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Frequently Asked Questions:

Q: What is Electronic Filing?

A : Electronic Filing (eFile) is one of the most popular methods of filing taxes, developed by the IRS nearly two decades ago, starting in 1986. As of 2006, more than one half of all personal income taxes have been eFiled.

Electronic Filing involves formatting the data of a prepared return into a prescribed form and conveying that data to the Service Center(s) via secure Internet connectivity using SSL or dedicated telephone lines individually or in batches.

An additional new method, utilizing the Internet for the transmission medium to the service centers in real time, was developed and FileYourTaxes.com was the first company, successfully employing this method of eFiling taxpayer returns with the California Franchise Tax Board and the California Board of Equalization.

Certain advantages to eFiling:

• Increased efficiency in processing. Prior to transmission, the return information is subjected to stringent error checks. Once transmitted, the Service Center performs a more extensive error check, resulting in a filed return with significantly low error rates.

• Because of increased efficiency, the time it takes to issue your refund is reduced. If you are able to receive your refund via Direct Deposit, you may receive your refund sooner than you thought.

• If you owe the government money, you will be given a voucher. You can then mail your payment with the voucher on or before the due date of the return, normally April 15th. Likewise, you may have the government access your funds in your bank or financial institution account on the day you specify if you allow Electronic Funds Withdrawal - Direct Debit (ACH Debit) payment option. You can, in effect eFile now and pay later. FileYourTaxes.com was a proud participant in the IRS pilot of this program under the name "ACH Debit Pilot Program" during the 1998 tax year filing and the Direct Deposit pilot prior to 1998.

• Electronically filed returns are acknowledged by the Service Centers and if accepted, the returns will be identifiable with a Declaration Control Number (DCN). Additionally, FileYourTaxes.com will provide an electronic postmark (ePostmark) for all the returns filed. This postmark will have the same effect and validity to the Service Centers as the postmark affixed at the post office and, as an added advantage, will be correlated with the eFiled return. Such a definitive relationship may not be obtained through the regular post office postmark, even if a method of certification is employed.

Due to its efficiency and desirability, it is understood that the IRS deemed the cost of eFiling a "de miminis fringe benefit." Thus, if employers wish to provide this benefit to their employees - where the cost would be a deductible employee benefit expense for the employer - the benefit would not be a taxable income to the employees. Employers may provide this benefit as a holiday gift to their employees.

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