2017 Filing Season: New Wage Verification Process Holds Promise but IRS Faced Implementation Challenges
Published: 2017-04-26T00:00:00

Fast Facts:
The IRS has faced the ongoing problem of identity theft refund fraud and improper payments. For the 2017 tax filing season, IRS implemented W-2 systemic verification—which compares W-2 wage data to taxpayers' returns before paying refunds. This could help identify discrepancies and fraudulent refunds.
In this testimony, we reported that these W-2 data helped identify $863 million in refunds as potentially fraudulent. However, wage data were not available in time for all tax returns due to older computer systems and paper W-2s (which had to be manually processed).

Highlights:
section_title: Why GAO Did This Study
paragraphs: IRS processes over 100 million tax returns during the filing season. In the past several years, IRS has been confronted with the ongoing problem of identity theft refund fraud and improper payments. Wage information that employers report on Form W-2 had not been available to IRS until after it issued most refunds. As GAO previously reported, earlier access to W-2 wage data—as now provided in recent legislation—could allow IRS to more timely match this information to taxpayers' returns and identify discrepancies before issuing billions of dollars of fraudulent refunds.
GAO was asked to review the 2017 filing season to-date (January through late March to mid-April). This testimony describes IRS's (1) implementation of W-2 systemic verification, and (2) performance in providing telephone and other customer service and processing individual income tax returns during the 2017 filing season.
GAO reviewed IRS systemic verification data and documents and interviewed IRS officials. To evaluate IRS's performance during the 2017 filing season, GAO compared data and documents to IRS's prior years' performance and interviewed IRS officials.
section_title: What GAO Found
paragraphs: To help combat identify theft refund fraud and improper payments, in 2017 the Internal Revenue Service (IRS) implemented provisions of the Protecting Americans from Tax Hikes Act of 2015 (the Act). Consistent with GAO's prior reporting, the Act advanced the deadline for employers filing Form W-2, Wage and Tax Statement (W-2) with the Social Security Administration to January 31, allowing IRS to verify information reported on tax returns (such as wages and withholding) before issuing refunds, a process IRS calls W-2 systemic verification. As of February 17, 2017, IRS received over 214 million W-2 forms (a 125 percent increase over the same time last year). The Act also required IRS to hold refunds until February 15 for taxpayers claiming the Earned Income Tax Credit (EITC) and Additional Child Tax Credit (ACTC) to provide time to use W-2 data to verify returns. Although IRS applied the verification process to all returns, preliminary data suggest the following:
For returns where the taxpayer claimed the EITC or ACTC, IRS verified the wage information for over 35 percent of these returns before February 15. Moreover, the refund hold allowed IRS time to verify returns when it received more W-2 data, resulting in approximately $863 million in additional refunds being identified as potentially fraudulent. However, since not all W-2 data were available before February 15, IRS was unable to verify wage information for over 58 percent (7.7 million) of tax returns with refunds claiming the EITC or ACTC for a total of $38.1 billion.
IRS did not hold returns that did not claim the EITC or ACTC because it was not required to do so, although those returns were subject to systemic verification and other checks. Preliminary data show that IRS verified wages reported on 8.6 million (41 percent) returns that did not claim the EITC or ACTC before February 15. However, IRS was unable to verify wage information reported on over 58 percent (12.3 million) of tax returns claiming $28.1 billion in refunds, because not all W-2 data were available.
Several issues contributed to delays in availability of W-2 information. IRS processes W-2 electronic data weekly rather than when received due to the age of its computer system, resulting in a lag between when IRS has the data and can use it. In addition, some employers can request and be granted 30-day filing extensions and some file paper W-2s, which take longer to process. IRS continues to analyze the W-2 systemic verification process and its outcomes.
IRS's telephone wait times and level of service—those seeking live assistance and receiving it—improved in the 2017 filing season compared to prior years. Average wait time decreased from 9.7 to 6.8 minutes compared to last year, and telephone level of service was more than 77 percent compared to 74 percent. Further, IRS reduced the number of written correspondence that is late, or “overage,” compared to prior years. IRS also experienced minor disruptions during return processing with two brief electronic filing system interruptions. Finally, IRS launched a new online service, but others were unavailable or discontinued due to security concerns.
section_title: What GAO Recommends
paragraphs: GAO is not making new recommendations but provides a status update on previously recommended actions that IRS could take to further improve service and operations.

section_title: Letter
paragraphs: Thank you for the opportunity to discuss how the Internal Revenue  Service (IRS) is using wage information earlier in the filing season to help  prevent improper payments and identity theft (IDT) refund fraud and how  it is providing customer service.
