IRS E-File Rejecting Tax Returns - InformationWeek
Government // Enterprise Architecture
01:34 PM

IRS E-File Rejecting Tax Returns

Business rules used by the Internal Revenue Service to evaluate tax returns are refusing valid individual filings.

A multimillion system the Internal Revenue Service is rolling out to make it easier for people to electronically file their taxes is erroneously rejecting valid tax returns, according to a report released last week.

Some of the business rules the Modernized e-File system uses to check the validity of returns are not working properly, according to the report released by the Treasury inspector general for tax administration.

The MeF is a $524 million system upgrade currently in process to replace the IRS e-file system. It has processed business returns for several years and, for the first time, this year is processing some but not all individual returns.

The IRS planned to accept 1.5 million individual tax returns via MeF through the end of February, with another 4.4 million returns to be processed through the system by the end of March.

The report audited the system's handling of tax returns until March 5, 2010. At that point, however, only 98,596 returns were processed through MeF, and of them 23,902 -- or 24% -- were rejected.

The system uses 434 business rules to either accept or reject claims based on certain criteria, and has so far rejected claims based on one or more of 158 of them, according to the report.

The report analyzed 30 of the 158 rules that were rejecting returns and found that 19 rejected valid returns. Those business rules handle several individual tax issues, including the making work pay credit, the earned income tax credit, and the validity of individuals' Social Security numbers.

According to the IRS, the MeF upgrade in process is not affecting the ability for American taxpayers to file their returns electronically, and the number of returns filed through eFile this year is up slightly, according to statistics on the IRS Web site.

So far more than 77 million people have successfully filed their tax returns through eFile. The deadline for filing income taxes in the United States was April 15.

The Treasury inspector general is working with IRS officials to monitor how the MeF system continues to handle individual returns to ensure the system is working properly before it is fully implemented, according to the report.

Comment  | 
Print  | 
More Insights
Newest First  |  Oldest First  |  Threaded View
How Enterprises Are Attacking the IT Security Enterprise
How Enterprises Are Attacking the IT Security Enterprise
To learn more about what organizations are doing to tackle attacks and threats we surveyed a group of 300 IT and infosec professionals to find out what their biggest IT security challenges are and what they're doing to defend against today's threats. Download the report to see what they're saying.
Register for InformationWeek Newsletters
White Papers
Current Issue
2017 State of IT Report
In today's technology-driven world, "innovation" has become a basic expectation. IT leaders are tasked with making technical magic, improving customer experience, and boosting the bottom line -- yet often without any increase to the IT budget. How are organizations striking the balance between new initiatives and cost control? Download our report to learn about the biggest challenges and how savvy IT executives are overcoming them.
Twitter Feed
Sponsored Live Streaming Video
Everything You've Been Told About Mobility Is Wrong
Attend this video symposium with Sean Wisdom, Global Director of Mobility Solutions, and learn about how you can harness powerful new products to mobilize your business potential.
Flash Poll