WASHINGTON
— IRS e-file, the popular electronic tax return delivery service used by
two-thirds of the nation’s taxpayers, opens for business January 15 and marks
20 years of safely and securely transmitting nearly 800 million individual federal
tax returns.
The Internal Revenue Service debuted
e-file nationally in 1990, delivering 4.2 million tax returns. Last year, IRS
e-file delivered 95 million tax returns, 66 percent of all returns filed.
“Electronic
filing is more and more popular every year, and most taxpayers now e-file. IRS
e-file means faster refunds. It means the option to file now and pay later if
you owe additional tax. It means peace of mind knowing the IRS received the return
because we send an acknowledgement. Those are the reasons this has been a popular
service,” said Doug Shulman, IRS Commissioner. “IRS e-file is safe,
it’s easy and everyone should try it.”
Last
year, more than 49 million taxpayers missed out on the e-file benefits. The IRS
urges taxpayers, especially those people already using tax software, to take the
next step and e-file their return or ask their preparer to e-file their return.
The IRS urges tax preparers who electronically file some of their clients’
tax returns to consider filing all tax returns through e-file.
The
IRS is working on faster acknowledgements of accepted or rejected returns. Last
year, taxpayers received an acknowledgement within 48 hours that the IRS had accepted
or rejected their return. Paper filers do not receive any acknowledgement. Also,
if the IRS rejects an e-filed return, it will provide more specific explanations
of the errors that caused the rejection. This will enable taxpayers to make corrections
and quickly resubmit their returns.
IRS e-file
offers the fastest, safest way for people to receive their tax refunds. By using
e-file and direct deposit, taxpayers can get their refunds in as few as 10 days.
Taxpayers even can opt to have their refund deposited into two or three financial
accounts or purchase a U.S. Savings Bond.
For
those who owe additional tax, e-file is still the best option. People can file
now and pay later, as long as the payment is received by April 15. Taxpayers can
set the date for an automatic withdrawal from their financial accounts or they
can pay by credit card. People also can e-file and pay by check by simply attaching
the payment to a voucher that is mailed to the IRS.
Other
e-file benefits include a reduced error rate (1 percent compared to nearly 20
percent on a paper return), which means a decreased likelihood of hearing from
the IRS. Also, federal tax returns are delivered to the IRS through a highly secure,
encrypted transmission system. Just like paper returns, e-filed returns remain
confidential.
There are three ways to use e-file:
through tax preparers, through most tax preparation software or through IRS Free
File. The IRS does not charge for e-file. Many tax preparers and software products
also offer free e-filing with their services.
As
people become more comfortable using computers and the Internet for financial
transactions, the IRS has seen a huge growth in the number of people who are preparing
their own tax returns with the help of software. For people seeking free electronic
options, IRS Free File offers something for almost everyone through two formats.
Traditional
Free File provides free tax preparation software and free electronic filing to
individuals or families who earn less than $57,000. Traditional Free File is a
public-private partnership in which approximately 20 tax software manufacturers
make their tax preparation software and e-filing available for free.
Everyone
can use Free File Fillable Forms. This service, now in its second year, provides
free online tax forms that can be completed and filed electronically. These are
electronic versions of IRS paper forms. This program is ideal for people who are
comfortable preparing their own returns with little assistance.
People
must access Free File through the IRS Web site at www.IRS.gov and click on Free
File or www.IRS.gov/freefile.
People can read more about Free File at www.freefile.IRS.gov.
People
looking for a tax preparer who files electronically and for more information on
e-file can review IRS e-file for Individuals. Taxpayers also can locate an e-file
authorized tax professional nearest to them by doing a zip code search.
