The board released its recommendations for the Electronic Tax Administration Program in an annual report to Congress on electronic filing.

Although it has been evident to the IRS Oversight Board and others in the tax administration community for some time that the IRS would not reach the IRS Restructuring and Reform Act of 1998 (RRA 98) goal of 80 percent electronically filed tax returns by 2007, the board said it does not view this as a failure on the IRS' part.

In the nine years since the enactment of RRA 98, the percentage of individual e-filed returns nearly tripled -- from 20 percent in 1998 to about 58 percent in 2007. There has also been steady growth in the number of self-prepared individual returns filed electronically.

The IRS Oversight Board supports the vast majority of Electronic Tax Administration Advisory Committee's recommendations to help the IRS achieve its e-filing vision. These suggestions include increasing participation in electronic filing; delivering other electronic services to customers based on specific needs; and better protecting taxpayers and the tax administration system from those engaged in fraudulent tax activities.

The board also supports calling on Congress to revise requirements on mandatory electronic filing of certain tax returns and information documents, to lift the prohibition on the IRS' ability to require electronic filing of Form 1040 tax returns, and grant the IRS the discretion to implement e-file mandates for paid return preparers at a later date if needed to reach the 80 percent goal.

The IRS should implement mandates only after certain conditions are met, the oversight board said, such as thoroughly exploring all reasonable incentives to promote greater voluntary participation and studying the trade-offs between increased e-filing and taxpayer and preparer burden. The board said it does not want mandates to become a substitute for making electronic filing more convenient and attractive.