The IRS has seen participation in its External Leads Program grow and it’s getting more leads about questionable tax refunds, but the agency sometimes takes too long to verify them, the Treasury Inspector General for Tax Administration has said.
It said the program has grown from 10 partner financial institutions returning $233 million in 2010 to 258 partner financial institutions and partner organizations returning more than $576 million in 2013.
The IRS is not always verifying leads timely, verification time frame goals differ significantly based on the lead type, and verification goals do not take into consideration the burden on legitimate taxpayers whose refund is being held until the verification is completed, according to TIGTA.
Further, it said leads are inconsistently tracked in multiple inventory systems, and the inventory systems do not provide key information such as how the lead was resolved.
The IRS agreed with recommendations to establish more consistent time frames to verify leads, communicate these verification time frames to external partners, develop a process to ensure that leads are verified timely, consolidate the current lead inventory tracking systems into a single tracking system, and ensure that key information is captured as to how each lead is resolved.
