Congress eyes tax software pricing

As the number of individuals and businesses filing their taxes electronically continues to grow, an IRS official said Congress is paying close attention to how tax software developers price their products.

Bert DuMars, director of the IRS' Electronic Tax Administration, said that as Congress considers revamping the Tax Code, several lawmakers are asking questions about how the tax preparation community charges customers.

At a recent Senate Finance Committee hearing on the status of the IRS' E-filing services, chairman Charles Grassley (R-Iowa) said customers of electronic tax services 'are being inundated with additional charges that may accrue and the sale of ancillary services.'

Most customers who file their taxes electronically, once they purchase the software to do so, are also charged an extra fee for submitting their returns to the IRS, DuMars said. These fees can range from $9 to $14 dollars, leading a handful of customers to print out their returns and send them in the mail, he added.

'There is a big group of people who use a computer [to complete their return] and print it and mail it in,' DuMars said yesterday an industry conference sponsored by the Council for Electronic Revenue Communication Advancement in Arlington, Va. 'That's the group we have to convert' to electronic filing.

DuMars suggested that the tax software developers bundle the processing fee into the cost of their product, arguing that customers will still buy the software even if it costs a few extra dollars.

'The value is in the software and helping them get their taxes done,' DuMars said.

The number of e-filers jumped again this tax season, DuMars said, and surpassed the 70 million mark. This is up 6.2 percent from last year, he said.

Meanwhile, DuMars touted changes to the IRS' Web site that helped the portal make big strides in a recent customer satisfaction survey.

DuMars said the site revamped its search function, letting users find what they need faster and spending less time on the site.

'People were able to find what they need,' he said. 'They got to the site, found what they wanted and they got out.'

The site reached new highs in usage on April 17, receiving well over 300 million visitors and 3,000 hits per second, he said.

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