Millions use IRS Free File

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By the time there was only a week left in the tax-filing season, more than 2.4 million people had filed their taxes online for free using the Internal Revenue Service's Free File site, officials announced today.

With the deadline looming tonight — April 15 — last-minute filers surely will elevate that total, and IRS officials view the numbers as of April 9 as an encouraging sign for one of the most recent e-government initiatives.

IRS and the Office of Management and Budget launched Free File in January, providing access to almost 20 tax preparation software services from companies that signed strict agreements with the IRS, negotiated through the Free File Alliance.

The ultimate goal of the Free File initiative is to increase the percentage of returns prepared and filed electronically. The IRS wants to have 80 percent of all returns filed electronically by 2007, although officials admit that the goal is a hard one to reach.

Last year almost 25 million returns were filed electronically, representing 35 percent of all returns. The number of electronic returns has already topped that level this year.

Free File is intended to boost electronic filing by eliminating one of the concerns people have had about e-filing — that it is more expensive than mailing in returns. Officials estimate that at least 60 percent, and possibly as many as 80 percent, of citizens are eligible for the services provided through the agreement with the alliance.

Once the filing season is over, IRS plans to review the feedback received from citizens and alliance partners to consider modifications to the agreement, according to officials.

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