January 14, 1999
Electronic Tax Filing Starts Today
WASHINGTON - The Internal Revenue Service announced that the
electronic filing season for 1998 income tax returns started today.
TeleFile, the file-by-phone system, opened its lines this morning.
Filing by computer starts tomorrow.
"Our annual e-file volume has increased by 10 million over the
past two years, to the point that one out of five taxpayers e-filed
last season," said Bob Barr, IRS Assistant Commissioner for
Electronic Tax Administration. "We hope to sustain this momentum and
possibly surpass our projection of 29.6 million returns in 1999."
Taxpayers who received a TeleFile package from the IRS may call
a toll-free number and complete their tax filing in about ten
minutes. TeleFilers use the Customer Service Number from the package
as their electronic signature, eliminating the need to send any
paperwork to the IRS. Almost 6 million people used TeleFile last
More than 18.6 million taxpayers e-filed by computer last year,
either through tax professionals or from their homes. The IRS has
two pilot programs this year to eliminate the remaining paper
documents for many e-filers. Participating taxpayers will not need
to send any signature form or W-2 forms to the IRS.
In one pilot, about 8100 tax professionals will give their
clients a chance to choose a personal identification number, which
they will use as an electronic signature. In the other pilot, the
IRS mailed e-file customer numbers (ECNs) to taxpayers who used a
computer last year -- whether they sent their returns electronically
or as a paper printout -- and invited them to use the ECN as a
signature on an e-filed return.
Taxpayers may now extend their paperless e-filing experience by
authorizing a bank account debit. Any person filing by computer may
arrange for a withdrawal directly from a checking or savings account
for the taxes owed. Many people already use such direct debits for
mortgage, auto, or utility payments. Taxpayers may file early and
have the debit occur as late as April 15. There are no fees for this
Also for the first time, taxpayers may charge a balance due on a
credit card. Those using Intuit tax preparation software to file
from home will be able to use a Discover Card brand card for their
balance due, starting Feb. 28. The payment information will be part
of the electronic file they send. Others who e-filed by computer or
phone may call toll-free to 1-888-2PAY-TAX and arrange payment of
their 1998 taxes with a MasterCard, Discover, or American Express
card. This pilot starts Jan. 15.
Private sector companies will process the credit card
transactions and report the payment amounts -- but not the credit
card numbers -- to the IRS. Users will pay convenience fees. The IRS
is not involved in the setting or collection of such fees. The law
allowing tax payments by credit card prohibited the government from
paying fees to the credit card companies.
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