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Published: 2001

Total Pages: 18

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As of September 30, 2001, about 84 million taxpayers were to have received about $36 billion in advance tax refunds. IRS offset about $2.1 billion from these advance tax refunds to recover delinquent federal taxes. FMS offset another $469 million for delinquent child support payments, state taxes, and federal debts other than delinquent taxes. It cost IRS about $104 million to administer the advance tax refund program through September 30, 2001, which included IRS staffing costs as well as the costs associated with contracts, postage, and printing. FMS expects to incur about $34 million in costs to issue the checks. TIGTA identified two initial problems that affected either the accuracy or timeliness of the advance refund notices that IRS sent to taxpayers. One problem involved computer programming errors that resulted in 523,000 taxpayers receiving notices indicating that they would receive larger advance tax refunds than they were entitled to receive. %TIGTA brought the problem to IRS' attention, and IRS corrected it before any advance tax refunds were issued. %TIGTA also determined that 5.3 million taxpayers who had filed their tax returns by the April 16 filing deadline would have delays from 1 to 9 weeks in receiving their advance refund notices because of IRS' procedures for processing returns and the way programming was developed to generate the notices.