FROM THE OFFICE OF PUBLIC AFFAIRS

Washington, DC –As many as 78 million Americans will be able to file their taxes online at no cost next year thanks to a proposed new agreement announced today by the Department of the Treasury and Office of Management and Budget (OMB). The agreement provides easier, secure, and free opportunities for Americans to file their taxes via the Internet. The text of the proposed agreement will be published in the Federal Register and is attached.

"Our current tax code is needlessly time consuming and confusing. We need to make it easier to understand and easier to comply. This new e-filing partnership is one positive step forward. We’re taking advantage of technology to reduce the cost and the hassle of filing for millions of taxpayers," stated Treasury Secretary Paul O’Neill.

"Paying taxes is burden enough. It’s our duty to do anything we can to make the process simpler and easier," said OMB Director Mitchell E. Daniels, Jr.

According to the proposed agreement, a consortium of private sector companies will work together to offer free online tax filing services, an option that could benefit some 60 percent of taxpayers. Taxpayers will find links to the online tax filing services through a single, centrally-located Web portal at www.irs.gov and available through www.firstgov.gov.

The proposed agreement will produce significant advantages for both citizens and their government.

• 78 million will no longer have to pay to file their tax returns online. Currently, taxpayers who choose to file online can pay an average of $12.50 in filing fees in addition to the cost of purchasing tax preparation software.

• Taxpayers who file electronically will get their refund checks twice as fast on average as those who file on paper.

• Electronic filing reduces government processing costs and improves efficiency.

The terms of the proposed agreement will be published shortly for public comment. After a 30-day comment period, all suggestions will be reviewed. The new free tax filing consortium Web page is slated to be online by December 31, in anticipation of the 2003 filing season.

This project fulfills one of the President Bush’s 24 E-government initiatives and was proposed in his February 2002 budget. The President also proposed a 15 day filing extension for all taxpayers who file electronically, including those under this initiative. That proposal awaits final Congressional action.

E-government is an integral part of the President’s Management Agenda to make it easier for citizens and businesses to interact with the government, save taxpayer dollars and streamline citizen-to-government transactions. A copy of the president’s E-government strategy, which includes information on each of the 24 E-government initiatives, is available on the OMB Web site at www.omb.gov.

Commissioner Rossotti’s statement is attached.

The text of the agreement is attached.