IRS suggests most people e-file tax forms

Is it a lingering distrust of technology? Habit? Is it about money?

During the 2004 tax filing season, about 36 million taxpayers, including 265,524 Utahns, comprised a group the Internal Revenue Service calls "v-coders": They prepared, or had others prepare, their federal taxes using tax preparation software. Then, when the forms were complete and they were presented with the choice of immediately submitting the return electronically or printing the form and sending it in the mail, they chose the latter.

"It is an interesting phenomenon," said Bert DuMars, director of the IRS's electronic tax administration.

And one the administration hopes will end.

Why not just click "send"?

Some perhaps are worried about the expense of filing electronically. Others, DuMars said, might be worried about identity theft or data security.

But both federal and state tax officials said Thursday that e-filing is the way to go, thanks to its speed, safety and accuracy.

"Please," DuMars said. "If they're doing (their taxes) on software, or if a preparer is doing it on software, please e-file. It's the fastest, easiest, safest way."

Electronic tax filing has been around for about two decades, but the IRS said it wasn't until last year that more taxpayers filed electronically than with paper. In Utah, an estimated 522,000 individual federal returns were e-filed in 2005 — about 52 percent of the tax returns filed, according to the IRS.

On the state level, the Utah State Tax Commission said electronic filings are increasing, on average, 5 percent per year. In 2004, 48.4 percent of income tax filers filed electronically.

"We strongly encourage people to e-file whenever possible," said Charlie Roberts, spokesman for the tax commission. "It's more accurate. It's more confidential, and you're going to get a faster refund, if you've got a refund coming."

The IRS reports that returns filed from home computers are up almost 17 percent over last year. Of the 60.7 million returns filed during the first three months of 2006, about 71.5 percent were e-filed, compared to 69.7 percent during the first quarter last year.

By the time the filing season ends, the IRS estimates that e-filed returns will make up more than half of all returns filed. And by 2007, it wants 70 million returns submitted electronically — though it admits that might be a tough mark to hit.