Federal Tax Deposit System: IRS Can Improve the Federal Tax Deposit System
AFMD-93-40
Published: Apr 28, 1993. Publicly Released: Apr 28, 1993.
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Highlights
GAO reviewed the Internal Revenue Service's (IRS): (1) accounting and payment data collection procedures for the federal tax deposit (FTD) system; and (2) efforts, with the Financial Management Service (FMS), to modernize the FTD collection process.
Recommendations
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| Department of the Treasury | To further reduce taxpayer burden and improve IRS productivity, the Secretary of the Treasury should direct the Commissioner of Internal Revenue and the Commissioner, FMS, to monitor the revised FTD automation efforts and ensure that the work on the automated FTD system for the private sector maintains the proper focus on how to capture the necessary accounting data with the payment data. |
IRS and FMS jointly researched, piloted, and implemented the Electronic Federal Tax Payment System (EFTPS) which automates the FTD system. EFTPS became operational October 28, 1996, and received its first payment on November 7, 1996. Effective July 1, 1997, all taxpayers who pay at least $50,000 in payroll taxes are required to use EFTPS. As of August 25, 1997, EFTPS collected about $250 billion in receipts for fiscal year 1997. EFTPS automates the payment process and captures payment data, but it does not include accounting data. As a result, the action is not fully responsive. GAO made another recommendation in another report (AIMD-94-22, December 21, 1993), which enhanced and replaced this recommendation.
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Accounting errorsCash managementData collectionDeposit fundsFederal taxesFinancial institutionsPersonal income taxesTax administration systemsTax returnsTaxpayers