IRS studies expanding electronic filing

The Internal Revenue Service is conducting a study to consider measures that could increase the number of taxpayers filing their returns electronically and expects to report on the first part of that study later this month, David Williams, director of IRS’ Electronic Tax Administration and Refundable Credits, said recently. The study, which IRS hired Mitre to perform, is the result of calls by a number of members of Congress and other advocates for a service or portal to let taxpayers directly e-file their returns to the IRS without charge. The Senate Appropriations Committee has directed IRS to report on proposals to advance e-filing. “IRS is not taking a policy position for or against any one of them. We’re trying to make sure we have an objective picture,” Williams said May 1 at an event sponsored by the Council for Electronic Revenue Communication Advancement. The report will not make recommendations but will detail all the proposals by consumers and federal, state and industry users. The possibilities could include a PDF version of a tax form that a taxpayer could fill in and submit to the IRS,  use of a 2-D bar code to scan taxpayer data from paper forms, taxpayer incentives, and the methods state and foreign governments use for e-filing. The IRS will release later the second part of the report, which will analyze the gaps and cost, legislation and budgeting needed for the proposals, he said. More taxpayers are submitting their returns electronically each year, but growth in that area is incremental, Williams said. As of mid-April, e-filing had grown to 62 percent from 58 percent last year. Congress the goal to achieve 80 percent of taxpayers e-filing by 2008. That goal has been extended to 2012.