Corporations and tax-exempt organizations for the first time have the option of filing their annual income tax and information returns electronically, the IRS said today.
Most corporations and tax-exempt organizations, who file forms 1120 and 990, have the option to transmit tax return data using a secure Internet connection instead of via modem.
Taxpayers and tax professionals can prepare the returns using IRS-approved software developed by one of several software companies.
The returns are then transmitted to IRS through a secure Internet site accessible only to registered users.
'The successful launch of this modernized e-file process means charitable organizations and most corporations can stop filing massive paper returns,' IRS commissioner Mark Everson said.
Error messages are sent quickly and are easier to understand.
Returns are processed upon receipt.
An IRS return message lets tax professionals know the return has been filed.
The IRS' goal is to replace outdated, proprietary technology with an industry standard process that uses Extensible Markup Language, agency officials said. This is the first XML application the IRS has used for tax returns submitted via the Internet.
So far, the IRS has made 59 forms for corporate and tax-exempt filers available for e-filing returns. More than 95 percent of corporations are able to file electronically, and all corporations will be able to when another 43 forms and schedules are released later this year. More than two-thirds of exempt organizations can file electronically now, and an additional 244,000 will be able to file other types of returns by next year.