Mandate from IRS Restructuring and Reform Act 1998 ... IR

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IRS e-file How Goes the Revolution?

• 1999 Federation of Tax Administrators
• Technology Conference

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Support for the ETA Revolution is Well Established

• Mandate from IRS Restructuring and Reform Act
  1998
• Existence of ETA Strategy for Growth document
• Guidance from Electronic Tax Administration
  Advisory Council (ETAAC)
• Existence of untapped market opportunities

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ETA Volumes Continue to Rise (as of August 6,
1999)
1999
1998
Practitioner e-file 17.65
21.16 On-Line Filing 0.94
2.44 TeleFile 5.96 5.66 Total e-file
(millions) 24.54 29.26 Federal/State
e-file (no-add) 6.09 8.33 Million WWW
Downloads 44.83 63.10 EFTPS payments
in billions 849.38 1,004.13
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Untapped Market Opportunities to Increase
Electronic Filing Abound

• Only
• 1 in 4 taxpayers electronically files
• 1 in 3 are tax preparer clients
• 45 are registered EROs
• 30 of tax preparers are active EROs

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Untapped Market Opportunities to Increase
Electronic Filing Abound - Contd.

• Yet
• 1998 - More than 45 Million U.S. households have
  personal computers
• 1998 More than 80 million individuals used some
  form of internet application to date
• By 2000 - 10-16 million will be banking on-line
• Credit and debit cards are pervasive
• Top 40,000 corporations regularly transact
  electronically

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Strategies for Success Include Program
Improvements and Incentives

• Continue with efforts to
• Add new forms/schedules
• Enhance existing electronic filing and payment
  programs
• Focus, improve and expand marketing efforts
• Improve incentives and services for Authorized
  IRS e-file Providers
• ETA Modernization is underway
• Expand partnerships with private sector

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New Forms and Schedules Will Be Available in 2000

• Schedule J, Farm Income Averaging
• Form 8271, Investor Reporting of Tax Shelter
  Registration Number
• Form 8582-CR, Passive Activity Gains
• Form 6781, Gains and Losses from Section 1256,
  Contracts and Straddles
• Form 8586, Low Income Housing Credit

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Authentication Pilots are Replacing the Form 8453

• Uses worksheet built into practitioner software
  that is completed and printed to contain
• - Pen ink signature to certify figures on
  e- file return
• - One-time use PIN
• Taxpayer signs return using self-selected PIN
• ERO signs return using self-selected PIN
• ERO retains worksheet - No Form 8453 to mail
• IRS sends out e-file customer numbers to users of
  PC tax preparation software users

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Paperless Payment Pilots Will Impact How
Taxpayers Pay Balances Due

• Use of Credit Cards - Pay by Phone
• - Use Discover Card, MasterCard, or American
  Express
• - File and Pay
• - Discover Financial Services in Partnership
  with Intuit
• Use of Direct Debit - Available only to
  taxpayers filing electronically

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Volumes for ETA Pilots Off to a Good Start

• On-line e-file Customer Number (ECN) Pilot-
  655,000 taxpayers took advantage of ECNs
• Practitioner PIN Pilot- Almost 500,000 returns
  e-filed using self-selected PINs
• Credit Card Pilot- Over 53,000 payments
  processed totaling over 183 million
• Direct Debit Pilot- Approximately 75,000
  payments processed totaling 139 million

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ETA Marketing Continues to Mature

• ETAs marketing budget increased as follows
• - 1998 5 Million
• - 1999 8 Million
• - 2000 13 Million (proposed)
• ETA marketing supported by Madison Avenue
  advertising firm and private sector research
  firms
• - Individual and business marketing strategies
  for 2000 under development
• - Multi-year strategy (beyond 2000) under
  development

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Preview of ETA MarketingCampaign for the 2000
Season

• Emphasize ERO and on-line filing channels
• Target Upscale Technology Advanced and
• Pressured Tech Users
• Expand paid placement on
• Cable TV News
• Weekly National Publications
• Internet Banner Ads
• Build on existing major messages
• Improve consistency among placements
• Create Fed/State IRS e-file logo for states
• Promote free e-file offerings

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Future e-services Based on e-file History and
Performance

• High quality IRS e-file participation may entitle
  partners to
• Market research for your area
• Distribution Channel Management incentives
• - Recognizes differences amongst channels and
  rewards good distributors through incentives
  and service offerings
• Account Management services
• - National accounts
• - Field-based accounts
• - Customer Service Representatives focusing on
  your needs

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ETA Modernization Efforts of Today Will Pay Off
Tomorrow

• Starting in 2001
• Up-to-date authentication capabilities to support
  electronic filing, payments, and communications
• Secure infrastructure for transactional
  Internet business applications
• First transactional self-service applications for
  taxpayers on the Internet
• New business functionality to complement IRSs
  legacy capabilities and to leverage new security
  infrastructure

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Lets Review!

• Electronic Tax Administration - Wave of future
  for you and the public
• Program enhancements, ETA modernization, and
  integrated marketing efforts continue
• Due to expanded services, active EROs will have
  competitive edge over paper filing practitioners
• Partnerships with the public and private sector
  are key to success
• Opportunities abound!
• Join the revolution!

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Visit the IRS Web Site For More Information on
ETA Programs

• ETA Strategy for Growth DocumentIRS Digital
  Daily www.irs.ustreas.gov/prod/elec_svs/eta-pla
  n.html
• Practitioner PIN Pilot IRS Digital Daily
  http//www.irs.ustreas.gov/prod/elec_svs/psigpilot
  .htmlIRS Procurement web site
  http//208.197.188.3/opportun.htm
• Paperless Payment Pilot IRS Digital Daily
  http//www.irs.ustreas.gov/prod/elec_svs/e-paymnt
  .html

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Visit the IRS Web Site For More Information on
ETA Programs - Contd.

• IRS e-file Application Digital Daily
  http//www.irs.ustreas.gov/prod/elec_svs/efile-app
  .html
• ETA Requests for AgreementsIRS Procurement web
  site http//208.197.188.3/opportun.htm
• Authorized IRS e-file Provider DatabaseDigital
  Daily www.irs.ustreas.gov/prod/elec_svs/ero/indi
  v.html