The IRS Wants You To File Income Tax Returns Electronically; CCH Outlines E-filing Options For Taxpayers
(RIVERWOODS, ILL., January 23, 2003) Ė If you were one of the
millions of Americans last year who was still checking the mailbox for
your tax refund check weeks after you mailed your tax return to the
IRS, you may want to consider electronically filing your return in
2003, according to CCH INCORPORATED (CCH), a leading provider of tax
law information and software.
In fact, nearly one-third (32 percent) of all individual income tax
returns were e-filed during calendar year 2000, according to
government statistics. While do-it-yourself e-filing is the
fastest-growing e-filing method, seven out of 10 electronic returns
are still filed by tax preparers on behalf of their clients.
The government wants even more taxpayers to join the digital age,
with Congress identifying a goal to have 80 percent of all tax returns
filed electronically by 2007. The IRS is making an all-out effort via
its e-file program to encourage even more taxpayers to give it a try.
definitely less costly and less labor-intensive for the IRS when
taxpayers e-file, but itís also beneficial for taxpayers," said
Kevin Robert, president, CCH Tax Compliance, developer of CompleteTax
an online tax preparation and filing service for consumers, and
ProSystem fx Tax, the market-leading software for tax
"If you e-file your return, you should receive your refund Ė
assuming youíre getting one Ė about twice as fast as you would if
you just mailed in your return. And, you can get it even faster if you
authorize the IRS to deposit the refund directly into your bank
E-filing also is far more accurate, with the IRS reporting an error
rate of less than one percent for e-filed returns compared to about 20
percent for paper returns.
If youíre ready to take the plunge into e-filing, there are a
variety of options available.
Using a Tax Preparer
You can choose to have a tax preparer both prepare and e-file your
return for you, or you can complete your own return and use a tax
professional for e-filing only.
"Essentially, you get what you pay for," Robert cautions.
"So if you only pay the firm to file your return, thatís all
theyíll do. If your return is rejected, itís your responsibility
to fix the problem. Also, unlike a taxpayer who uses a professional to
prepare the entire return, someone who just pays the firm to e-file
canít expect the firm to be available to respond to IRS inquiries or
a potential audit down the road."
The IRS provides a zip-code enabled program to locate Authorized
IRS e-file Providers on its site at http://www.irs.gov/efile/page/0,,id=100148,00.html.
Using a Computer
Just as selecting a tax preparer needs to be based on the taxpayerís
specific requirements, selection of an online tax preparation and
filing solution should be driven by the taxpayerís particular needs.
"Features of the different programs vary. Some are very
costly, with bells and whistles most do-it-yourselfers would likely
never use, while others can be barebones, lacking tools and
information that most individuals need to guide them through the
tax-return process," explained Robert.
As a result, the cost of preparing and filing returns via an online
or PC-based software program can vary significantly. However, you
should be able to find a solid solution for preparing both your
federal and state (42 states now permit e-filing) returns for under
After youíve chosen a service and entered the necessary data, the
program should conduct a final check, letting you know of potential
problems with the information you provided (e.g., math errors,
exclusion of a Social Security Number, etc.) so it can be corrected.
Once youíre satisfied the return is complete, e-filing it with
the IRS is just a matter of selecting a PIN as your signature and
clicking a few buttons. You will be notified electronically of IRS
acceptance of your return within two working days. If it is not
accepted, the IRS will provide details explaining why. You can then
use the online program at no additional charge to resubmit your
The IRS provides details on software companies participating in its
e-file program at http://www.irs.gov/efile/lists/0,,id=101223,00.html
Free E-filing for Qualified Individuals
Two free filing options exist for specific groups of taxpayers who
meet certain criteria: filing via the newly formed Free File Alliance
or toll-free filing via the IRSí TeleFile program.
Under an agreement between the IRS and a group of software
companies known as the Free File Alliance, free online tax preparation
and electronic filing services are being made available to at least 60
percent of all individual taxpayers ó about 78 million people. Each
alliance member determines which taxpayers to serve, with most setting
specific criteria, such as offering services to those below a certain
Those who are eligible can access Free File Alliance services on
the Internet via www.irs.gov
Another free-filing option is the IRSí TeleFile program, which
allows taxpayers to electronically file their return over a touch-tone
phone via a toll-free number.
To qualify, a taxpayer must meet several requirements, including
having filed a return in the previous year that met the filing
requirements for Form 1040EZ. The IRS automatically sends TeleFile
packets to individuals who meet these criteria. However, not many
individuals take advantage of this option, as roughly 3 percent of all
e-filed returns are received via TeleFile.
CCH E-Filing Resources
CCH Tax Compliance is an IRS e-file partner,
offering individuals and sole proprietors fast, easy online tax
preparation and filing via CompleteTax (www.completetax.com).
CCH Tax Compliance is also a member of the Free File Alliance.
More information on its online services under this program is
available at www.irs.gov
CCH Gainskeeper (www.gainskeeper.com),
a CCH company, also is an IRS e-file partner, offering both
individuals and their advisors help in completing complex
calculations related to capital gains, adjusting portfolios for wash
sales and corporate actions.
CCH INCORPORATED, headquartered in Riverwoods, Ill., was founded in
1913 and has served four generations of business professionals and
CCH Tax Compliance, headquartered in Torrance, Calif., is a leading
supplier of software for tax and accounting professionals. The
ProSystem fx Office is a powerful, integrated suite that
includes modules for tax compliance, tax planning, trial balance,
fixed assets, practice management, paperless tax and audit engagements,
outsourcing and web site development.
CCH and CCH Tax Compliance are wholly owned subsidiary of Wolters
Kluwer North America. The CCH tax and accounting web site can be
accessed at http://tax.cchgroup.com
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