NCPA - National Center for Policy Analysis

IRS Offers Free E-Filing of Taxes

December 26, 2002

The Internal Revenue Service expects to announce in mid-January the names of about 78 million Americans who will be eligible for free tax preparation and Internet tax-filing.

  • The timing could irritate millions of taxpayers who by then may have spent $40 for tax preparation software or $20 for Web-based preparation -- only to learn that they could have filed for free.
  • In 2002, some 35 percent of taxpayers filed online -- a disappointing response from the standpoint of the IRS, which says that e-filings are cheaper to process than paper forms.
  • The IRS has instructed tax preparation firms to say nothing about the free offers before its own announcement.
  • The agency has four more years to reach an 80 percent e-filing rate.

Some states now allow taxpayers to file a return directly from a state Web site.

Source: Thomas A. Fogarty, "Sixty Percent of Taxpayers Will Qualify for Free E-Filings," USA Today, December 26, 2002.

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