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GCN Home > 05/08/06 issue

IRS struggles to take next step in E-filing

With Congress weighing in, agency looks to expand services, increase usage

By Rob Thormeyer, GCN Staff

The height of tax season may be past, but the IRS is still feeling the pinch, as the agency tries to expand its electronic filing and free tax services.

With Congress hot on the case, IRS officials are acutely aware that the pressure is on to make tax services more accessible.

“People are watching us,” Bert DuMars, director of the IRS’ Electronic Tax Administration office, said at a recent conference sponsored by the Council for Electronic Revenue Communication Advancement in Arlington, Va.

Congress is sharpening its focus on the agency as it looks for ways to improve E-filing. But with a tight IT budget, agency officials realize they are limited in how much they can expand the program in the near future.

“We’re experiencing big cuts in the budget, and we’re really feeling it this year,” said Sandra Clifton, chief of the IRS’ e-Submission Processing division.

The IRS overall received a slight decrease to $11 billion (adjusted for inflation) in the fiscal 2007 budget request the White House sent to Congress earlier this year. On the IT side, the IRS’ Business Systems Modernization program requested $167.3 million, a $29.7 million decrease from last year.

New users, services

E-filing, though, remains a top priority as the agency works to bring in more users by adding new services, DuMars said.

“We hit an all-time high on a system that hasn’t improved much in the past two years,” he said. “We need to upgrade it.”

Though the number of E-file users grew again this year (see chart), the growth rate has certainly slowed.

The Government Accountability Office, in testimony before the Senate Appropriations subcommittee on Transportation, Treasury, the Judiciary, Housing and Urban Development, and related agencies, said E-filing grew 2.1 percent this year. Although data released by the IRS more recently reported that the number of e-filers actually increased by 6.2 percent, and topped 70 million, it still shows a decrease on the rate of growth (see chart).

This decline has caught the attention of other members of Congress.

“The IRS needs to have an aggressive game plan to increase electronic filing in the near future,” said Senate Finance Committee chairman Chuck Grassley (R-Iowa) after an early April hearing on tax preparation.

One factor keeping more people from filing electronically, the IRS has said, is a change made to the Free File program this year. Free File, which debuted in 2003, is a means to provide free tax services to moderate and low-income taxpayers.

More news on related topics: Business Process Management, E-Government, Management, IT Management



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