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Online tax filing up for 2002

More people are filing returns online this year, according to early reports from the IRS and tax-preparation providers, propelled by anxiety over tax laws and the lure of bigger refunds.

More taxpayers are filing returns online this year, according to early reports from the IRS and tax-preparation providers, propelled by anxiety over tax laws and the lure of bigger refunds.

IRS e-filing plans worry tax industry

The latest IRS figures show that as of Feb. 15, more than 21 million taxpayers had filed returns electronically, an 8.2 percent increase over the same period a year ago.

Most e-filed returns came from professional preparers, but the biggest growth was in self-prepared returns filed by computer, a category that includes filers preparing their own returns using tax-preparation software or services. Such filing totaled 3.25 million for the period, up 37.5 percent from a year ago.

Tax-preparation companies reported similar results. An H&R Block representative said the company had 3.5 million e-filed returns as of Jan. 31, a 7.8 percent increase from the same time last year.

Scott Gulbransen, a spokesman for tax software and online services leader Intuit, said that as of the end of February, the company had already electronically filed 35 percent more tax returns than last year.

Neither company had interim figures for sales of desktop software--Intuit's various TurboTax packages and H&R Block's Taxcut--but tax applications have dominated researcher NPDTechworld's listings of the top-selling retail software in the United States since the first week of January. NPD's most recent report, for the week of Feb. 17 to Feb. 23, had tax programs accounting for seven of the top 10 software packages.

But Gulbransen said the biggest growth for Intuit was the TurboTax online service, with more than 1 million people preparing returns via the service in the first five weeks since it became available Jan. 12. The company expects to have 3.5 million returns filed via the online service this year, compared with 2.4 million last year.

Gulbransen said that while uncertainty over tax law changes has been a major impetus for people to file online, anticipation of fat refund checks may also be playing a role.

"The IRS is saying refund amounts are up, and I think that has really pushed electronic filing," he said. "People who have e-filed in the past know how easy it is and how much quicker you get your refund."