Pursuant to a congressional request, GAO reviewed the performance of the information systems that the Internal Revenue Service (IRS) uses to process tax returns for individual taxpayers, focusing on: (1) IRS' tax processing systems performance in the 2000 filing season as reported by IRS compared to the 1999 filing season; and (2) whether IRS had taken actions to address those problems affecting individual taxpayers.

GAO noted that: (1) according to IRS performance data and comments from IRS officials and representatives of large tax practitioners, IRS' tax processing systems performed slightly better in the 2000 filing season than in the 1999 filing season; (2) for example, as of mid-April 2000, IRS reported that it had experienced fewer work stoppages caused by critical system-related problems and had fewer such problems that remained unresolved for over 24 hours; (3) also, IRS reported that it processed paper returns faster than in the 1999 filing season; (4) while IRS' data indicate that tax processing systems performed slightly better than last filing season, IRS reported that as of May 2, 2000, it had experienced four minor system-related problems that affected relatively small numbers of individual taxpayers; (5) for example, IRS sent some refunds to the wrong individuals; and (6) according to IRS, it had: (a) corrected all the system-related problems; (b) already taken or was taking action to mitigate their effects on taxpayers; and (c) notified individuals affected by two of the four problems; and (7) for the other two problems that resulted in IRS sending funds to the wrong individual, GAO was concerned that IRS did not notify them.

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