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Highlighted herein is a summary of Michael Cohn, article “7.8 Million Tax Refunds Delayed This Season at IRS” in Accounting Today, April 18, 2012. The memo summarizes the key points of the article and concludes with why it is of importance to the company as well as its effect in the financial statement.
Basically, this article is about a report of taxpayers who file their returns through electronic means and the problems they experience due to fraud and problems with the IRS’s modernized e-File system. According to the analyzed report, the 2012 interim results filling season most of the taxpayers experienced problems from delayed feedback of their returns which amounted to 7.8 million which is a rising figure compared to last filling season figure of 6 million in estimation (Cohn, 2012).
According to the author, the IRS indicates that the problems were experienced with the filter which identifies any case of fraud and the program that creates the output files. The filters were able to identify the fraud even though some of the taxpayers were incorrectly identified as fraud and this resulted in their returns being delayed for longer periods for further screening (Cohn, 2012). The programming also has problems in the modernized electronic file system which resulted in the delays for the current tax return processing in the season. The program created unfinished and/or replica output files from the data compiled (Cohn, 2012). This in addition resulted in more interruptions in delivering the output documents to the downstream processing system.
These findings reveal how such delays from the IRS can create huge problems for a large corporation that requires faster services in tax returns and needs to protect its image by avoiding cases of tax frauds. Such a faulty system can imply that the corporation may be sued for tax frauds which may damage its reputation. The delays and errors may also lead to problems in the company in creating and publishing its financial statements to the stakeholders. Such problems include wrong information being published or being delayed from the time the annual statements have to be published to the public/
Works cited
Cohn, M. “7.8 Million Tax Refunds Delayed This Season at IRS” Accounting Today. April 18, 2012. Web. 16 April. 2012.
