Seldom does one federal agency save money at another’s expense. But that’s how it’s looking more than a year after the Internal Revenue Service opted to stop delivering millions of income tax forms by mail.
The IRS announced the decision in September 2010 as part of a push to economize on its annual printing and postage budget. As of this past August, the savings on postage costs just from not mailing Form 1040 packages amounted to about $4.1 million, according to a recent report by the Treasury Inspector General for Tax Administration. That was money lost to the U.S. Postal Service, which is in financial crisis driven partly by the shift to e-mail and electronic commerce.
The Postal Service recouped about half of that amount because the IRS used postcards to notify taxpayers of the change. But as the report notes, that was a one-time expense. And the report doesn’t attempt to quantify what the Postal Service will lose from the additional taxpayers who go with the IRS’ advice to “e-file” their annual returns.