IRS broadens free e-filing

IRS broadens free e-filing

The IRS has expanded its Free File initiative this year to include all taxpayers who wish to file their taxes electronically.

Taxpayers are able to obtain software with which to fill out their returns and then e-file for free by linking to the Free File site through

Last year, more than 3.5 million taxpayers used Free File, a partnership that includes the IRS, professional tax preparers and software providers.

'We've once again expanded the population of those who can participate in e-file,' said IRS commissioner Mark Everson this week.

For 2005, any taxpayer with access to the Internet may qualify for Free File through the IRS site. Each company sets its own criteria for free usage. The criteria vary but often are based on income, state residency and age. However, some have no restrictions for participation, IRS said. Companies, which are allowed to revise their offers during the filing season, charge for completing state tax returns.

IRS expects the number of e-filers this year to increase to half of all those filing returns. Last year, almost half, or nearly 62 million tax returns, were filed electronically.

'There are fewer errors, so there are fewer refund delays,' Everson said. 'If you e-file and use direct deposit, you can receive your refund in approximately two weeks.'

Taxpayers generally can file their returns electronically either by using an approved tax professional, or by purchasing or downloading tax software.

Tax professionals file the vast majority of electronically prepared returns. However, the fastest growth rate is among taxpayers using software to prepare their own returns, the IRS said. The number of self-prepared computer-filed returns has nearly tripled to 14.5 million returns in 2004 from 5 million returns in 2000.

After this year, IRS will discontinue the telephone-based Telefile program for simple returns because of shrinking demand.

About the Author

Mary Mosquera is a reporter for Federal Computer Week.

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