The Internal Revenue Service said its electronic filing program has reached a major milestone, passing the 1 billion mark for individual tax returns processed safely and securely since 1986.

Doug Shulman

The IRS electronic filing program started as a pilot project in 1986 and became available nationally in 1990. Prior to the April 18 deadline, IRS e-file passed another high point as more than 100 million individual tax returns were e-filed during the 2011 filing season. The program received extra impetus this past tax season because of an e-file mandate that required most paid tax preparers to use electronic filing.

“IRS e-file is a good deal for taxpayers,” said IRS Commissioner Doug Shulman in a statement. “The 1 billion milestone means e-file has delivered real services to taxpayers, including faster refunds and more accurate tax returns. And because an e-file return costs us 20 times less to process than a paper return, this program means a more efficient government that has saved America’s taxpayers hundreds of millions of dollars.”

IRS e-file is an electronic transmission system that sends tax returns to IRS processing centers. Taxpayers can e-file through their tax preparers, through commercial software they use to prepare their own returns or through Free File, the free tax software and e-file program offered through IRS.gov.

Congress originally set an 80 percent goal for the electronic filing of federal tax and information returns back in 1998. E-file is now very close to that mark. Currently, more than 79 percent of taxpayers have used e-file to submit their tax returns so far this year.

In 2009, Congress passed another provision requiring tax preparers who file 10 or more tax returns to use e-file. IRS e-file has been steadily growing, but the new law, which the IRS is phasing in, brought a surge of e-filed returns for 2011. For this year, tax preparers who filed 100 or more returns were required to e-file.

For 2012, tax preparers who file 11 or more returns will be required to e-file. The requirement should put the IRS within reach of its goal of 80 percent e-file rate for individual tax returns.