Tax News

CCH (cch.taxgroup.com) reports:

  The IRS had a very "successful filing season" and experienced "significant growth in e-filing," reported David Williams, director, Electronic Tax Administration and Refundable Credits, IRS. Speaking at the 2009 IRS Software Developers Conference in Arlington, Va., on June 8, Williams was generally upbeat over progress made on e-filing as the IRS continues to make progress toward the 80-percent e-file goal set by Congress.

Online Filing Increases

  Williams reported that there was a 20-percent growth rate in online filing. He attributed the increase to taxpayers becoming "more comfortable interacting electronically" as well as the "elimination of separate e-filing charges."

  The IRS also experienced a growth in online PIN returns, which, Williams revealed, caused a rise in call volume at the IRS because taxpayers were trying to get their adjusted gross income (AGI) so they could file electronically. Nevertheless, the IRS did not see a decline in e-filing because of this change.

Free File Usage Drops

  Williams also reported that the IRS saw a "significant" drop in Free File usage, "despite improvements in the program" and Free File's availability to approximately 100 million taxpayers. Williams theorized that the decline may have been caused by the tax software industry's offer of free products and significant marketing of those products during the filing season. Williams also commented that, with Free File agreements ending in 2009, the IRS will be looking at ways to renegotiate those agreements.

Healthcare Proposals Effect on Tax Administration

  Williams revealed that with the Tax Code's continuing and increasing importance to Congress for serving as "a place to go to enact what used to be spending provisions," the IRS continues to be concerned with how to effectively "administer things that are coming to us, which is mostly refundable credits." He expects that, with healthcare high on Congress's agenda, the IRS and Congress will be examining how to administer the Tax Code's health-care provisions.

Advancing E-file Study

  The IRS Advancing E-file Study is a major effort to collect and analyze all substantial data on the IRS e-file program in order to help the IRS validate and launch future studies, research, and other activities to meet the congressionally set goal of an 80-percent e-file rate. The IRS has completed Phase 1 of the study, which contains various options for e-filing and to increase e-filing by taxpayers. The Phase 1 study is available online.

  Williams said that he plans to internally circulate a draft of the study's second phase within the next month seeking input on the filing options set forth in the draft. Williams could not commit to a public release date of the draft.

  By H. Goehausen, CCH News Staff