This filing season is notable for legislative changes that affected certain  taxpayers. As we have reported, IRS has been confronted with the  ongoing problems of improper payments and IDT refund fraud over the  past several years. IDT refund fraud occurs when a fraudster obtains an  individual’s Social Security number, date of birth, or other personally  identifiable information, and uses it to file a fraudulent tax return seeking a  refund. IRS estimates that at least $14.59 billion in IDT tax refund fraud  was attempted in calendar year 2015—of which it prevented at least  $12.35 billion (85 percent)—but at least $2.24 billion (15 percent) was  paid.
We previously reported that the wage information that employers report  on Form W-2, Wage and Tax Statement (W-2), had not been available to  IRS until after it issued most refunds. With earlier access to W-2 data,  IRS could use this information to verify taxpayers’ returns and identify  discrepancies before issuing billions of dollars in fraudulent refunds. Such  verification could also provide benefits for other IRS enforcement  programs such as preventing some Earned Income Tax Credit (EITC)  improper payments. Consistent with our prior reporting, in an effort to  address these issues, in 2015, Congress enacted the Protecting  Americans from Tax Hikes Act (the Act), which included provisions that  took effect this year. The Act required employers to submit W-2s to the  Social Security Administration (SSA) by January 31, which is about 1 to 2  months earlier than in prior years. SSA then provides W-2 data to IRS for  verifying employee wage and withholding data on tax returns. The Act  also required IRS to hold refunds for all taxpayers claiming the EITC or  Additional Child Tax Credit (ACTC) until February 15. Now that IRS has  earlier access to W-2 information, IRS is using it in a process it calls W-2  systemic verification.
My statement today describes IRS’s (1) implementation of early W-2  verification in accordance with the Protecting Americans from Tax Hikes  Act and SSA’s role in providing W-2 information to IRS, and (2)  performance in providing telephone and other service and processing  individual income tax returns during the 2017 filing season compared to  its performance in prior years.
My statement is based on our review of data and documents describing  the implementation of IRS’s systemic verification of W-2 data and  summarizing IRS’s performance on the 2017 filing season to date. To  understand IRS’s process for performing systemic verification of W-2 data  against individual income tax returns affected by the Act (those claiming  the EITC or ACTC), as well as other returns not affected by the Act (those  not claiming the EITC or ACTC), we reviewed the Act and related tax  laws, regulations and IRS data and documentation and interviewed IRS  officials. Additionally, to understand SSA’s role in providing W-2  information to IRS, we reviewed SSA data and information.
To describe trends in IRS’s performance providing customer service and  processing tax returns, we reviewed IRS filing season performance data  covering January through late March to mid-April for 2012 through 2017.  We also interviewed IRS officials on the benefits and challenges in  implementing W-2 systemic verification as well as planned improvements,  selected filing season operations, and data reliability. To further assess  the reliability of the data we used for this statement, we reviewed IRS  data and documentation, assessed documentation for data limitations,  and compared those results to our data reliability standards. We  determined that the data presented in this statement are sufficiently  reliable for our purposes. We provided a draft of this statement to IRS and  SSA for technical review and addressed their views and technical  comments as appropriate.
We conducted this performance audit from January to April 2017 in  accordance with generally accepted government auditing standards.  Those standards require that we plan and perform the audit to obtain  sufficient, appropriate evidence to provide a reasonable basis for our  findings and conclusions based on our audit objectives. We believe that  the evidence obtained provides a reasonable basis for our findings and  conclusions based on our audit objectives.
subsections: section_title: IRS Performed Early W-2 Verification, but Faced Implementation Challenges
subsections: section_title: IRS Verified Wages and Withholding for Some Returns but Did Not Receive All W-2 Data before Releasing Refunds
paragraphs: Before the Protecting Americans from Tax Hikes Act was enacted, IRS  did not receive the majority of W-2 data until after most refunds had been  issued. As we reported in 2014, IDT refund fraud took advantage of IRS’s  “look-back” compliance model. Under this model, rather than holding  refunds until completing all compliance checks, IRS issued refunds after  conducting selected reviews. Since IRS did not receive most employer- reported W-2 data until late in the filing season, IRS did not begin  matching that data to tax returns until July, following the tax season.  However, with the Act’s new reporting deadline, as of February 17, 2017,  IRS received over 214 million W-2 forms from SSA, an increase of 125  percent from the same time last year (see fig. 1).
