US Taxpayers Catching On To IRS E-File System

by Mike Godfrey, Tax-News.com, Washington

12 May 2004

Half of all individual tax returns are likely to be filed electronically next year, IRS Commissioner Mark W. Everson predicted, as the agency announced another record year of usage for its e-file program.

Data released by the Revenue earlier this week revealed that 60 million taxpayers filed their returns via the internet up to April 30 this year, representing a 7 million, or 15.4% increase on the previous year.

Included in this was a 21.7% jump in the number of taxpayers using a home computer to file their taxes with 14 million choosing this route, whilst tax professionals filed 41.7 million returns electronically, up 15.8% on last year.

Meanwhile, the ‘free file’ program, a public/private venture between the IRS and a consortium of tax software firms, saw a 22% increase in usage to 3.4 million returns.

Under this scheme, each private company sets its own eligibility requirements for the Free File program. The IRS hosts the Free File Web page, but the online tax preparation occurs on the companies’ Web sites. The companies file the returns using IRS’s secure e-file transmission system.

“This year shows a clear trend line developing with e-filing,” observed IRS Commissioner Mark W. Everson. “It seems safe to say that next year we will reach a milestone with half of all individual returns being processed electronically.”

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