IRS says e-filing is up 12.4 percent

Although the total number of federal income tax returns is lagging this year, electronically filed returns are up 12.4 percent, the IRS reported last month.

The filing season seems to be getting longer as taxpayers postpone submitting their returns. But processing so far has gone smoothly, according to Terry Lutes, the agency's director of electronic tax administration. The IRS had processed 95.6 million returns as of April 25, an agency news release said.

The growth in self-prepared electronic returns was greater than among professionally prepared returns'almost 27 percent for the self-prepared, compared to just over 10 percent from paid preparers.

Of the 51.7 million e-filed returns, more than 2.7 million were submitted through the new Free File program, Lutes told an electronic tax preparers association meeting in Arlington, Va., last month. That's at least 300,000 more than the IRS was expecting, he added, saying, 'We're really pleased with that result.'

Not all the news from Lutes and other IRS officials was rosy. They reported delays in development of some new IRS systems and system enhancements and an unspecified increase in fraudulent returns, most of them electronic returns.

But 'it's been a very, very good year in a number of respects,' Lutes said at the meeting of the Council for Electronic Revenue Communication Advancement.

Adding metatags

So far this year, he said, the agency's Web site, at www.irs.gov, has had more than 3 billion hits. It had 3.1 billion all last year, he said, describing the growth as 'phenomenal.' The site had 89 million hits on April 15.

The agency is adding metatags to the site's pages to improve search speed and results. And George Coffin, acting director of Internet services development, told CERCA members that keyword navigation will reduce users' need to visit several pages to find what they want.

A project to expand and improve e-filing, known as Modernized E-File, is becoming a top priority, Lutes said. 'Our ability to significantly grow e-filing rests on this initiative,' he said, because many returns currently cannot be filed online--for example, individuals' Form 1041 returns for estates and trusts.

IRS has begun to shift its online forms to Extensible Markup Language and eventually will use only that format because supporting multiple formats is too costly, he said.

So many Web services are planned that IRS officials face a new challenge: how to present and market them all. Lutes commented that 'they can't all be on the front page.'

Another challenge is figuring out how to let filers pay their state and federal income taxes in a single transaction. The agency is working closely with state tax administrators on that, he said.

Also, credit card payments are up by 118,000, an increase of more than 50 percent, and they already total nearly $1 billion. 'We're assuming a lot of this is the economy,' which also is the likely cause of delayed filing this year, Lutes said.

About the Author

Nancy Ferris is senior editor of Government Health IT.

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