E-Filing: The IRS Wants You To, But It My Be Smart Not To

The IRS wants you to e-file. This we know. It cuts down on manpower for them since it automates much of the process and it gets returns in quicker. For you...

1. It’s easy. You can usually file a state tax return at the same time you electronically file your federal tax return.

2. It’s accurate. No more human errors because e-file checks for math errors and necessary information. This not only increases the accuracy of your return, but it also reduces the need for correspondence with the IRS to clarify errors or omissions.

3. No more second-guessing yourself. When you file electronically, the computer software or online program guides you through the process step-by-step.

4. You’ll get your refund faster. When you use e-file, you can get your refund in as little as ten days.

5. There are more payment options. With e-file, you can file your return early, but wait to pay any balance due by the April deadline. You can also pay electronically using a credit card, electronic funds withdrawal or in some cases the Electronic Federal Tax Payment System.

6. It’s fast. You don’t have to make a trip to the post office. In fact, you won’t even need to walk to the mailbox to send your return. Just click Send.

7. You’ll know the IRS received your return. The IRS will send you an electronic notification acknowledging receipt of your return.

8. You’ll have peace of mind. After clicking send and receiving your notification from the IRS that they received your return…kick back and relax – you’re done!


HOWEVER, you may want to rethink e-filing. It seems like a good deal for you, but it's actually a better deal for the IRS. Why?

1. By e-filing you're essentially giving the IRS more time to look over your return and potentially audit you. E-filing posts in 1o days. Paper returns post in 6-8 weeks. Basically, by e-filing you're giving the IRS an extra 2 months to audit you.

2. E-filing gives the IRS a much clearer picture of your tax return. This is because an e-file is fully inputted while a paper file only has key criteria entered into your master file. Why is more info bad? Because if something ever goes wrong, the IRS will have more info to argue against you with.

3. A paper return has documentation attached to act as proof, such as reasons why your charitable deductions are deductible and the amount is accurate. In e-filing, documentation is not always attached or may not make it to your file. In true government fashion, the IRS will usually choose the low hanging fruit, the easiest targets, the ones with the highest probability of not proving their case when choosing who to investigate. Do you want to be that person?

4. The IRS has significantly sped up the time it takes to receive a refund. In fact, if they are significantly late is paying a refund, they must pay interest on it. The difference between paper and e-file is usually 2-3 weeks. So, the argument that e-filing is a worth the risk since you get your money sooner is flawed.

5. Giving the IRS direct access to your banking info by e-filing and getting Direct Deposits only gives the IRS an easy source to levy if you get into trouble. If you change your bank account frequently, this shouldn't be an issue, but how often do you really do that?

So, why should you e-file? The only real reason is to lessen the government's expenses during the filing season. Other than that, I'd stay away from it.

To file your own taxes and get it right, see the following articles...

CPA?Software? E-File?

No W-2? No Problem

E-Filing Can Be Dangerous. Here's Why.

We're all aware that the IRS is pushing everyone to e-file. It's quicker and simpler for everyone involved. We know the positives. What are the minuses. Once again, I summarize content from IRSMind.

1. By e-filing you're essentially giving the IRS more time to look over your return and potentially audit you. E-filing posts in 1o days. Paper returns post in 6-8 weeks. Basically, by e-filing you're giving the IRS an extra 2 months to audit you.

2. E-filing gives the IRS a much clearer picture of your tax return. This is because an e-file is fully inputed while a paper file only has key criteria entered into your master file. Why is more info bad? Because if something ever goes wrong, the IRS will have more info to argue against you with.

3. A paper return has documentation attached to act as proof, such as reasons why your charitable deductions are deductible and the amount is accurate. In e-filing, documentation is not always attached or may not make it to your file. In true government fashion, the IRS will usually choose the low hanging fruit, the easiest targets, the ones with the highest probability of not proving their case when choosing who to investigate. Do you want to be that person?

4. The IRS has significantly sped up the time it takes to receive a refund. In fact, if they are significantly late is paying a refund, they must pay interest on it. The difference between paper and e-file is usually 2-3 weeks. So, the argument that e-filing is a worth the risk since you get your money sooner is flawed.

5. (Point added by yours truly) Giving the IRS direct access to your banking info by e-filing and getting Direct Deposits only gives the IRS an easy source to levy if you get into trouble. If you change your bank account frequently, this shouldn't be an issue, but how often do you really do that?

So, why should I e-file? The only real reason is to lessen the government's expenses during the filing season. Other than that, I'd stay away from it. See my earlier post for filing alternatives.

CPA? Software? E-File? WHAT'S A GIRL GOTTA DO TO GET FILED?!

So, it's that time of year again... TAX SEASON.... yay.

Naturally there are many choices for preparing your tax returns... CPA, tax prep firm, e-file, software. But what's the best?

Well, once again, it's all about choice, that is, your preference. Working for the tax industry I can tell you, because the experts have told me, that you should always get your return professionally prepared. The peace of mind of knowing you got it done right always outweighs the expense. However, you need to know who to go to, because although preparers are filing on your behalf, the IRS still sees you as solely responsible for what's on that return, including mistakes. Therefore, choosing the right preparer is key. I recommend Sharon Raines, and Pat Harker.

However, if you're hell bent on getting it done cheap, tax software may be the next best thing. Still, it depends on your return. If it's complex, a tax preparer may be the best way to go. On the other hand, if it's simple you may be wasting money on software when you could do it yourself through e-file. Sharon has a good article on finding the best tax preparation software and some good points to think about when choosing software over other options.

Last, but not least, is the cheapest option by far: IRS e-filing. (It's free. Can't beat that!) Although this option is only available to those who make under 54K, if you fall within this requirement, have a fairly simple return, and feel confident in filing it yourself, this may be your top choice. However, as usual with the IRS, there are further stipulations and specifics to e-file eligibility.

So, you have a decision to make. Again I'll stress getting your return prepared by a tax preparer. You do NOT want to get on the IRS' bad side by making a mistake. However, there are other options.

Additional Articles:

Which Tax Software is Best to Prepare Your 2007 Return?
IRS Free File- Who Can Do This?