Electronic tax filing problems blamed on 'user error'

WASHINGTON (CNN) -- Confusion over new electronic filing procedures is being blamed for thousands of tax returns being rejected by the Internal Revenue Service.

Both the IRS and makers of computer tax filing software say a program that now allows taxpayers to use a personal identification number (PIN) as an electronic signature may have caused filers to submit incorrect or incomplete information.

The five-digit PIN number allows taxpayers to file totally paperless returns. In order to use the PIN system, taxpayers are required to provide tax figures from last year's return: the adjusted gross income and total tax. The IRS says many electronic filers using the PIN failed to provide this additional information.

MESSAGE BOARD Tax season   RESOURCE Tips for electronic tax filing     QUICKVOTE How do you plan to file your taxes this year? Electronically Traditional Snail Mail With an Accountant I don't plan to file View Results

Most electronic filers are not using the PIN system. They are required to mail a signed copy of their tax returns to the IRS for verification.

"The confusion lies in the taxpayer, with the information they are providing to the IRS," said Julie Miller of Intuit, makers of the Quicken TurboTax program. "This is not a product problem, or a system issue. It appears the problem is with customer re-education" of the new IRS PIN program.

Intuit reports rejections rates of about 20 percent for all its electronic filing, including those using the PIN system. The company reports increased calls to its customer support staff, but says much of that is due to its overall increase in people using the TurboTax program.

H&R Block reports a similar 20 percent rejection rates for self-preparers using Block's Kiplinger TaxCut computer program. Linda McDougal, Block spokesperson, reports no increase in rejection rates for electronic filers who hire Block tax preparers.

McDougal said a thorough review found no online or software problems that would cause tax returns to be rejected. She noted the company is working with the IRS to minimize problems

The IRS did not have a rejection rate for e-filed returns, but said electronic filing in general is more accurate than traditional paper returns.

The IRS expects 42 million electronic returns this year, or about 70 percent of total returns. Nearly 2.4 million people so far have e-filed from their personal computers. About 14.5 million have gone to tax preparers for computer filing.

Review: Web help at tax time
March 6, 2001
CNNdotCOM Tools: Tax help available online
February 24, 2001
Group to draft guidelines on cross-border e-commerce taxation
January 12, 2001
IRS online didn't tax patience in 2000
January 3, 2001

Internal Revenue Service
Intuit.com
H&R Block

Note: Pages will open in a new browser window

External sites are not endorsed by CNN Interactive.