IRS Misled Taxpayers in Surveys and Made up Cost Estimates for New Filing Initiative, Watchdog Report Finds

The IRS misled taxpayers in surveys and generated unsubstantiated cost and user estimates for a new direct online tax filing initiative, a new watchdog report concluded.

The U.S. Treasury Inspector General for Tax Administration (TIGTA) released a report on Oct. 2 assessing the IRS’s plan for a free e-filing system and the TIGTA concluded that the IRS misled taxpayers in surveys about the e-file system and failed to produce data to justify its cost and user estimates.

“The IRS obtained taxpayer opinions on a Direct File system. However, taxpayer interest in a Direct File tool may be overstated due to the design of the surveys conducted,” the report states. “In addition, the survey prompt may have led taxpayers to believe that the tool would have more options than it will immediately have available, such as the ability to file State tax returns.”

“Finally, the IRS could not provide TIGTA with any supporting documentation to support its cost estimates or how it determined there would be at least 5 million users. As a result, TIGTA had no way to identify the reasonableness of the IRS’s cost estimates,” the report adds. (Read more from “IRS Misled Taxpayers in Surveys and Made up Cost Estimates for New Filing Initiative, Watchdog Report Finds” HERE)

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