IRS E-File: More Than 1 Billion Taxpayers Served Since 1986

Despite growth, electronic filing program still has kinks

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IRS e-file, the electronic transmission system that sends tax returns to IRS processing centers, has passed the one billion mark for individual tax returns processed, the agency announced Thursday.

Started as a pilot projectin 1986, the electronic filing program became available nationally in 1990. Taxpayers can e-file through their tax preparers, through commercial software they use to prepare their own returns or through Free File, the free tax software and e-file program offered through IRS.gov.

Before this year’s April 18 filing deadline, IRS e-file passed another high point as more than 100 million individual tax returns were e-filed during the 2011 filing season.

Despite its growth, e-file has experienced growing pains. As late as 2007, wealthier individuals were facing kinksin the program that had yet to be worked out. And a January 2011 reportby the Government Accountability Office said gaps related to content management and usability reviews continued.

Congressional Mandate

In 1998, Congress set an 80% goal for the electronic filing of federal tax and information returns. E-file is now very close to that mark, the IRS said, with more than 79% of taxpayers having used e-file to submit their tax returns so far this year.

The IRS said it expects to meet the goal in the next filing year, thanks to a Congressional provision passed in 2009 that requires tax preparers who file 10 or more tax returns to use e-file. The agency said it is phasing in this law, which brought a surge of e-filed returns for 2011. Tax preparers this year who filed 100 or more returns were required to e-file. For 2012, tax preparers who file 11 or more returns will be required to e-file.

 “IRS e-file is a good deal for taxpayers,” IRS commissioner Doug Shulman said in a statement. "The one billion milestone means e-file has delivered real services to taxpayers, including faster refunds and more accurate tax returns.” And because of increased efficiency, the program saves taxpayers hundreds of millions of dollars, he said.

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