The IRS goes electronic -- for real this time
Modernized file system reduces labor and saves taxpayers' money
You may have been able to file your 1040 forms electronically for quite some time now, but until recently corporations had to do it the old-fashioned way -- submitting reams of paper. Complex corporate tax forms are too unwieldy for the IRS’s dedicated dial-up connections. Meanwhile third-party documents such as property appraisals were not supported and had to be submitted via the U.S. mail.
Now, thanks to the IRS’s new MeF (Modernized eFile) system, nearly everyone will be able to pay their taxes at the speed of light.
In February 2004, the IRS launched its new electronic filing system, which allows Internet filing through the RUP (Registered User Portal) and supports XML and SOAP formats. Now most corporations and nonprofits can file their returns over the wires, slashing the time needed to process forms and boosting accuracy.
According to the IRS, as much as 20 percent of all corporate paper forms contained inaccuracies; using MeF, the error rate dropped to less than 10 percent.
Eventually, the agency plans to use MeF to replace the electronic filing system used by individuals, partnerships, and estates, and migrate all forms.
The MeF has positioned the IRS to potentially ac-cept and process 80 percent of all tax returns electronically. The best part? By reducing the labor needed to process forms, MeF so far has saved taxpayers approximately $18 million.
