The IRS started the e-file program as a pilot project for the 1986 filing season in conjunction with tax-preparation software providers and the professional tax community. During the test year, five third-party transmitters were approved by the IRS to file Tax Returns electronically; they submitted 25,000 returns at three locations. Initially, tax preparers could file returns electronically only if no tax payment was due. The taxpayers that could participate in the program and the types of returns they could file were limited.
More and more Americans are choosing e-file, which lets them electronically file an accurate tax return or get an extension of time to file without sending any paper to the Internal Revenue Service. The 2007 filing season has set a series of records, highlighted by more than 72 million tax returns being filed electronically this year and home computer usage jumping 18 percent.
The jump in e-file reflected a larger increase in the use of electronic services. The IRS saw new records for in filings from home computers and the use of IRS.gov.
The 70 million e-file returns accepted through April 21 topped the 68.5 million electronic returns received for all of 2005. The agency expects the e-file number to increase before the close of the e-file season in October.
Benefits of E-filing :-
The most common benefit was that respondents found it to be more efficient, indicating that e-filing saved them both time and money.
The second-most- mentioned benefit was the reduced number of errors, attributable to the one-time entry of figures and the checks performed by preparation software.
Another benefit of e-filing was that it enabled e-filers to be more productive, presumably because it saves on paperwork costs, makes it easier to correct errors, which helps you to file your return smoothly and getting Fast Tax Refund.