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The ETA needs you.

The IRS needs tax practitioners help to meet the aggressive electronic filing goals laid out in the Restructuring and Reform Act of 1998. That was the message Robert E. Barr, IRS assistant commissioner for electronic commerce and chief of the Electronic Tax Administration (ETA), recently delivered to a group of practitioners in New York City.

"We clearly cannot be successful in the ETA without the support of the practitioner community" Barr said.

He explained that professional tax preparers now complete 50% of tax returns. To achieve the goal of having 80% of all returns electronically filed by the year 2007 (as mandated in the 1998 act), the IRS must persuade practitioners to file all their returns electronically.

"The good news is that, although we have challenges ahead, the whole marketplace is moving with tremendous speed toward the new technologies and the ETA is riding that wave," Barr said.

As evidence of the electronic trend, Barr pointed to the statistics for the 1999 tax season.

The IRS received electronically more than 29 million of the total 125 million returns filed. Overall, the number of electronically filed returns in 1999 increased 19%, and the number of returns electronically filed by practitioners increased 20%, over the prior year.

In addition, the IRS collected $1.2 trillion from employers through the Electronic Federal Tax Payment System (EFTPS) for fiscal year 1998, an amount which grew by 18% this year. EFTPS, which now accounts for more than 80% of all federal tax deposits, allows businesses to pay their payroll taxes electronically.

This season's new options and pilot programs were aimed at creating a completely paperless tax return process, Barr said. The most important developments included an expanded electronic payment option and personal identification number (PIN) pilots.

This year, for the first time, the IRS offered taxpayers the option of paying by credit card. Approximately 53,000 tax liabilities were paid using the cards.

The IRS also conducted two PIN pilots aimed at eliminating paper signature forms. It mailed postcards with electronic customer numbers to eight million taxpayers. Approximately eight percent (649,576 filers) used the numbers on their returns this year.

In another pilot, involving 2,493 tax practitioners, taxpayers were allowed to choose a one-time PIN for their 1998 returns. Using the PINs, the practitioners filed 496,119 returns.

What's in store in the year 2000? Barr said the ETA wants to expand payment options by increasing the number of credit card companies that participate in the program. The ETA is also working to increase the number of forms that can be filed electronically.

Another goal is to eventually have taxpayers use digital signatures. In the meantime, however, the ETA plans to increase the number of both individual and practitioner participants in its PIN pilots for the 2000 tax season.
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Title Annotation:IRS Electronic Tax Administration
Publication:Journal of Accountancy
Geographic Code:1USA
Date:Oct 1, 1999
Words:466
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