New & Improved

Electric Avenues

The IRS also hopes to encourage more taxpayers to file their tax returns electronically. Although there is still some paperwork involved (taxpayers have to sign and mail a Form 8453-OL, which authenticates the electronic transmission, and mail W-2 forms and other supporting documents), electronic filing is expected to help speed the agency's work and lower the chances of error. The 18 percent error rate on paper tax filings falls to less than 1 percent on electronic returns. Filing electronically also means faster refunds. The IRS says taxpayers usually receive their refunds within 21 days if they file electronically--half the time it takes with the traditional filing method.

Eventually, all businesses will be encouraged to file electronically. Vice President Gore recently announced the creation of a special 10-to-12-member advisory group to help plan a strategy for making paperless filing the most convenient method of filing tax returns. The agency is looking for advisory group member nominations from private and public interest groups such as employers, tax software developers, small and large businesses, and individual taxpayers.

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This article was originally published in the July 1998 print edition of Entrepreneur with the headline: New & Improved.

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