The IRS will continue into the 2010 tax year season marketing its E-File program. The system offers the ability to file taxes for all parties involved and is required for an professional tax preparers and their clients.
Performance-wise the IRS estimates that now over 1 billion tax filings have been managed and received though E-file to date. The expansion of the Internet, particularly with broadband aspects, has speeded up this opportunity to more and more tax filers. This of course includes tax filings that are professionally prepared which are required by the IRS to be E-filed. Subsequently, the IRS has also used the same system to generate almost 900 million tax refunds since 1990.
Unlike the paper system, the electronic system also allows the IRS to adjust faster to last-minute statutory tax law changes. For example, December 2010 saw the end of the year congressional changes in the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act that delayed the ability for some files to send in their more complicated income tax filings early. However, because many of the changes could be made electronically, the IRS is now able to address such changes and take filings again by mid-February 2011 versus the original projection of March 2011.
Timing-wise for the taxpayer, the IRS E-file system has consistently been the fastest way for a taxpayer to file and get a tax refund. General turnaround timing can be from two to three weeks once an electronic tax filing is sent in to see a tax refund. Again paper filings are much slower, averaging four to six weeks or even longer during the height of tax filing season at or around April 15th annually.
Given computers and the problems with identity theft so apparent these days, once of the concerns with E-file is the guarantee of personal identification security. For twenty years now the IRS has been able to maintain the E-File system successfully without security failures. This track record has been regularly updated with improved technology standards and requirements of IRS vendors to ensure system protection with new changes and equipment.
Payment processing is also secure as well. For those who owe taxes to the IRS payments can be coordinated with E-file records submitted. As the taxpayer files via E-File, then he or she can make coordinated payments via the IRS payment processing program on its website which takes electronic payment. Either bank accounts or credit cards can be used as payment tools to send funds.
However, E-File is not required. Taxpayers are still free to file their taxes either by traditional paper format and mail them in, or by using a certified tax preparer for filing preparations. Additionally, if people are comfortable with a commercial brand name software, they can still effect both paper and electronic filing through that commercial software. However, the taxpayer just needs to make sure the software is updated with the latest updates and is consistent with the IRS application of tax laws. Taxfilers are strongly urged to use the latest copy of the software specific to their tax year rather than reusing the old software year after year. Commercial packages typical cost anywhere from $40 to $90 depending on how complex of a software package is desired.
To get more detail or access the IRS’ E-File program, taxfilers can obtain information either from the IRS website at www.freefile.irs.gov or by reading IR-2011-5.
