More people should e-file, Senate panel says

The Senate Appropriations Committee is disappointed with the Internal Revenue Service’s efforts to get more taxpayers to file their tax returns online. It wants the agency to get 80 percent of returns e-filed by 2007, according to a committee report.

“Most experts, including the IRS Oversight Board, believe that the IRS will not meet its congressionally mandated goal,” states the committee report on H.R. 5576, the fiscal 2007 Departments of Transportation, Treasury, Housing and Urban Development, the Judiciary, the District of Columbia and Independent Agencies Appropriations Act.

The Senate’s proposed spending bill would direct the IRS, with the help of stakeholders such as the National Taxpayer Advocate, to develop a detailed strategic plan to meet the e-File goal. The plan would have to be submitted to the House and Senate appropriations committees by June 4, 2007, the report states.

In a February report to Congress, the IRS Oversight Board found that 52 percent of taxpayers filed online in 2005, 11 percent more than the previous year. In April, the IRS reported that 70 million tax returns were filed electronically this year, up 6 percent from April 2005. The jump in the use of e-File, it said, reflected a larger increase in the use of its electronic services. The IRS saw new records in filings from home computers and the use of IRS.gov.

The IRS Restructuring and Reform Act of 1998 set a goal for the IRS to have 80 percent of returns filed electronically by 2007, but the oversight board recommended in its February report that Congress extend the goal to 2011.

Even with an extension, tax experts have said getting the remaining taxpayers to file online will be as tough as persuading the first half of them to do so.