IRS seeks to accelerate matching of external information to refund returns
The IRS wants to move closer to a ‘real-time’ tax system that would allow them to identify matching discrepancies between individual tax returns and the information reported to the IRS from third parties. Such a system would require W-2’s, 1099’s and other information returns normally reported to the IRS in February or March to be reported earlier. For instance, 50% of individual refunds for the filing season had been issued by the end of Feb. 2011, at that time only 3% of the third party information had been received by the Service. As the IRS continues to think in this direction, changes in information reporting would be necessary, possibly even moving 1099 and W-2 reporting to a real-time system. Changes here are expected to be a long way off however. The full story and comments can be read here.
