IRS waits on Congress to decide tax return move to modern platform

The IRS hopes to move 1040 individual tax returns that are electronically filed to its Modernized e-File platform in 2009, but it depends on the budget that Congress approves.

Congress holds the key to what year IRS and individual taxpayers will begin benefiting from the modernized platform, said Bert DuMars, director of IRS’ Electronic Tax Administration. The budget will determine if IRS begins the three-year process in 2009 or 2010.

“If we get the budget, it gets kicked in. We don’t get the budget, it gets delayed. We’re ready to go as soon we have the money ready to go,” he said today (Thursday) at a tax and software industry event sponsored by the Council for Electronic Revenue Communication Advancement in Arlington, Va.

Congress passed a continuing resolution to keep the government operating through later this month. When Congress returns, it must approve appropriations for most departments.

Modernized e-File is a Web platform now used by large corporate filers for tax and information returns. This year was the first year that IRS required very large corporations to file their returns electronically, and the response exceeded its targets, DuMars said. Next year IRS lowers the threshold of revenues so more businesses will be required to file their returns electronically.

Currently, the 1040 electronic filing program is a batch-driven process. IRS drains it three times a day.

“With the modernized 1040, you send it; we acknowledge it. It becomes more of a real-time process,” DuMars said, adding, “A lot of improvements will be made that will eliminate barriers or perceived barriers to e-file that we have today.”

DuMars also reported that the IRS will go operational with an automated fingerprint system by Jan. 1. The system is aimed at accelerating background investigations for electronic return originators, who are tax preparers and enrolled agents representing taxpayers.

“Fingerprints for background checks have been a paper process coming in that becomes electronic at the FBI,” he said. The process can take up to 60 days now but with the automated system should take only two days, he said.

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