For the 2017 filing season, IRS used the W-2 data it had available to  verify wages and withholding reported on all tax returns during initial  processing. Under the new legal requirements of section 6402(m) of the  tax code, IRS held refunds for returns claiming the EITC or ACTC  (EITC/ACTC returns) until February 15 regardless of whether IRS had the W-2 data available to verify wage information and had determined the  corresponding refund was valid (see fig. 2). IRS, in consultation with the  Department of the Treasury (Treasury), elected not to hold any refunds  for returns without EITC or ACTC (non-EITC/ACTC) because it was not  required to do so, as discussed later in this testimony. However, all  returns—with EITC or ACTC and without EITC or ACTC—are subject to  IRS’s verification process as well as other fraud filters.
While IRS conducts quality and enforcement checks throughout return  processing, preliminary data suggest that by using its W-2 systemic  verification, including allowing time to input the data for matching, are  important steps in IRS’s ability to determine whether the refund amount  claimed and taxpayer are legitimate for returns with EITC/ACTC as well  as for returns without those credits. Specifically, we found that:
For returns where the taxpayer claimed the EITC or ACTC,  preliminary data show that IRS verified the wage information for over  35 percent of these returns before February 15. Moreover, the refund  hold allowed IRS time to check returns using its systemic verification  when it received more W-2 data. For example, IRS reported it  reprocessed about 1 million returns during the hold period as more  data became available. As a result, IRS said it identified  approximately 162,000 returns claiming about $863 million in refunds  as potentially fraudulent. According to IRS, those refunds were not  allowed to be released on February 15, and the returns were directed  for follow up. However, IRS was unable to verify wage information for  over 58 percent (7.7 million) of tax returns with refunds claiming the  EITC or ACTC—for a total of $38.1 billion—before February 15. This  was in part due to the timing of when W-2 information was available,  as discussed later in this statement.
IRS did not hold returns that did not claim the EITC or ACTC unless  the return was selected by its other filters (such as for potential IDT  refund fraud). On such returns, while IRS also used available W-2  information, it did not hold refunds solely because W-2 information  was not available. Preliminary data show that using systemic  verification, IRS verified wages of 8.6 million (41 percent) of returns  that did not claim the EITC or ACTC before February 15. However,  IRS was unable to verify wage information reported on over 58  percent (12.3 million) of these tax returns for a total of $28.1 billion, as  not all W-2 data were available and IRS was not required to hold  these returns.
section_title: IRS Faced Challenges with the W-2 Systemic Verification Process
paragraphs: IRS faced challenges related to the availability and timing of the W-2s  while implementing its W-2 systemic verification process.
As noted previously, IRS was unable to verify wage income for the  majority of both EITC/ACTC and non-EITC/ACTC returns received by  February 14, because it did not have W-2 information available for those  taxpayers. There were three reasons for this delay:  1.  IRS received electronic W-2 data from SSA daily, but because IRS is  using older technology in this instance (a legacy system), it could only  load the data weekly. For EITC/ACTC returns, the law provided an  approximate 2-week delay between the W-2 due date (January 31)  and the refund release date (February 15), to allow time for IRS to  load the data and verify wage information on the returns before  releasing the refunds.  2.  Some W-2 data were delayed past February 15 because employers  requested extensions or missed the new deadline. This year, IRS  allowed employers a one-time 30-day, non-automatic extension to file  W-2 data if the deadline would cause undue hardship that would also  prevent the employer from furnishing the W-2s to employees by  January 31 (such as if a flood damaged the documentation and  equipment needed to file). This is a change from prior years in which  employers could request one 30-day extension from either the due  date on the last day of February (if filing on paper) or last day of  March (if filing electronically).  3.  While SSA begins receiving W-2 forms on paper in December, it did  not begin to transmit these data to IRS until March 2017. SSA officials  reported that they cannot report the number of employers who filed  paper W-2s until they complete transcribing those forms for tax year  2016. As of February 15, SSA estimated that it had approximately  17.4 million paper W-2s. As of March 31, 2017, SSA had processed  and transmitted to IRS about 3.8 million of these. Consequently, IRS  processed refunds without W-2 information for those taxpayers whose  employers had submitted paper W-2s.
section_title: IRS Continues to Analyze Results of Systemic Verification
paragraphs: As of March 29, IRS officials were still assessing the W-2 systemic  verification process and its outcomes. IRS does not yet know the full  effect of its W-2 systemic verification process on the number of IDT  fraudulent refunds it was able to prevent paying. However, as noted  earlier, IRS officials reported that the initial review of the W-2 verification  process for EITC/ACTC returns showed that IRS identified approximately  162,000 returns worth about $863 million as potentially fraudulent that it  would not have identified without the early W-2 data coupled with the  refund hold. IRS’s fraud filters did not select these returns for further  review; however, the W-2 systemic verification process did because IRS  received the W-2 data before it would have released the refunds on  February 15.
