Practitioners see little value in direct tax-filing portal

Tax practitioners say that having taxpayers file their tax returns directly on the Internal Revenue Service's Web site would not be easy for taxpayers and would not significantly increase the number of e-filers.

The IRS Oversight Board, which consulted with tax professionals in preparing its 2006 annual report, noted in that report that they and state tax representatives, advocacy groups and IRS advisory councils agree that it is more important to e-enable all tax forms and returns rather than build an IRS direct-file Web site.

Many tax practitioners said they already have extremely high rates of e-filing. Those rates are high because tax professionals see the value of e-filing and many states have e-file mandates. Others consulted by the board for the report said problems with the IRS' computer systems could complicate matters if taxpayers filed their returns directly. The report did not detail those problems.

Tax professionals, however, said that having third-party transmitters handle e-filed tax returns eases some of the technical burdens of e-filing. The e-file transmitters rather than professional tax preparers take responsibility for testing interoperability with IRS computer systems and for receiving acknowledgments of transmissions and receipts, according to the report.

“This, in turn, allows the practitioners to stay focused on actual return preparation and other client services,” the report states.

Lawmakers, including Senate Finance Committee Chairman Sen. Max Baucus (D-Mont.), have supported proposals to build a Web portal on the IRS’ Web site where taxpayers could file their returns rather than having to file through third-party tax preparers.