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January 21, 1999
It May Still Be Certain, but at Least It's Easier
By STEVEN E. BRIER
t is that time of year again, when thoughts turn from the happiness of holidays to the terror of tax time.
Associated PressPAPER CENTRAL - The scene at the I.R.S. office in Philadelphia last April.
Overview
• It May Still Be Certain, but at Least It's Easier
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Three years ago, tax web sites were much like the rest of the Web: plentiful, scattered and not very interactive. But, as the Web has matured, and the computers and software that drive it have gotten more powerful and fancier, Web sites that deal with tax information have become more sophisticated and capable. Even the venerable Internal Revenue Service web site has tax forms that can be filled out online and printed, a far cry from the days when everything had to be downloaded, printed and then filled out by hand.
Some of this change comes about as a result of the I.R.S. e-file program, in which tax returns can be filed electronically, whether by telephone or through a computer. This has spurred an increase in Web sites that can handle tax calculation and filing through a browser, something unheard of just a few short years ago.
Last year, about 25 million returns were filed electronically, about one in five according to the I.R.S. This year, the agency expects that number to climb to about 30 million. This is a significant change for the I.R.S., which still has its employees retyping all the information that comes in on paper returns, whether it was done by hand or computer -- and even if it comes in on the 1040PC form. Every return that comes in electronically is one less that has to be retyped and, according to the IRS, the money saved will be redirected to customer service and upgraded computer systems.
And there is a great deal of room for improvement. According to the I.R.S., half the professionally prepared personal returns are prepared on computer but less than a quarter of those are filed electronically. A paltry 28,000 of the approximately 9 million individual extensions requests, seeking permission to file late returns, are filed electronically.And a picayune 1,000 of the 23.8 million payments that accompany individual returns are received electronically, leaving the I.R.S. awash in a sea of paperwork and perpetuating a process that is prone to error.
Traditional tax software providers like Intuit and H&R Block have jumped on the e-file bandwagon. They have been joined by companies such as One Tax, Tax Act and Secure Tax that provide information as well as software and online filing services. The incentive for consumers to use such services is the promise of easier filing, faster refunds and fewer contacts with the I.R.S.
The sites that have the Web-based tax programs uniformly offer tax advice of high quality. H&R Block's Kiplinger Tax Cut , for example, offers a handy section titled "50 ways to cut your taxes." Such advice is a good way to draw people to the site and maybe sell its software and services.
Not of all the sites offer taxpayers the opportunity to file electronically. Many abound that simply provide tax information.And since most people tend to do their taxes at night and on weekends, the Internet is perfect place to get answers to questions. Even for the 80 percent of filers who still use paper.
Steven E. Brier is a freelance technology writer based in New Jersey.
