS has a message for taxpayers and tax preparers who have endured long wait times while on the phone with the tax agency: Call your member of Congress.During his keynote speech at the 69th Annual Meeting of...
Regulators struggle with conflicts in credit ratings and auditsThe Public Company Accounting Oversight Board (PCAOB), which was created by the Sarbanes-Oxley Act in 2002, released its third annual report on audits of...

Already a member? log in here.

Upcoming CPE Webinars

Aug 26
This webcast will include discussions of recently issued, commonly-applicable Accounting Standards Updates for non-public, non-governmental entities.
Aug 28
Excel spreadsheets are often akin to the American Wild West, where users can input anything they want into any worksheet cell. Excel's Data Validation feature allows you to restrict user inputs to selected choices, but there are many nuances to the feature that often trip users up.
Sep 9
In this session we'll discuss the types of technologies and their uses in a small accounting firm office.
Sep 11
This webcast will include discussions of commonly-applicable Clarified Auditing Standards for audits of non-public, non-governmental entities.