IRS Offers Paperless E-filing

ByABC News
January 3, 2001, 9:24 AM

W A S H I N G T O N, Jan. 3 -- The IRS finally is making electronic taxfiling truly paperless and projects that 42 million taxpayers willchoose the e-file option this year, 20 percent more than lastyears record high number.

People who want to zap their returns to the IRS will selectunique five-digit personal identification numbers instead ofmailing in a separate paper signature form, which had hindered morerapid growth of e-filing, IRS Commissioner Charles Rossotti said.

People made fun of us: Youve got electronic filing, but then youve got to file a piece of paper. It didnt make a lot of sense, Rossotti said. This really makes electronic filingpaperless.

New and ImprovedAbout 35 million returns were e-filed in 2000, including somewith PINs chosen for taxpayers by the IRS. About 5 million e-filereturns came from people using home computers, with the rest sentby paid preparers.

To confirm the taxpayers identity, the IRS also wants e-filersto include adjusted gross income and tax amounts from last yearsreturns. A proposed $10 credit to offset any electronic filing feesfailed to pass Congress, but Rossotti says benefits of e-filinginclude faster refunds, greater accuracy and specific confirmationthat the return was received.

Tax preparation software and many Internet sites include ane-file option, often but not always for a fee. Taxes owed can bepaid electronically using many major credit cards or via directdebit from a bank account.

In addition, the IRS is adding 23 forms to the list that can befiled electronically, meaning almost every individual taxpayer cannow use the e-file system.

Its going to help growth because it gets us into taxpayersthat havent been able to do it before, said Terry Lutes, actingIRS electronic tax director.

Other Changes Effective NowThe new electronic filing system is one of many changeseffective for this tax filing season, which ends this year atmidnight April 16. The traditional deadline, April 15, falls on aSunday.