(Washington, DC) The IRS Oversight Board today voiced cautious optimism about the future of the IRS’ Electronic Tax Administration (ETA) program. Given current progress and strategic planning, the Board concluded that the IRS can meet an 80 percent e-file goal by 2012 – but only with continued discipline and the help of the professional tax community and Congress. In addition, the Agency’s Taxpayer Assistance Blueprint (TAB) now provides a roadmap to the long-term customer e-service vision that goes beyond mere e-filing. These are just some of one of the findings and recommendations contained in the Board’s annual report to Congress on electronic filing that was released today.
IRS Oversight Board Chairman Paul Cherecwich commented: “One of the IRS’ major goals and challenges is to make its electronic channel – IRS.gov – the first choice of taxpayers and stakeholders for obtaining the information and services they need to comply with their tax obligations. This is good government at its best. The Agency is adopting proven best practices and modern technology to deliver real world benefits to taxpayers while reducing burden and costs for both taxpayers and government.”
Although it has been evident to the IRS Oversight Board and others in the tax administration community for some time that the IRS would not reach the IRS Restructuring and Reform Act of 1998 (RRA 98) goal of 80 percent electronically filed tax returns by 2007, the Board does not view this as a failure on the IRS’ part.
In the nine years since the enactment of RRA 98, the percentage of individual e-filed returns nearly tripled – from 20 percent in 1998 to about 58 percent in 2007. There has also been steady growth in the number of self-prepared individual returns filed electronically. As the Electronic Tax Administration Advisory Committee (ETAAC) noted in its 2007 e-file report to Congress, this progress is very gratifying as it indicates that e-file is catching on with those who had previously resisted it.
The IRS Oversight Board also supports the vast majority of ETAAC’s thoughtful, prudent and practical recommendations to help the IRS achieve its ETA vision. These suggestions include: increasing participation in electronic filing; delivering other electronic services to customers based on specific needs; and better protecting taxpayers and the tax administration system from those engaged in fraudulent tax activities.
The Board also commends the ETAAC for calling on Congress to revise requirements on mandatory electronic filing of certain tax returns and information documents. The Board supports ETAAC’s recommendation that Congress lift the prohibition on the IRS’ ability to require electronic filing of Form 1040 tax returns, and grant the Agency the discretion to implement e-file mandates for paid return preparers at a later date if needed to reach the 80 percent goal.
However, as the Board has consistently stated, the IRS should implement mandates only after certain conditions are met, such as thoroughly exploring all reasonable incentives to promote greater voluntary participation and studying the trade-offs between increased e-filing and taxpayer and preparer burden. The Board does not want mandates to become a substitute for making electronic filing more convenient and attractive.
Chairman Cherecwich concluded: “The IRS Oversight Board and the ETAAC share a common strategic vision for electronic tax administration. It is no longer a hypothetical environment for the future. It is something real that affects taxpayers today and that the IRS must expand and further leverage technology to provide America’s taxpayers the tax products and services they expect in this modern age.”
The IRS Oversight Board Electronic Filing 2007 Annual Report to Congress can be found at the Board’s web site at www.irsoversightboard.treas.gov.