Due to a decline in use and increasing costs, the Internal Revenue Service is discontinuing its TeleFile program.

The agency will shut down TeleFile, which allows taxpayers to file certain forms by telephone, after Aug. 16, 2005.

An IRS announcement said that a decline in use for most forms, coupled with increasing costs to maintain the system, led to the decision.

TeleFile rolled out nationally in 1997 for single Form 1040EZ filers, and was later expanded to allow the filing of selected Forms 1040EZ, Forms 941 and 4868, and individual tax returns for eight states.

"Despite its initial success, the program has since experienced a decline in use for most forms as other electronic filing alternatives have become available. This, coupled with increasing costs to maintain the TeleFile infrastructure, led the IRS to decide to discontinue the program," an announcement issued by the agency said.

Taxpayers will be able to TeleFile Form 941 second-quarter returns through July 31. Taxpayers who have electronically paid all taxes due by July 31 are granted an extension to TeleFile through Aug. 10 (Aug. 11 in Hawaii). Taxpayers can use TeleFile for Form 1040EZ through Aug. 15.

The IRS said that electronic filing alternatives are available on its Web site, www.irs.gov.

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