Mass. seeks to get all taxpayers to file returns online
With the ranks of users dwindling to 6%, state revenue officials try for hefty savings by prodding everyone to file electronically
This tax season, it’s the rare filer who still fills out a paper form by hand. But not rare enough, in the view of the state Department of Revenue.
State tax collectors want to gently shove that remaining 6 percent of pencil-and-paper-loving taxpayers from the 20th century into the electronic age. “My goal is to have nobody file on paper,” said Department of Revenue Commissioner Amy Pitter.
For starters, the agency hopes to stop automatically mailing blank tax forms to paper filers as early as next year. Paper holdouts would have to make a special request, or download forms from the agency’s website.
And there is the power of persuasion — plus guilt.
“C’mon admit it — filing paper tax returns is a hassle!” declares a full-page entreaty in the state tax booklet. “So forget about paper . . . about mistakes, stress, and longer refund wait times. E-file this year!”
Revenue officials also point to the many trees killed every year to produce all the paper forms that are filed, copied electronically, and eventually shredded — not to mention the thousands of additional forms that are distributed, but never used. “Just from an environmental perspective, it’s awful,” Pitter said.
The main reason to encourage electronic filing, of course, is money. It costs the state nearly $1 million a year to print, distribute, store, and process paper tax forms, an expense state officials would dearly love to eliminate. The IRS, which stopped automatically mailing out 1040s in 2011, estimates it costs 15 cents to process an electronic return, compared with $3.50 for a paper filing.
The vast majority of taxpayers file electronically, through paid tax preparers or popular tax software, such as Intuit’s TurboTax. But many — including more than 200,000 who filed in Massachusetts alone last year — prefer to carefully fill out paper forms by hand.
Heather Hughes, 32, of Somerville, is one of them. She said she still uses the traditional forms because she doesn’t have complicated deductions. And she doesn’t want to spend money on an accountant or computer programs. “Neither my income nor my return justifies paying someone or paying for software,” Hughes said.
Hughes said she knows the state offers a free Web tool, but she would need a separate program to do federal returns. It just seems a lot simpler to stick with paper and copy the figures from one form to another and check the math, she said.
Pitter said she wasn’t concerned about people who use tax software to prepare their returns, print them out, and mail them because those returns typically have bar codes that make them easy to scan into the agency’s computer system and process electronically. She added that tax preparation software does the math, so it eliminates most mistakes spotted on paper returns (though ideally she’d love these taxpayers to file the returns online, too).
But some taxpayers say they have run into problems making the switch. Wayne MacDonald, 54, of Boston, said he tried to file his taxes online this year in hopes of receiving a faster refund. But he quickly became frustrated with one of the free online tools he found through the IRS website.
MacDonald said it required him to enter every number from the W-2 he received from his employer, something he was able to avoid with paper forms by simply attaching the W-2. And when he belatedly discovered a typo, he said he had to start the process over, wasting more than a half hour.
So instead of trying again, he headed to the Boston Public Library in Copley Square Wednesday morning to pick up the paper forms.
The paper form “is definitely easier,” said MacDonald, scooping the forms out of a bin. “I am not exactly great with the computer and Internet.”
Employees at the Boston Public Library said people come in to pick up paper tax forms nearly every day, especially on weekends early in the filing season. Last year, the library distributed more than 20,000 basic IRS forms.
Recently, John Devine, a reference librarian, was emptying a box of blank tax forms into plastic bins in the lobby. Even though the state has long offered electronic filing, he still goes through a box of 60 paper forms every couple days.
“It amazes me,” Devine said.
Some observers suspect the drive toward electronic filing could push many seniors or low-income residents who don’t own computers to turn to volunteers who help people prepare returns at libraries and community centers.
But even some of those programs favor paper. Community Tax Aid of Boston, a nonprofit that helps low-income taxpayers prepare their returns, uses paper returns at four of the five sites where it offers its services.
“We’ve discussed moving to TurboTax and probably will eventually, but then you have the problem of needing Internet access and printers,” said Michaele Morrow, a Northeastern University accounting professor who helps coordinate the Community Tax Aid program.
Neither the state nor the IRS has plans to eliminate the paper forms — at least for now. But finding the forms is going to get tougher as the tax agencies not only stop mailing them, but also deliver fewer forms to fewer libraries, community centers, and other locations.
“It won’t be impossible” to fill out a paper tax form, said Pitter the state revenue commissioner, “but we are going to try to keep it so you do it only if you really, really want to.”