Adoption of e-filing: the US journey

Abstract

To promote effective tax administration, the United States Congress set a goal of 80% of all tax returns filed electronically by 2007. The deadline was extended to 2012, which saw 69% accomplished. Using time series analysis from 2005 to 2016, this study analyses the advancements of electronic tax filings in the USA. Several interesting observations are reported. First, individual e-filing has reached the goal in 2012. Second, overall trends indicate continuous and steady progress both by volume and by share. Third, the total e-filing ratio shows monotonical increase over the years but is still shy of the target in 2016. Fourth, individual e-filing constitutes the majority while business and tax-exempt e-file comprises 15% of the total. Fifth, employment tax e-file, while constituting over half of business e-file, ranks the lowest due to few mandates. Finally, several strategies and recommendations are proposed to reach the composite target.