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Wall Street Journal: IRS Wants Free E-Filing

September 15, 2008

WASHINGTON -- The tax season may be about to get a bit simpler.

The Internal Revenue Service has asked private, tax-software companies to find a way to let all taxpayers file their online forms at no extra charge. Currently, many people file electronically, but often must pay a fee to actually submit their forms.

The new effort was disclosed in a letter from Intuit Inc. to the office of Sen. Charles Schumer (D., N.Y.), chairman of the Joint Economic Committee, who has raised concerns about the fees.

IRS spokeswoman Michelle Eldridge on Sunday said the agency is in an "ongoing dialogue" with the Free File Alliance, a group of tax-software companies, including Intuit, that already provides free e-filing to taxpayers with incomes of $54,000 or less.

"We're exploring options for making the Free File Alliance available to as many taxpayers as possible," Ms. Eldridge said. She declined to provide further details.

Electronic filing tends to be more accurate and efficient for the government, as well as more convenient for taxpayers. Still, the IRS has fallen short of a goal set by Congress to have 80% of returns filed electronically by 2007. Currently, about 60% of tax returns are filed electronically.

One barrier to electronic filing for some taxpayers may be the fees, which typically range between about $15 and $30.

Intuit's letter to Mr. Schumer, dated Sept. 12, said expanded free filing "can be realized for the coming 2009 tax season."

Taxpayers spent more than $1 billion in 2007 on fees associated with electronic filing, according to a report by the Joint Economic Committee.

Earlier this year, Mr. Schumer, along with fellow Democratic Sens. Daniel Akaka of Hawaii and Jeff Bingaman of New Mexico, proposed legislation to require the IRS to provide free e-filing through an electronic portal.

"This is a huge victory that we've been seeking for a long time. At last, taxpayers will be able to file with ease and without expense," Sen. Schumer said in a statement Sunday.

In many cases, people appear to calculate their taxes on a computer and then print out the forms to mail to the IRS, possibly to avoid the extra fee. More than 43 million paper returns filed in 2007 were filled out this way, according to the Joint Economic Committee report. Paid tax preparers submitted about 30 million paper returns in 2007, the report found. If they had instead submitted electronic returns, the IRS would have saved about $65 million, it said.

Write to Sarah Lueck at sarah.lueck@wsj.com

http://online.wsj.com/article/SB122144153879934659.html?mod=googlenews_wsj


Year: [2008] , 2007 , 2006

September 2008

 
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