RICK TELBERG'S INSIDER: 'Tis the Season to Go Electronic
Feb. 12, 2001 (SmartPros) — If the IRS has its way, 42 million of the nation's 130 million 1040s will be filed electronically this year. It wasn't long ago that tax professionals railed at the idea of electronic filing. Today, it's a fact of life. And some of the credit must go to the IRS itself, for listening, changing, and persisting.
Terry Lutes, the new e-filing guru at the IRS, admits to SmartPros in an exclusive audio interview that the toughest job may be convincing the public e-filing is easy, safe, and may actually reduce their chance of an audit.
"It's a more accurate transaction," he says. "Which means that taxpayers are much less likely to hear from the IRS with a notice." It also means they could get their refund in as little as 14 days. And with the new e-signature and electronic funds transfer systems in place, balance-due taxpayers can file-now-pay-later -- April 16, automatically.
But there's a lot more happening on the digital front this tax season that signals bigger changes ahead.
For instance, Fidelity Investments, the huge mutual funds house, said that within the first three weeks of tax season, 34 percent of their new individual retirement accounts were opened online, "paper-free." That's up from 7 percent last tax season.
H&R Block, which handles more returns than anyone, has teamed for the season with EXP Inc., a Web-based referral network of experts so that Block customers can click a button at www.hrblock.com to "Ask a Tax Advisor," an actual living person in real-time. Chief executive Mark Ernst observed it "breaks down the barriers between retail and online services."
In Dallas, H.D. Vest is reprising its free tax prep program, which was second last year only to Intuit's TurboTax in number of tax returns filed online. This year, with www.myHDVest.com, the company is positioning itself even more intimately with its customers and sales reps.
At e1040.com, operated by Gilman + Ciocia, prospects are being pitched with the come-on of getting their refund anticipation checks in as little as 48 hours. They call it Click N' Refund, and it is designed to also help walk-in traffic at the chain's 145 offices in 17 states.
This tax season could be remembered in the future as the year in which the walls between the worlds of click-and-links and bricks-and-mortar began to crumble.
