04.20.07

Schumer Reveals: NY'ers Paying IRS Millions In Electronic Filing Fees - Demands IRS Allow Free Electronic Filing For Everyone By Next Tax Day

IRS Cuts Lucrative Deals With Software Companies and Paid Preparers, Even though Filing Online Saves Government Time and Money This Year Over 1.1 Million New Yorkers will Pay For the Privilege of Filing their Taxes Electronically, Saving the IRS Millions of Dollars and Countless HoursSchumer Unveils Plan to Make Efiling Free For All Taxpayers

With online tax filing fast becoming the easiest way for people to pay their taxes online Senator Schumer today blasted the IRS for charging a fee that eases the financial burden on them instead of the taxpayer. In New York City 3.3 million people will file taxes this year and 1.2 million will file online costing them 16 million dollars all while saving the IRS money. Schumer today called for the IRS to make efiling free by next year.

"The bottom line is that the IRS is imposing an additional 'tax' on people paying their taxes," Schumer said. "Filing online eases the burden on the IRS and their idea of thanks is charging filers a fee."

For the IRS, there are enormous cost savings from efiling. While processing each paper return costs $2.65, an efiled return costs only $0.29. From New York City Efiling alone this year the IRS will save $4.7 million dollars. Efiling is also more accurate. The IRS finds roughly 1 error in every 100 returns filed electronically (regardless of whether the return was prepared professionally of selfprepared by the taxpayer), compared to about 1 error in every 5 paper returns. Filing income tax returns electronically also has significant advantages for taxpayers. Filing online from the comfort of one's home is more convenient for, return processing is faster, and refunds can be sent out more rapidly

Though filing electronically saves the IRS millions of dollars they impose a fee for the privilege of filing taxes online though paper returns, which are more expensive to process, do not have an additional charge. This is because the IRS made a deal with paid preparers and software companies (like Intuit, who developed Turbo Tax) to not offer free filing because the companies were concerned it would hurt their business. In exchange for the IRS staying out of the software business the companies agreed to offer free electronic filing for people whose income is under 52,000 dollars. Everyone else has to pay to efile by going through an outside vendor either software or a paid preparer even through the system saves the government money. Even those who qualify for free filing must go through an incredibly complicated system to and even then they are pushed into buying other services for additional fees.

"Paying a fee for the privilege of paying your taxes, to SAVE the government money is backwards. If filing your taxes on paper is free, so too should an easier system that costs less and saves time," Schumer said.

In an effort to ensure that New Yorkers and taxpayers across the country aren't hamstrung by this fee ever again, today sent a letter to IRS Commissioner Everson demanding that the IRS back out of their contract with the software companies and paid preparers and offer free efiling within a year.



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