Filing of Forms 94x at 36.6%, Again Falling Short of IRS Goal

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By Michael Trimarchi

An estimated 36.6 percent of employment tax forms in the Form 94x series were electronically filed for 2016 as the Internal Revenue Service again failed to meet its goal of 80 percent of such forms being electronically filed, the Electronic Tax Administration Advisory Committee said June 28 in its 2017 annual report to Congress.

The Form 94x series includes Form 940, Employer's Annual Federal Unemployment (FUTA) Tax Return; Form 941, Employer's Quarterly Federal Tax Return; Form 943, Employer's Annual Federal Tax Return for Agricultural Employees; Form 944, Employer's Annual Federal Tax Return; and Form 945, Annual Return of Withheld Federal Income Tax.

While the estimated 2016 percentage of electronically filed forms was lower than the IRS goal, it also failed to meet the committee's projection in June 2016 that 37.2 percent of returns in the Form 94x series would be electronically filed for 2016. The committee projects an increase in the percentage of Forms 94x that are to be filed electronically for 2017, at 38.2 percent.

Emphasis on Electronic Security

For the first time, the report included recommendations by the ongoing security summit on improving electronic security in the tax system and fighting tax fraud related to identity theft.

From January to April 2016, the IRS stopped $1.1 billion in fraudulent refunds claimed by identity thieves on 171,000 tax returns, the report said. The 2016 amounts compared with $754 million in fraudulent refunds claimed on 141,000 returns for the same period in 2015.

The new Identity Theft Tax Refund Fraud Information Sharing and Analysis Center that was launched in 2017 was expected to achieve significant gains in detecting and preventing identity-theft tax refund fraud, the report said.

The report “builds on the significant, ongoing work by the IRS, the states and our private sector partners to protect the entire tax system,” IRS Commissioner John Koskinen said, adding that the agency would review the report and its recommendations.

To contact the reporter on this story: Michael Trimarchi in Washington at mtrimarchi@bna.com. To contact the editor responsible for this story: Michael Baer at mbaer@bna.com.

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