IRS issues strategy to stimulate electronic tax filing

 

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The IRS this month announced 45 initiatives to encourage taxpayers to file electronically. Congress this year mandated that by 2007 the IRS receive at least 80 percent of income tax returns electronically. A major barrier is cultural, said Robert Barr, assistant commissioner for electronic tax administration. The IRS has to make the public feel comfortable with electronic filing, he said. To do that, it will begin running television commercials promoting electronic filing.

The IRS this month announced 45 initiatives to encourage taxpayers to file
electronically.


Congress this year mandated that by 2007 the IRS receive at least 80 percent of income
tax returns electronically.


A major barrier is cultural, said Robert Barr, assistant commissioner for electronic
tax administration.


The IRS has to make the public feel comfortable with electronic filing, he said. To do
that, it will begin running television commercials promoting electronic filing.


Second, the IRS has to resolve the issue of authentication. The challenge is not
securing the data in transit, said chief information officer Paul J. Cosgrave, but
authenticating the identity of the person sending the data.


The IRS’ Electronic Tax Administration announced the 45 initiatives in a new
report, A Strategy for Growth. The list includes multiple goals the agency has set
for itself:


The IRS must make electronic filing, payment and communication so simple, inexpensive
and trusted that taxpayers will prefer it to calling and mailing, Barr said.


The service handed out its 52-page strategy at the first public meeting of the
Electronic Tax Administration Advisory Committee, the independent group that Congress
charged with overseeing the IRS effort.


Congress established the committee because members did not trust the IRS, said Anita
Horn, member of the Senate Finance Committee’s minority tax staff. The comments from
small businesses during the writing of the IRS Restructuring and Reform Act made a strong
impression on members, she said.


The committee will have the dual roles of working with the IRS to offer private-sector
input and reporting to Congress its views on the IRS’ progress.


“Tell us if something the IRS is doing seems wrong,” Horn advised the
committee.


The group includes both representatives from technology companies and tax
organizations.


Some of the companies that have representatives on the committee sell tax preparation
software.


The companies have said they do not want the IRS to compete with them in the electronic
filing market.


“Congress wants to see benchmarks along the way,” Horn said. One benchmark
calls for the IRS after 2001 to receive electronically all returns prepared on computer.


Congress will hold an annual oversight hearing each March to gauge the IRS’
progress and review the committee’s status reports.

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