WASHINGTON -- The IRS saved approximately $14.19 million by not mailing Tax Year

2010 tax packages; however, eliminating the mailings increased the burden for about 6

million taxpayers who had to obtain tax forms, according to a new report by the Treasury

Inspector General for Tax Administration (TIGTA).

TIGTA initiated an audit to assess the implementation of the IRS's strategy to eliminate or

reduce the mailing of tax products, beginning with the Tax Year 2010 Filing Season. The

review included the IRS's efforts to monitor cost savings and the impact on tax compliance

and taxpayer burden. This is a follow-up review to a prior TIGTA report.

The IRS estimated that as of July 27, 2011, it had saved about $8.25 million. However,

TIGTA determined that the IRS overestimated its postage and printing savings by $2.08

million and did not include $8.02 million in savings realized by processing more tax returns

electronically. In addition, the data the IRS used to identify taxpayers who would have

received a Tax Year 2010 tax package and notify them they would not be receiving one

were inaccurate.

Eliminating individual tax package mailings increased the burden for a number of taxpayers,

including those who complained they could not locate the forms they needed or did not

know which forms to use. It also caused about 6 million taxpayers to spend an additional

1.5 million hours to obtain tax forms.

"An important part of the IRS's mission is to help all taxpayers meet their responsibilities,

even while striving to reduce costs," said J. Russell George, the Treasury Inspector General

for Tax Administration. "Additional taxpayer burden must be carefully considered when

developing strategies to reduce costs and implement efficiencies."

TIGTA recommended that the IRS develop a process to ensure savings and cost data related

to the future elimination or reduction of mailing tax products are current and reliable. In

addition, a formal strategy should be developed and documented to ensure that publishing

and postage costs are continually evaluated and cost and savings calculations are

documented and validated.

In its response to the report, the IRS stated that it agreed with the recommendations and

developed a process to ensure that information leading to the elimination and reduction in

the mailing of the remaining two tax packages is complete, current, and reliable. In

addition, it developed strategies to ensure it continually evaluates costs, implements

efficiencies, and evaluates taxpayer burden.