IRS e-file electronic tax filing program for individual and business tax returns has come a long way since its debut in 1986. The IRS began its endeavor into the world of electronic services by partnering with industry and the tax professional community. That partnership has continued to today and has allowed the program to expand to provide new services and to increase return volumes, reaching more taxpayers than ever before.
Key Milestones
1986 - Electronic Tax Filing begain in 1986, with the transmission of 25,000 refund-only individual income tax returns from five transmitters in three locations, Cincinnati, Raleigh-Durham and Phoenix, AZ. These returns were transmitted to the Cincinnati Service Center via a modem and were processed using the existing ZILOG system.
Each year since, the e-file electronic tax filing system has been expanded system to allow more taxpayers access to the program. By 1994, approximately 98 percent of all individual tax returns could have been filed electronically. The IRS continues to work toward enabling 100 percent of all forms and schedules.
1987 - The system became operational; certain business returns (Forms 1041, 1065, and 5500C/R) were accepted electronically. The system was upgraded with the addition of IBM Series I minicomputers for receiving and acknowledging returns. Use of the UNISYS system for preliminary process increased capacity. Development of the Archival and Retrieval System allowed quick access to return information.
1988 - Sixteen districts were added to the list of electronic filing areas.
1989 - With more districts added to the program, a total of 48 districts were participating.
1990 - Balance due returns were accepted for processing.
1991 - The Federal/State electronic filing program began, with the South Carolina State Tax Commission participating in the pilot. In 2003, 37 states and the District of Columbia offer Fed/State e-file.
1992 - Filing from home began with the 1040 TeleFile research test which processed 125,983 TeleFile returns from the state of Ohio.
1994 - Over 14 Million individual and 1.7 million business returns were filed electronically from over 39,000 transmitters--15.7 million electronic returns in all.
1996 - The Electronic Federal Tax Payment System (EFTPS) was implemented which allowed individual and certain business taxpayers to pay their federal taxes electronically.
1997 - 941TeleFile for Employment Taxes became operational for eligible employers.
1999 - The electronic payment program was expanded and an electronic funds withdrawal (direct debit) payment option was included in tax software, which allowed individual taxpayers to electronically file balance due returns and pay at the same time. The credit card payment option was also introduced which allowed individual taxpayers to either e-file balance due returns and pay by credit card at the same time or pay separately by phone or Internet.
2001 - The IRS introduced a new TeleFile feature that allowed taxpayers to request an automatic extension of time to file their individual tax return until August 15. In 2002, 636,215 taxpayers filed extensions over the telephone.
2002 - Fed/State TeleFile - 296,692 taxpayers filed their state and federal tax returns with a single phone call. In 2003, eligible taxpayers in seven states could use the Fed/State TeleFile system.
2003 - Over 53 Million individual returns were filed electronically - Nearly 37 Million from Tax Professionals.
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More than 150,000 tax preparers nationwide are authorized to e-file taxes on behalf of their clients.
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36.5 million returns were filed through an authorized e-file provider
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11.6 million taxpayers filed their own tax returns using home computers
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More than 60 percent of American taxpayers - or 78 million people, are eligible for Free File, which allows them to electronically prepare and file their own individual income tax returns for free. During 2003, approximately 2.4 million taxpayers used the Free File option.
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4 million people used TeleFile instead of filling out a Form 1040EZ
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6.7 million Business returns were electronically filed
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More than 22.8 million Federal/State tax returns were filed electronically
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During the 2003 filing season, 62 percent of individual e-filed income tax returns used an alternative signature method
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Nearly $900 million of taxes were paid by Credit Card.
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During fiscal year 2003, more than $1 billion of taxes were paid through the Electronic Funds Withdrawal (direct debit) option.
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The New Employment Tax e-file electronic tax filing System for Forms 940 and 941 launched. This new system is built on the XML platform.
2004 View the latest filing season statistics here.
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