IRS officials also reported a decrease in the number of IDT cases this  filing season compared to last year. Through February 28, 2017, the  number of new cases decreased by 51 percent compared to the same  time last year (from 63,102 to 30,850). However, it is difficult to determine  whether this decline is due to IRS’s efforts, fewer attempts by fraudsters,  or other factors. IRS is continuing to review its verification process before  determining what steps it needs to take, if any, to improve its fraud  selection filters.
IRS officials stated that they are confident that IRS did not systematically  release EITC/ACTC refunds covered by the new hold requirement  prematurely. IRS said its pre-filing season testing confirmed that the  holds would work as intended, and that it conducted individual reviews of  EITC/ACTC cases in which data indicated that a refund may have been  released early. IRS identified nine such cases, but the payouts occurred  after February 15. IRS is considering a number of scenarios that may  require legislative action, including adjusting the timing of holding refunds  it has not yet verified, and releasing refunds for wages it has verified.
One concern that officials noted about the refund hold was the potential  effect on the economy. According to IRS officials, in consultation with  Treasury, IRS opted not to hold all refunds until February 15. Although  IRS has authority to hold these refunds, officials explained that doing so  would have too great of an effect on the economy on top of the refunds  they were required to hold by law. For example, there could be impacts  to business models of large retailers that rely on the cycle of federal  income tax refund distribution, especially in communities with lower- income taxpayers, according to IRS officials. Even a short delay in a one- time cash infusion, especially if it represents a significant portion of some  taxpayers’ income, can cause them to delay paying bills or making  important spending decisions. In addition, IRS officials said that the surge  in refunds released February 15 could have had a significant impact on  check-cashing businesses and retailers and the amount of cash required  on hand to pay refunds to taxpayers. For EITC/ACTC returns, IRS  estimated the effect on the economy to be about $60 to $64 billion in total  refunds that IRS would not release to taxpayers until February 15. If IRS  also held non-EITC/ACTC returns, it estimated those refund amounts  would affect the economy by an additional $40 billion.
section_title: IRS Improved Telephone Customer Service, Experienced Few Disruptions Processing Returns, and Added an Online Application While Suspending or Discontinuing Others
subsections: section_title: Telephone Service Improved in the 2017 Filing Season
paragraphs: While implementing tax law changes, it is important that IRS ensures  timely and quality service. During the filing season, IRS enforces tax laws,  provides service to tens of millions of taxpayers, and processes over 100  million tax returns. In recent years, IRS has experienced declining  resources and an increased workload. We have reported that IRS’s  budget declined by about $900 million between fiscal years 2011 and  2016. Furthermore, full-time equivalents (FTE) funded with annual  appropriations declined by 12,000 (13 percent) between fiscal years 2011  and 2016. The President’s fiscal year 2018 “Budget Blueprint” released  in March 2017 proposes funding IRS below the fiscal year 2000 level,  after adjusting for inflation (see fig. 3).
The decline in IRS’s budget has contributed to fluctuations in service and  longer telephone wait times. For example, in December 2015, we  reported that IRS provided the lowest level of telephone service—the  percentage of people who wanted to speak with an IRS assistor and were  able to reach one—during fiscal year 2015 compared to prior years.
Callers experienced long wait times and difficulty in reaching an IRS  assistor. IRS received additional funding for the 2016 filing season and  service improved considerably. For instance, the 2016 level of service  was the highest since 2011. Maintaining quality customer service is  important because it helps taxpayers comply with the tax code.
We found that IRS’s telephone service continued to improve in the 2017  filing season. As shown in figure 4, from January 1 through March 25,  2017, IRS’s telephone level of service increased by almost 4 percentage  points from the same time last year. In addition, the average wait time to  speak to an assistor decreased from 9.7 to 6.8 minutes. IRS officials  attributed the improvements to decreased telephone volume and its ability  to hire more assistors before the filing season started and prior to the  executive branch hiring freeze.
