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IRS back to drawing board

A multimillion-dollar plan by the IRS to allow taxpayers to file returns via the Internet is shelved again, following a critical report by the U.S. General Accounting Office.

A multimillion-dollar plan by the Internal Revenue Service to allow taxpayers to file their tax returns via the Internet has been shelved again because of a critical report by the General Accounting Office this week.

The service, called Cyberfile, promises to save time and money for taxpayers by submitting tax forms through the Net. Cyberfile was set for release early this year, and was already delayed once due to security problems.

Now the problems are worse, GAO officials said. The GAO sent a report to Capitol Hill Monday, which said that Cyberfile was unreliable. The GAO held a similar hearing about the plan in March.

"We testified that the system was not built adequately," said a GAO official, who asked not to be named. "The software the IRS developed was undisciplined. They didn't adequately consider security requirements."

The IRS says the plan has been "sidetracked" and will be available when various issues, including security, are resolved.

"We have been testing Cyberfile, and it didn't meet the high-quality standards the IRS was looking for," said Larry Wright, an IRS spokesman in San Francisco. "We don't want to launch anything that's less than 100-percent accurate."

IRS officials in Washington declined comment on the GAO's allegations.

Taxpayers already can file their returns electronically using software such as Turbo Tax from Intuit or Simply Tax by Computer Associates, and with online services such as America Online or CompuServe.

Wright says the IRS is deciding whether it will charge for Cyberfile. Despite the problems with its service, the agency still has ambitious expectations that every citizen who owns a personal computer will file electronically by the year 2000.

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No taxes via the Net yet