Washington (Nov. 11, 2002) -- State taxing bodies have voiced concern that the Internal Revenue Service may be harming their e-file programs in its efforts to promote free e-filing at the federal level.

Federation of Tax Administrators executive director Harley Duncan said at the fall meeting of the Council for Electronic Revenue Communication Advancement (CERCA) that the federal program "has the potential to drop taxpayers back into paper if it's not tied into free filing with the states."

Nonie Manion, director Taxpayer Services and Revenue Division, New York State Department of Taxation & Finance, agreed. "We won't bridge the digital divide if we have free filing at the federal level but not at the state level," she said. "We intend to invite vendor members of the consortium to make the same offer to our residents."

A consortium of private sector software vendors administered by CERCA have agreed to work together to offer free online tax preparation and filing, via links through the Internal Revenue Service Web site. The IRS will handle the marketing and public relations, while each member of the consortium will tailor its offering to a number of taxpayers which equals at least 10 percent of the number of individual tax returns filed in 2001.

-- Roger Russell

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