Thursday, Nov. 15
Posted 2 p.m. EDT
Most of us now file our tax returns electronically. And if a new IRS plan pans out, by next summer we also could be going online to check our personal tax accounts.
At the annual conference this month of the Council for Electronic Revenue Communication Advancement, or CERCA, David R. Williams said the IRS is working on a Web program, tentatively named "My IRS Account," that will allow taxpayers to view three years of prior tax information.
Williams should know. He's the director of the IRS Office of Electronic Tax Administration.
The tax industry publication Tax Notes reports that at the CERCA conference, Williams asked the audience, "Wouldn't it be nice if your W-2 was there as well? How about changing your address or updating your information?"
I wasn't there so I don't know what the group's response was, but mine is, "It's about time!"
In another report on the annual get-together, this one in the online version of Federal Computer Week, a second IRS official said the agency is looking to model the system after existing online self-service applications similar to those used with online banking.
That's the key point. The wheel to move electronic financial transactions is already out there. All the IRS needs to do is stick the agency's administrative chassis over it and drive.
Of course, this is the federal government we're talking about. And an agency that rightfully gets a lot of attention. So I'll grant them some time to make sure their online security applications for electronic tax account access are up to snuff.
That's why Williams cautioned, if I can borrow a phrase, against irrational exuberance in celebrating this coming e-tax option.
"We want to make sure that when taxpayers and users actually come to us, this is useful information and they know how to get to it," he said. "We also have to figure out what is it that taxpayers want first. We can't do it all at once, so what are the top priorities?"
Gathering such information and implementing it, he said, will take time. So while summer 2008 is the target goal, it could slip.
Will it satisfy Senators? It's a good bet that members of the Senate Finance Committee are among those who will be happy to see such an IRS electronic option.
For a while now, federal lawmakers have been pushing for direct return filing via an IRS Web portal that would offer free filing for all taxpayers. They're not happy with the current Free File system and its restrictions, as indicated in the Senate Finance Committee's June release reacting to reports of accuracy problems with the system.
You can read more about the 2007 version of Free File and its limitations in this Bankrate story.
Making taxpayer accounts available online could -- maybe, perhaps, we hope -- be the first step toward opening up the program completely and under the full control of the IRS, rather than via the current public-private partnership.