The Internal Revenue Service is not ready to retire the legacy e-file system. The e-file system became operational nationwide in 1990 and transformed the way taxes were filed. The e-file has proven in its time to be win-win for everyone. The taxpayers get their refunds by as fast as 10 days. Or, they have payment options to file now and pay later. The e-file returns are also very accurate. They have an error rate of 1% compared to 20% for a paper return.
The next phase for the IRS filing system is the Modernized e-File (MeF) System. The MeF will send acknowledgments out in minutes opposed to 48 hours. The IRS had planned to replace the legacy e-file with the MeF after the 2012 filing season. However, there seems to be some reported problems with the MeF and they will need to be corrected before this new system can be implemented.
A first report of MeF found that the system has difficulty processing large volumes of tax returns for extended period of time. It is a concern that performance issues with the MeF may affect the systems reliability. The IRS does not want to develop a retirement plan for the legacy e-file until all the glitches in the MeF has been resolved.
“The Modernized e-File is a part of the initiative by the IRS to meet the needs of the taxpayers, reduce taxpayer burden, and broaden the use of electronic interaction.” Said Treasury Inspector General for Tax Administration, J. Russell George. “ However, due to problems we identified, it will be necessary to demonstrate the system’s ability to process all returns filed electronically for an entire season before the Legacy e-file system can be completely retired.”
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