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More people filed tax returns electronically this year

WASHINGTON (AP) _ A record number of people filed their tax returns electronically this year.

More than 70 million taxpayers, or 57 percent, transmitted their tax returns through a computer, the Internal Revenue Service said Wednesday.

But the number of people who took advantage of free tax preparation software offered through the IRS fell by 23 percent. This effort is designed to encourage electronic filing.

The agency said the number of electronic filers surged in the last few weeks before the deadline, indicating that people expecting to write a check to the IRS increasingly file electronically.

The IRS long has promoted electronic filing as a way to get back a refund more quickly.

``Overall, we received more tax returns electronically this year than the number of paper returns we processed for the entire United States in 1966,'' said the IRS commissioner, Mark Everson.

The number of individuals and families filing their taxes from a home computer increased more than 18 percent this year, to nearly 20 million.

Many more people, however, electronically filed their tax returns with the help of a paid preparer. More than 50 million people, or 9 percent more than last year, got professional help and filed electronically.

Fewer people, however, took advantage of IRS Free File. The program encourages electronic filing by making free tax preparation software available through the IRS Web site. Last year, when some private software companies offered their programs to everyone, 5 million people participated.

This year, a new agreement between the IRS and the private companies limited eligibility for free tax preparation software to individuals and families earning not more than $50,000. More than 3.8 million people used the program this year, about 23 percent less than last year.

The Free File software remains available until this fall, keeping it available for individuals who filed for extensions and need to file their tax returns.

Congress has pushed the IRS to convert 80 percent of taxpayers from paper to electronic filing by 2007. The independent IRS Oversight Board has said the tax agency probably will not achieve that goal, but it could reach the mark by 2011.
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