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Tax Administration: IRS' Low-Dollar Notices Sent to Individual Taxpayers

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Report Type Reports and Testimonies
Report Date April 14, 2000
Report No. GGD-00-84
Subject
Summary:

Of the more than 31 million computer-generated notices that the Internal Revenue Service (IRS) sent to taxpayers in 1999, about 1.5 million were for small amounts of money--amounts due of less than $5 or refunds of less than $1. The agency spends about $0.42 to prepare and mail out these low-dollar notices. The cost rises an additional $1.30 if IRS needs to process a payment received from a taxpayer because of the original notice, and by another $14.32 if it needs to respond to a taxpayer inquiry about the notice. IRS sends low-dollar notices to taxpayers because of statutory requirements, such as to correct a math error or issue a notice of deficiency, or in accordance with the IRS Internal Revenue Manual. These notices, which inform taxpayers of any changes to their account, are sent regardless of the dollar amounts involved. IRS is aware of the potential burden imposed on taxpayers in dealing with low-dollar notices and has formed an internal task team to study the issue and identify possible improvements.

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