Washington (March 5, 2004) -- E-filing is running more than 9 percent ahead of last year's pace and the number of taxpayers filing from their home computers has soared, according to the latest data from the Internal Revenue Service.

Overall, the IRS said the number of tax returns has increased 2.8 percent compared to last year. More than 33.5 million returns have been e-filed, about three million more than this time last year. Returns prepared and filed from home computers have jumped 23 percent.

Liberty Tax Service president John Hewitt attributes the increase in returns to a number of last year's non-filers coming back into the system. "There's no withholding on unemployment benefits, so people walk out of our office and say they'll wait till they get the money and come back. Every year there's 2 to 4 percent who don't come back, but get back into the system during the next year," Hewitt said. "This is exacerbated during a period of recession or high unemployment."

Returns filed through the IRS Free File program up are up more than 24 percent over last year, with more than 1.9 million returns filed through the program, a public-private partnership between the IRS and a consortium of tax software companies launched last year. In addition, the IRS noted that tax professionals have submitted more than 23 million e-filed returns, a 7.2 percent increase over last year. Direct deposit of refunds has climbed to nearly 28 million, a gain of 9.3 percent.

So far, the IRS said taxpayers have made about 9.8 million visits to the "Where's My Refund?" service through Feb. 29 -- almost twice as many as during the same period a year ago. The service, which debuted nearly two years ago, handled more than 18 million electronic inquiries in 2003.

-- Roger Russell

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