the IRS It is creating an electronic case management system to track cases in which a taxpayer contacts the agency about a missing payment, and the IRS employee receiving the inquiry is unable to locate the payment.
The agency does this in response to recommendations Treasury Inspector General for Tax Administration TIGTA made the decision after finding there was a need to update the software that resolves unidentified taxpayer payments, TIGTA said on Thursday (May 21). a report.
TIGTA found that for fiscal years 2022 through 2024, the IRS had $3.2 billion in unidentified payments. This was often due to missing or incomplete payment information preventing the agency from applying payments to the correct taxpayer’s account. Examples include checks or money orders that do not include the taxpayer’s name, identification number, form type or tax period, according to the report.
Of those unspecified payments, the IRS successfully applied $2.3 billion to taxpayer accounts. However, the report said the agency does not have adequate controls to administer the program for “hard payment tracking” cases in which an IRS employee cannot locate a payment.
After reviewing this situation, TIGTA recommended that the IRS develop an electronic case management system and associated internal controls to manage inventory flows across the IRS’s accounting operations. The IRS is now working to create such a system, according to the report.
TIGTA also recommended that the IRS develop an interim process for robust payment tracers until the new system is established. The IRS did just that, the report said.
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The IRS also agreed with TIGTA’s recommendation that the agency develop evaluation metrics to help evaluate the efficiency and effectiveness of its process for identifying and addressing issues related to unidentified payments, according to the report.
While a March 2025 executive order mandates that all payments to and from the federal government be electronic, the IRS received 41.4 million paper payments out of a total of 302.6 million payments it received in the 2025 calendar year, TIGTA said in its report.
He added that while the increased use of electronic payments will reduce many of the factors that contribute to ill-defined paper payments, “taxpayer errors, such as ported bank account numbers, can still occur with electronic payments.”
the Executive order President Donald Trump in March 2025 signed the federal government to stop issuing them Paper checks for payments by September 30, 2025, and to stop accepting payments “as soon as possible.”
