IRS E-Filing History

2011 marks the 25th year in which the IRS allowed electronically filled individual tax returns to be filed. Below is a short summary of key events over the past 25 years that has allowed the IRS to now process more than 100 million tax returns in a year.

1986: Initial filing season pilot with only 5 tax preparers in 3 cities; 25,000 returns were filed. The program could only accept simple returns that were due a refund.

1987: Pilot expanded to 7 cities; 78,000 returns filed. Direct Deposit was added as a benefit.

1988: Pilot expanded to 16 IRS districts; 583,000 returns filed. The Form 1065 (partnerships) and Form 1041 (trusts) are added to the e-file list.

1989: Pilot expands to 36 states; 1.1 million returns filed.

1990: E-File expands nationwide; 4.2 million returns filed.

1992: Telefile pilot debuts for 1040-EZ filers to e-file via telephone. The IRS begins to accept individual tax returns where tax is owed and checks can be mailed via paper voucher.

1998: Congress passes IRS RRA 98 containing a provision setting a goal of an 80 percent e-file rate for “all federal tax and information returns.”

1999: Electronic payments through credit cards or direct debit introduced; IRS pilots alternative programs to allow taxpayers to sign returns electronically instead of mailing a signature form.

2002: IRS allows taxpayers to sign e-file returns using a Personal Identification Number (PIN) which made the e-file process entirely paperless.

2003: Free File debuts; IRS partners with Free File Alliance, a consortium of tax software companies, to make free tax preparation software and free e-file available to most individual tax payers. In a major step for businesses, e-file is expanded to the quarterly Form 941 for employment taxes and the annual Form 944 for small businesses.

2004: Modernized e-File (MeF), the next generation of IRS e-file, makes its debut, accepting business and information returns such as the Forms 1120, 1120-S and 990 series.

2005: E-filed returns cross the 50 percent threshold; 68.4 million returns filed. Telefile ends after years of declining use as users migrated to tax software and e-file.

2006: MeF becomes mandatory for businesses and exempt organizations with assets of $50 million or more.

2007: MeF threshold for businesses and exempt organizations lowered to assets of $10 million or more.

2009: Congress passes a provision requiring tax preparers who file more than 10 individual tax returns to file electronically; IRS phases in the requirement, setting the threshold at 100 or more for 2011 and 11 or more for 2012.

2010: MeF begins a roll out for the Form 1040 series and 23 related forms which will take three or more years to make all the related forms available; IRS stops mailing paper Form 1040 packages.

2011: E-filed returns cross the 100 million threshold in one filing season; cumulative total exceeded 1 billion returns. Approximately three out of every four individual tax returns were filed electronically.

If you would like more details, please do not hesitate to call our office. Our office has been successful in helping taxpayers with IRS and IDOR collection problems for over 19 years. Please call our office and ask for Brittany at (847) 705-7555 to talk to one of our attorneys in the tax practice group and find out how we can help your client in front of IRS collections.