Schumer To Demand IRS Allow Free Electronic Filing For Everyone By Next Tax Day - Reveals Upstate NY'ers Paid Nearly $22 Million In E-Filing Fees This
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Schumer To Demand IRS Allow Free Electronic Filing For Everyone By Next Tax Day - Reveals Upstate NY'ers Paid Nearly $22 Million In E-Filing Fees This Year
With online tax filing fast becoming the easiest way for people to pay their taxes online - Senator Schumer today will blast the IRS for charging a fee that eases the financial burden on them instead of the taxpayer. In Upstate New York 3.7 million people will file taxes this year and 1.5 million will file online - costing them 21.6 million dollars - all while saving the IRS money. Schumer today called for the IRS to make efiling free by next year and unveiled a bill that would mandate this effort.
"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 e-filing. While processing each paper return costs $2.65, an e-filed return costs only $0.29. From Upstate New York E-filing alone this year, the IRS will save over $5 million dollars. E-filing 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 self-prepared 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, 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. Everyone else has to pay to e-file by going through an outside vendor - either software or a paid preparer - even though the system saves the government money. Even those who qualify for free filing must go through an incredibly complicated system to file this way and even then, they are pushed into buying other services for additional fees.
Below is how the numbers break out across upstate New York:
The IRS fee will cost the 200,106 Capital Region taxpayers who filed online $2,782,174 while saving the IRS $652,181.
The IRS fee will cost the 192,975 Central New York taxpayers who filed online $2,683,028 while saving the IRS $523,488.
The IRS fee will cost the 258,092 Finger Lakes Region taxpayers who filed online $3,588,382 while saving the IRS $719,193.
The IRS fee will cost the 357,612 Hudson Valley taxpayers who filed online $4,972,058 while saving the IRS $1,660,543.
The IRS fee will cost the 107,587 North Country taxpayers who filed online $1,495,836 while saving the IRS $300,482.
The IRS fee will cost the 133,197 Southern Tier taxpayers who filed online $1,851,904 while saving the IRS $339,668.
The IRS fee will cost the 307,730 Western New York taxpayers who filed online $4,278,524 while saving the IRS $863,333.
"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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