Research Confirms Electronic Filing is a
Popular Alternative

Recent research confirms that electronic tax return filing has become a popular option for more than seven million U.S. taxpayers. This research also confirms that about 75 percent of the persons filing electronically are under the age of 45 and 62 percent have income under $30,000.

The finding that taxpayers embrace alternative methods of filing traditional paper tax returns is important for the Internal Revenue Service, which plans to test other filing alternatives in 1992. These alternatives include testing the filing of tax returns by telephone in Ohio.

The research report on electronic filers is one of eleven reports in the 1991 update of Publication 1500, The IRS Research Bulletin -- formerly call Trends Analyses and Related Statistics. The IRS Research Bulletin presents recent IRS research findings and operational developments in tax administration.

Another report in the publication focuses on the effect of new laws on taxpayers claiming child care credits and reporting child care income. Beginning with 1989 returns, taxpayers claiming the child care credit were required to report the name and taxpayer identification number of the child care provider. According to the report, the number of tax returns claiming the child care credit declined from 8.7 million in 1988 to 6.0 million in 1989 -- a decrease of 31 percent -- resulting in more than $1.2 billion in additional tax. The number of taxpayers reporting income received for providing child care services increased from 261,000 in 1988 to 430,000 in 1989, an increase of almost 65 percent, resulting in $343 million in additional income and self employment taxes.

The IRS Research Bulletin provides a forum for sharing information relevant to tax administration but does not necessarily reflect official positions.

The IRS Research Bulletin, Publication 1500, can be purchased for $8.50 from the Superintendent of Documents, U.S. Government Printing Office, Washington, DC, 20402

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