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Add Taxes To Things To Do on Web

June 26, 1998

NEW YORK (AP) _ To the growing list of financial tasks that can be accomplished on the Internet, now add probably the most onerous of the bunch: filing a tax return.

Taxpayers have been able to file their returns electronically since 1986, and in the early years, that meant mostly by touch-tone telephone.

Then it meant using tax-preparation software like Intuit Inc.’s TurboTax or Kiplinger’s Tax Cut to prepare a written return that was mailed to the Internal Revenue Service.

Last year, TurboTax ran a pilot program in which taxpayers could file using their personal computers, but only if they used the simplest form, the 10EZ. The newest twist, instituted this year, was filing more complicated forms through the tax preparer’s Internet Web site.

Intuit won’t say how many people used this option this year, but said 80 percent of all people who used TurboTax filed electronically.

William Harris, Intuit’s income chief executive, said ``a few hundred thousand people″ filed through Quicken’s site this year, and that number is going to ``grow like a hockey stick.″

The IRS said about 925,000 individual tax returns were filed from home computers, but that included those filed by tax preparers.

For Aaron Galit, who teaches computers at a middle school in New York City, filing on the Web was a cinch.

``I’m very computer savvy, so for me, it was great,″ he said. ``It was kind of like somebody asking me questions that I already knew the answers to, and then putting it all together for me.″

This year, users of the deluxe version of TurboTax were offered a rebate for one free electronically filed return. The regular version charges a $9.95 fee. Tax Cut offers free filing with all versions.

Tax filers are rapidly losing their fears of mishaps or loss of privacy and have become increasingly willing to let their computers do the drudge work.

``All of the sudden, consumers are getting comfortable doing financial work electronically,″ Harris said.

Electronic filing has the blessing of the IRS, said spokesman Don Roberts, because it is cheaper and faster than paper returns both for the federal agency and for individuals waiting for tax refunds.

And it is extremely accurate. A mere one-tenth of one percent of electronically filed returns for 1997 contained errors, compared with 10 percent to 15 percent for paper returns.

The reason for that, Roberts said, is that filings through the IRS Web site, as well as those filed with the aid of tax-preparation software programs, ferret out mistakes and demand that the user correct them before the filing is completed.

The IRS will e-mail the filer within 24 hours saying the return has been accepted. The filer must then send through the U.S. mail a signed tax form and a check, if they owe the IRS money.

Eventually, people will be able to pay by credit or debit card, but that service won’t be available for a few years, Roberts said.

Out of 115 million individual filings for the 1997 tax year nearly 25 percent were filed electronically, either by computer or phone, including those filed by tax preparers like H&R Block Co.

Anxious to maintain its vast market lead in personal finance technology, Intuit is developing ways to allow people to keep their books all year with Quicken, its personal finance software package, and then upload the data at tax time to an Intuit Web site. For a fee, Intuit will crunch the numbers and file the return.

And someday, it will get even easier, Harris said. Instead of transferring a year’s worth of data at tax time, consumers will be able to enter their Quicken financial records directly on to the Intuit Web site throughout the year, then pull it up at tax time and file.

Filers can go directly into the IRS Web site at www.irs.ustreas.gov, and get links to electronic tax preparers, or through the www.quicken.com, which has a link directly to IRS site.

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