IRS: E-file goal is a stretch

The Internal Revenue Service has made great strides in increasing the number of taxpayers filing returns electronically, but the tax service must show significant increases if it is going to meet the 2007 deadline of having 80 percent of all returns filed electronically, the IRS commissioner said.

Internal Revenue Service

The Internal Revenue Service has made great strides in increasing the number of taxpayers filing returns electronically, but the tax service must show significant increases if it is going to meet the 2007 deadline of having 80 percent of all returns filed electronically, the IRS commissioner said.

That requirement will be difficult but is still within reach, said IRS Commission Charles Rossotti.

The 1998 IRS Restructuring and Reform Act mandates that the IRS receive 80 percent of all tax returns electronically by 2007. The IRS will have to increase the number of electronic returns by 20 percent each year to achieve that goal, Rossotti said.

"The IRS' overarching goal is to conduct most of its internal and external transactions by electronic means," Rossotti told the House Government Reform Committee's Government Efficiency, Financial Management and Intergovernmental Relations Subcommittee last week. In the 2001 tax-filing season, more than 29 million individual taxpayers had submitted their returns electronically by March 15, up 10 percent from the same period last year, Rossotti said.

By comparison, the IRS reported that more than 35 million taxpayers filed electronically in 2000, making up about 28 percent of all individual returns, a 20 percent increase over 1999's numbers.

This year, the IRS added 23 tax forms to its 1040 "e-file" program. And next year the IRS will make 38 additional forms and schedules available, thereby making 99.1 percent of all taxpayers eligible for the e-file program.

The IRS is also looking to boost the number of businesses that can do business online. Rossotti said that the Electronic Federal Tax Payment System this year processed more than 63 million tax payments, a 14 percent increase.

IRS officials said they have taken steps to ensure that taxpayer data filed electronically is safe. Robert Dacey, the General Accounting Office's director for information security issues, said the IRS corrected several previously reported weaknesses and is implementing a computer security management program that should help the IRS manage risk.

Electronic tax filing is a cornerstone of IRS' modernization. "A robust [e-filing] system helps form the foundation of a modernized IRS," Rossotti said.

Dorobek is a freelance writer based in Arlington, Va.

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