As of March 25, 2017, IRS had received about 30.7 million calls to its  automated and live assistor-answered telephone lines, an almost 32  percent decrease from the same time in 2016 (see fig. 5). Accordingly,  IRS assistors answered 6.9 million calls, approximately a 30 percent  decrease from the 9.9 million calls answered during the same time last  year. IRS officials told us they are still evaluating the reasons for the  decrease in call demand.
During the 2017 tax filing season, IRS experienced a disruption in  telephone service on one of its busiest days due to equipment issues.  During an 11-hour period on February 21, the day after the President’s  Day holiday, which is the single busiest day of the year to call IRS, IRS’s  telephone equipment malfunctioned, resulting in about 775,000 calls that  could not be completed or were disconnected. IRS officials explained that  a workaround solution to manage a known bug in the telephone  equipment failed to work. IRS officials told us that they are working with  the telephone vendor to resolve the issue. In the meantime, IRS officials  stated that they are monitoring telephone call volume manually to avoid a  repeated failure. Officials explained that this bug will be fixed when IRS  can upgrade its telephone equipment, which they expect to do by the end  of calendar year 2017.
IRS officials noted that the lower call volume IRS has experienced this  filing season has allowed assistors to work through more written  correspondence inventory than in prior years rather than letting it build up  while answering calls. As a result, through March 25, 2017, the overage  rate of correspondence—the percentage of cases generally not  processed within 45 days of receipt by IRS—had decreased to 31 percent  compared to 46.3 percent at the same time last year.
section_title: IRS Experienced Few Processing Disruptions during the 2017 Filing Season
paragraphs: According to IRS officials, return processing during the 2017 filing season  has proceeded as expected with a few minor challenges. As of April14,  2017, IRS had processed 115 million individual tax returns and issued  87.5 million refunds totaling $246 billion.
IRS’s electronic filing system experienced two periods of interruptions, but  they were short in duration with one lasting about a day and the other  including intermittent outages over the course of about a week. In  addition, some return processing was delayed as a result of the hiring  freeze. IRS officials stated that the hiring restriction did not significantly  disrupt processing tax returns and refunds, in part because the number of  returns filed in the beginning of the filing season was lower compared to  last year. IRS officials stated that they authorized use of overtime to help  facilitate processing and meet performance deadlines. Between October  1, 2016 through April 1, 2017, IRS used 23 FTEs of overtime and  estimates that it will use about 106 FTEs through the fiscal year.
In addition to the W-2 systemic verification process, the Protecting  Americans from Tax Hikes Act also required taxpayers that filed a U.S.  federal tax return containing an Individual Taxpayer Identification Number  (ITIN) to renew the number if the ITIN was not used on at least one tax  return in the past 3 years or it was issued prior to 2013 and contained  certain middle digits. IRS deactivated approximately 11.5 million ITINs  and notified affected taxpayers via mail and public notices. If affected  taxpayers did not renew their ITIN either before filing or in conjunction  with filing, their refund may have been delayed. As of April 15, 2017, IRS  had renewed over 130,000 ITINs and rejected approximately 16,300 ITIN  renewal applications.
section_title: IRS Launched a New Online Application, but Others Were Unavailable or Discontinued
paragraphs: IRS established its new online application in November 2016, but other  key applications were unavailable or discontinued. IRS’s new online  application is designed to assist taxpayers with straightforward balance  inquiries. It allows taxpayers to view their IRS account balance—including  the amount they owe for tax, penalties, and interest—and take advantage  of various online payment options. For example, through the online  account application, taxpayers can access IRS’s Direct Pay application,  which allows taxpayers to pay their individual tax bill or estimated tax  payment directly from their checking or savings account at no cost. As of  April 1, 2017, IRS’s new online account application had been accessed  more than 550,000 times since its launch. In addition, IRS has processed  over 35,000 Direct Pay transactions totaling $109.4 million since  November 2016.
As we previously reported, in June 2016, IRS discontinued its e-file  Personal Identification Number (PIN) tool, with which taxpayers could  retrieve their e-file PINs online or via telephone. The e-File PIN served  as an alternative signature verification method on the Form 1040 series  and helped assist taxpayers with electronically filing their tax returns.  Discontinuing this tool followed IRS’s announcement in February 2016  that cybercriminals had stolen more than 100,000 e-file PINs through the  tool. In addition, in March 2017, IRS and the Department of Education  responded to security concerns and removed access on fafsa.gov and  StudentLoans.gov to IRS’s Data Retrieval Tool—the online process  through which student financial aid applicants obtain their family’s tax  information. IRS suspects that fraudsters used personal information  obtained elsewhere to access the Data Retrieval Tool in an attempt to  access tax information, particularly the adjusted gross income. As of April  6, IRS reported that fewer than 8,000 fraudulent returns from this incident  had been filed, processed, and refunds issued but estimated that about  100,000 taxpayers may have been affected. IRS said that it expects the  Data Retrieval Tool to be unavailable until October 2017 while IRS and  the Department of Education make updates.
