E-Filing Continues to Grow, Exceeds 80 Percent Goal

By Christina Camara

Saying that paper tax returns are "steadily becoming a thing of the past," the IRS Oversight Board reports that e-filing of individual tax returns has surpassed an 80 percent goal.
 
About 81 percent of individual income tax returns were filed electronically in 2012, the IRS Oversight Board reported in its annual report to Congress.
 
The Internal Revenue Service Restructuring and Reform Act of 1998, however, set forth the 80 percent goal for all major individual, business, and tax-exempt returns by 2012. The board estimates the e-filing rate for that broader group of returns to be 71 percent.
 
"Nevertheless, the board is generally satisfied with the overall steady progress being made in the percent of major tax returns filed electronically, which grew more than four percentage points between 2011 and 2012, and which the board expects to reach 80 percent in the near future," the report said.
 
The initial goals were challenging, the board states, praising Congress, the IRS, tax preparers, and individual taxpayers for the high rate of electronic filing. "This milestone reflects the culmination of years of effort, innovation, and adaptation," the report states.
 
"In 1998, about 29 million individual, business, and tax exempt returns were filed electronically with the IRS, while over 135 million returns were filed on paper. However, for 2012, the board estimates that over 136 million tax returns will now be filed electronically, compared to approximately 56 million filed on paper."
 
The benefits of e-filing are many, including faster refunds, improved accuracy, confirmation that the tax return has been received, and lower processing costs for the IRS. Also, surveys show that individuals who file returns electronically are much more satisfied with the process than those who file on paper.
 
Other advancements for 2012 include the start of daily tax account processing for individual returns and full implementation of the Form 1040 Modernized e-File (MeF) application. The report noted that not all developments last year were positive, as refunds for about seven million taxpayers early last year were delayed about a week. The computer glitches were corrected by February, the report said.
 
Challenges include: increasing the electronic filing of employment tax returns, limiting tax fraud, including schemes based on identity theft; and improving computer systems. The entire report can be found on the IRS website.
 

You may like these other stories...

School tax breaks get House support as Democrats objectRichard Rubin of Bloomberg reported that the House of Representatives on Thursday voted to expand and simplify tax breaks for education as Republicans continue to pass...
Many senior US tax professionals believe that a streamlined audit process will be the top benefit resulting from the IRS Transfer Pricing Audit Roadmap, a new toolkit organized around a notional 24-month audit timeline,...
Tax accounting to be simplified for money-market fundsThe US Securities and Exchange Commission (SEC) voted 3-2 on Wednesday for sweeping changes to institutional money-market funds, Emily Chasan, senior editor of...

Upcoming CPE Webinars

Jul 31
In this session Excel expert David Ringstrom helps beginners get up to speed in Microsoft Excel. However, even experienced Excel users will learn some new tricks, particularly when David discusses under-utilized aspects of Excel.
Aug 5
This webcast will focus on accounting and disclosure policies for various types of consolidations and business combinations.
Aug 20
In this session we'll review best practices for how to generate interest in your firm’s services.
Aug 21
Meet budgets and client expectations using project management skills geared toward the unique challenges faced by CPAs. Kristen Rampe will share how knowing the keys to structuring and executing a successful project can make the difference between success and repeated failures.