IRS reaches deal to offer free e-filing

The Internal Revenue Service and a consortium of private-sector firms have reached a deal that will enable approximately 78 million Americans to electronically file their taxes on the Internet free of charge.

Under the proposed agreement, announced by the Treasury Department and Office of Management and Budget, a group of firms including American Express, AT&T and H&R Block will collaborate to enable citizens to file taxes online free of charge at an IRS Web portal.

However, the system applies to 60 percent or more of taxpayers who meet certain qualifications. Treasury will post those criteria in the Federal Register at a later date.

Federal officials seek to have the system up and running by year's end for the 2003 tax-filing season.

The new system fulfills one of President Bush's 24 e-government mandates, and it is designed to increase the speed with which taxpayers receive their refunds.