Most taxpayers will be eligible to use this service at www.irs.gov or through www.firstgov.gov. The primary candidates for Free File are those taxpayers who prepare their own taxes and still file paper returns.

Last filing season, the IRS received nearly 85 million paper returns and nearly 47 million e-filed returns.

"Simply paying taxes is burden enough without the extra costs in time and professional help that too many Americans have endured until now," said Mitchell Daniels Jr., the White House’s budget chief.

President Bush proposed free online tax filing last February as one of his E-Government initiatives. The Treasury Department, Office of Management and Budget and IRS have made this possible through a public-private partnership with a consortium of tax software companies, the Free File Alliance, LLC.

Each Free File Alliance member company sets taxpayer eligibility requirements for its own program. These requirements will differ from company to company.

The agreement requires the Alliance, as a whole, to provide free services for at least 60 percent or 78 million of the nation's taxpayers during each filing season. As of January 16, 2003, the industry has exceeded that requirement, the IRS said. The number may fluctuate throughout the filing season as Alliance membership and offers change.

Generally, eligibility will be based on factors such as age, adjusted gross income, state residency, military status or eligibility to file a Form 1040EZ or for the Earned Income Tax Credit.

Taxpayers can determine their eligibility using an online questionnaire, Free File Wizard, which will assist taxpayers in identifying those free services for which they may qualify. Not all taxpayers will be eligible for free services.

The Free File Web site also answers frequently asked questions.