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IRS Website Now Allows Taxpayers to Fill Out Their Tax Returns And File Electronically For Free with the Ease of Only One Click

Last Year, Schumer Brokered Agreement With IRS, H&R Block And Intuit To No Longer Charge Taxpayers Unfair E-File Fees

U.S. Senator Charles E. Schumer announced that the Internal Revenue Service today will launch its revised website allowing all taxpayers to file their taxes electronically at no extra charge.  Online tax filing is the easiest, cheapest, and most efficient way for Americans to pay their taxes and for the government to process them, yet in the past taxpayers had been forced to pay an additional fee to file their taxes electronically due to exclusive agreements between the IRS and tax preparation software companies. Last year, Schumer brokered an agreement with the IRS, H&R Block and Intuit, to provide free efiling to all taxpayers using their software. In that agreement, the IRS created its own portal on which taxpayers can file their taxes electronically directly with the IRS, rather than needing to purchase software in order to efile. Schumer has been pushing for years to make efilling free and available for all taxpayers and applauds the taxpreparation software providers and the IRS for the work they have put into developing this online utility.  The website went live at 8:00am this morning and will be available until April 15 th.


"This is a great victory for taxpayers in New York and across the country because it will make filing taxes easier, and most importantly, cheaper than ever," said Schumer. "While New Yorkers are struggling to make ends meet, the last thing they need is to pay a tax for the privilege of paying taxes online and I am proud to have helped bring this unfair practice to an end."


 Electronic filing fees averaged $14.95 for the 2007 tax year. The IRS previously offered free efiling to only those taxpayers whose income was under $52,000. Most other taxpayers had to pay to efile by going through a third party tax preparer or purchasing taxprep software. At Schumer's urging, the IRS has also created its own electronic tax filing portal where taxpayers can fill out their forms online and then file them online for free directly with the IRS rather than needing to purchase software in order to file electronically.  


New Yorkers spent a total of over $28 million in efiling fees last year, not counting the additional costs many incurred in hiring paid preparers or purchasing taxprep software.


Senator Schumer noted that the availability of a free online system for filing taxes will also affect the multitudes of people who use tax preparation software but send printouts to the IRS to avoid the online fees. Now these filers can avoid the inherent risks of mishaps when sending their taxes through the mail, without having to pay additional fees. 


The taxpayer savings from the online system will far exceed the savings from the elimination of efiling fees. Electronic filing is the easiest, cheapest, and most efficient way for Americans to pay their taxes and it is also the cheapest and most efficient way for the IRS to process taxes. Processing paper returns costs the IRS $2.65, while an efiled return costs only $0.29 to process. The IRS finds roughly one error in every one hundred returns filed electronically, regardless of whether the return was prepared professionally or selfprepared by the taxpayer. Yet the IRS finds approximately one error in every five paper returns, incurring massive additional processing costs.


In 2007, Senator Schumer called on the IRS and the taxprep software companies to end their collusion and allow all taxpayers to file online for free, regardless of income level. Late last year, the IRS came to an agreement with the Free File Alliance, a group of taxsoftware companies, to expand efiling via the website. The IRS also developed a web portal with fillable forms that can be submitted online so that taxpayers will no longer have to buy software or use a paid tax preparer if they wish to file electronically. Now taxpayers that wish to fill out their own returns will be able to complete and submit their returns online for the first time in 2009.