Paying to e-file? ? ?

Yes.

It does.

The service fee is to allow the software companies to recover ~THEIR~ investment in the preperation software. Do you qualify or FREE-FILE?

"The Free File program is a free federal tax preparation and electronic filing program for eligible taxpayers developed through a partnership between the Internal Revenue Service (IRS) and the Free File Alliance LLC, a group of private sector tax software companies. Since Free File's debut in

2003, more than 15.4 million returns have been prepared and e-filed through the program. Free File allows taxpayers with an Adjusted Gross Income (AGI) of $52,000 or less in 2006 to e-file their federal tax returns for free. That means 70 percent of all taxpayers - 95 million taxpayers - can take advantage of the Free File program"

8986,00.html

I'm with you! I can file my State e-file (Virginia) but not Fed because I make too much! One of the reasons I have that level of income as a retiree is that I don't spend money on items like this, NOT my pension. It pains me because in the 'grand scheme' it's costing us all but the effect on ME is what I take into consideration in this case.

The IRS does not have a system in place to accept e-files directly from taxpayers. Tax professionals have to pay to get set up in the system with the IRS, plus pay for the software to send the returns, so they charge for efiling. To adjust for this, anyone with income less than $52,000 can file electronically for free if they go through the IRS website to link to the providers offering this service. I guess the IRS presumes anyone making more money than that can afford to pay for efiling service. Dennis

There are lots of free efiling options if your income isn't too high...

8986,00.html And there are cheap services as well. I used to use which was just ten bucks to efile federal and state.

-- John D. Goulden

snipped-for-privacy@DELETETHISverizon.net (Ray) posted:

Yes, and the IRS strongly encourages e-filing. And it's my clear understanding that

includes a link for free e-filing of federal returns, although it is income-limited. I've never personally tried it, but the link is there, and you could pursue it -- to the point that you determine whether you've exceeded the income limit, whatever that is.

Apparently not, though the income-limitation may be a concession to their interests. Also, I'm a TaxAide volunteer preparer, and we provide free tax prep, including e-filing. The IRS actively supports us, through subsidies, training and provision of forms and computers (including software). Bill

Well, anybody can efile Federal and State tax forms by using the free link on my website.

Christopher Mewhort, EA, CGA

You betchyer sweet patootie they are.

On the other hand, if you were going to get your return to the IRS as quickly as possible in hardcopy format, you'd send it via overnight express, in which case it would cost you plenty more than just $0.37.

Dang! Wish I had known that before.

You planning on doing that again next year?

-- ============================================================Ian Pilcher snipped-for-privacy@gmail.com ============================================================

I don't understand. The site says the cost is $0 but then you list the credit cards you accept. is this a bait-and-switch? If this is a commercial venture I thought such messages were not allowed in this group.

-- Vic Roberts Replace xxx with vdr in e-mail address.

Moderator: They are not. I usually check. I did not check this one. I will adjust my filter to prvent reoccurence.

I fully agree about the principal. Since e-file is supposed to save the government money, they can find a way to allow all taxpayers to e-file for no additional charge.

YES! The current rule is that the government is not supposed to provide any service that CAN be provided by private industry.

-- Vic Roberts Replace xxx with vdr in e-mail address.

My feelings exactly. This year TurboTax is charging $14.95 EACH to e-file. No way will I pay that. The IRS can find ways to offer free service to simple low income returns but they will continue to receive my large complicated paper package by mail until I receive the same treatment. One would think that they would benefit the most by having tax payers like me with complicated returns e-file. To me, it makes little difference. It take me no longer to print my return and stuff it into an mailer than it takes to e-file (just a click of a different button). I have to travel to the post office everyday anyway.

--

-Ernie-

Well I am sorry that I did not explain more fully. I use Drake software. One of the "extras" that Drake supplies to its users is a on-line web interface where clients can prepare and efile their tax returns. When a Drake user signs up for this "extra", the user sets the price for the return. The client pays by credit card. Drake takes a cut and sends the rest to the preparer. After some thought, I set my price to $0. So a user on my site has to accept the price of $0 :-) It is as low as I can go. Christopher Mewhort, EA, CGA

Yes.

Christopher Mewhort, EA, CGA

It's mostly a zero-sum game. The primary reason the IRS saves money is because intermediaries (the electronic return originators) absorb (or pass on) most of the cost of maintaining 24-by-7, high-volume, secure system. Anyone who has ever worked in the IT industry can tell you the cost for such systems is quite significant. If the IRS were to directly accept e-file returns from all individuals, the cost would still be passed along to you, the taxpayer, in the form of higher taxes (or equivalently, greater budget deficits). You can easily guess whether the IRS would be able to maintain the same level of efficiency that competing private firms currently provide. The only true economic advantage I can see is the the avoidance of duplicate key-punching -- once when you type (or scribble) your data, and again when the IRS re-keys it from paper. Once upon a time there was a PC-1040 form which provided a machine-scannable paper version of your return, the best of both worlds (key punch once and avoid the high overhead of e-filing). Alas, it is gone now, however California for one still has machine-scannable data on the front page of the paper form.

-Mark Bole

Thanks to all for the responses to my original post. I suspect the day will come when the IRS will insist taxpayers to e-file, and those who don't might face a penalty. I don't see how the IRS could justify passing an e-filing fee, because it saves them money. I don't think Congress would permit it. By the way, I'm involved in a pro bono program which processes tax returns for low-income people. We e-file, for free, using some IRS-approved software program. We get some sort of IRS licensing based on a day-long training session. The idea is to use the Earned Income Credit and the Child Care Credit and get them their money due as quickly as possible. We want to keep them out of the clutches of these store-front preparation outfits. What we can't offer, of course, is instant refund, which is essentially a no-risk short-term loan at exorbitant rates. Many of our people are so desperate that they will pay maybe $200 out of a $2,000 refund just to get the money 10 days earlier. This has been a real education, learning how people on the margins manage to survive. But we don't even see the lowest on the economic totem pole -- those who have no income at all. Moderator: Never presume that an Act of Congress is based on malice if it can be easily explained as inefficient, ineffective, and/or outright dumb.

I think you are placing the blame partly on the wrong shoulders. Congress is the one pushing IRS to encourage e-filing. The goal to have 80% of returns e-filed was mandated by Congress (IRS' Restructuring and Reform Act of

1998). From various comments of IRS officials, e-filing only saves IRS a couple dollars a return. So it is a real mystery why Congress is so hot to increase it. If IRS writes the software to allow free e-filing I wouldn't be surprised to find it cost them more than it saves them.

-- Drew Edmundson, CPA Cary, NC

"For fiscal year 1999, a recent IRS costing determined the agency spent approximately $530 million to process 125.1 million individual tax returns. Using the IRS figures, it cost $4.28 to process each paper return and $4.14 to process each electronically filed return. "

So the maximum savings is less than $5.00 a return and the quoted savings is 14 cents. Hardly enough to justify any effort on the government's part. It doesn't even seem it is worth it for IRS to promote e-filing at all. Congress needs to find another way to balance the budget.

-- Drew Edmundson, CPA Cary, NC