section_title: Implementing GAO’s Prior Open Recommendations Could Help IRS Improve Service
paragraphs: IRS is making progress implementing our prior recommendations to  improve its service, particularly in the following areas:
Customer service strategy. We have made several  recommendations for IRS to improve taxpayer service. For example,  in 2012, we recommended that IRS outline a strategy that defines  appropriate levels of telephone and correspondence service and wait  time and lists specific steps to manage service based on an  assessment of time frames, demand, capabilities, and resources. In  2014, we recommended that IRS systematically and periodically  compare its telephone service to the best in business to identify gaps  between actual and desired performance. Moreover, in December  2015, we suggested that Congress should consider requiring the  Secretary of the Treasury to develop a comprehensive customer  service strategy in consultation with IRS to enable the agency to make  a more informed request to Congress about resource requirements  needed to deliver specific levels of service, similar to what we  recommended in December 2012. In February 2016, IRS  announced a “Future State” initiative for agency-wide operations,  which aims to improve services across different taxpayer interactions  such as individual online account assistance, exams, and collections.  As part of this initiative, IRS completed a study benchmarking its  telephone performance against the best in the business, and we are  reviewing the report to determine whether it addresses our December  2014 recommendation.
IRS officials have told us that many of our other service-related  recommendations will ultimately be incorporated into IRS’s Future  State initiative. However, it is unclear the extent to which and when  our recommendations will be fulfilled by IRS’s initiative. For example,  in November 2016, IRS provided us with documentation on the goals  of the initiative, which included goals on improving taxpayer service.  However, the documentation does not detail levels of telephone and  correspondence service and wait times, as we recommended in  December 2012. We will continue to assess the Future State  initiative as IRS works to develop it. Finalizing a long-term,  comprehensive strategy for customer service will help ensure IRS is  maximizing the benefit to taxpayers and possibly reduce costs in other  areas, such as for IRS’s telephone operations.
Online services. IRS has made progress in addressing our  December 2011 and April 2013 recommendations to improve its  online services strategy; however, as of March 2017, IRS had not yet  completed its efforts. For example, IRS’s Future State initiative aims  to improve services across different taxpayer interactions such as  individual account assistance, exams, and collections. IRS also  revised its business case template in 2014 for new online services to  include, among other things, a discussion of costs, benefits, and risks  of future projects, consistent with our April 2013 recommendation.  However, we reviewed IRS documentation and found that the  business case contained some of the information we recommended,  such as high-level time frames, but was missing other information,  such as the benefits and costs of the project. Further, it is unclear how  IRS plans to use the business case to prioritize future projects. IRS  told us it implemented a new process for online investments that  requires details on expected benefits and costs to be reviewed by the  senior executives for prioritization and follow-up. As of March 2017,  IRS has not provided additional documentation concerning this  process. Analyses of benefits and costs can help agencies decide  which new projects to start in a manner that maximizes the benefits  derived from agency resources. IRS also requested funding in the  fiscal year 2017 budget justification to enhance web applications,  including the online account previously discussed.
In conclusion, W-2 systemic verification shows promise of being a  powerful tool for addressing IDT refund fraud and possibly other types of  fraud. IRS has also continued to improve its telephone service, which is  important in helping taxpayers comply with the tax code. Addressing our  open recommendations—including developing long-term strategies for  customer and online services to ensure that IRS is maximizing the benefit  to taxpayers and reducing costs in other areas, such as for IRS’s  telephone operations—could further help IRS in those endeavors.
Chairman Buchanan, Ranking Member Lewis, and Members of the  Subcommittee, this concludes my prepared remarks. I look forward to  answering any questions that you may have.
section_title: Contacts and Staff Acknowledgments
paragraphs: For questions regarding this statement, please contact me at (202) 512- 9110 or LucasJudyJ@gao.gov. Key contributors to this statement include  Joanna M. Stamatiades (Assistant Director), Dawn Bidne, Jehan Chase,  Heather A. Collins, James Cook, Felisa Garmon, Robert Gebhart, John  Hussey, Melissa King, Kirsten Lauber, Robert MacKay, Donna Miller, and  Erin Saunders Rath.
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