IRS on record pace for e-filing

The Internal Revenue Service announced this week that a record number of taxpayers are filing their 2002 taxes electronically.

By April 8, 40 million taxpayers had filed their returns online, surpassing last year's total, according to IRS Commissioner Charles Rossotti.

Rossotti, testifying April 9 before the House Ways and Means Committee's Oversight Subcommittee, said the tax agency expected to reach or even surpass its goal of 46 million online filers this year.

"While we are heading in the right direction, we still have a lot of work to do," Rossotti said.

The IRS has a goal of 80 percent of all taxpayers filing online by 2007, and that may still be a target that is tough to meet, he said.

"We'll be close to 80 percent by 2007," he told the panel.

Since 1997, e-filing has increased by 110 percent, he said. And taxpayers are getting more comfortable using computers to interact with the IRS.

He also reported that the IRS' modernization program had graduated from strategic planning to business results. The 15-year project is expected to cost billions of dollars and replace the IRS' 1960s-era legacy system.

In 2001, he said, the modernization program developed a communications infrastructure to manage taxpayer phone calls. This year, the IRS plans to move the records of some taxpayers out of the legacy tape-based system to a modern database. It also expected to establish an agencywide security system providing internal and external secure access.

Rossotti, whose term is up in the fall, made his last official appearance testifying before the congressional panel.