IRS OVERSITE OF E-FILERS

More and more Americans will deal with their tax returns this year as "E-Filers"... on line... using software such as Tax Cut, TaxAct and TurboTax.

But the IRS is now concerned with it's inability to properly monitor those e-filings, especially in two areas: First, according to a Government Accounting Office press release, they're concerned with tax fraud. Second, they're concerned with on-line safety issues and the security provided by the software industry.

According to the GAO, the IRS sets out standards for software providers governing privacy of programs. But the providers are not required to meet them. "The IRS does not know whether the confidentiality and integrity of the taxpayers' data are at an increased risk of being inadequately protected against fraud and identity theft."

For last year’s filings, 39 million taxpayers (out of 141 million) used software to prepare their taxes, and 66% of those people then filed online. For the 2008 returns, those figures are expected to be higher. Without better monitoring, the IRS feels, it may be missing out on revenue.