What Was Telefile?
Telefile (and state variations like TeleFile in Pennsylvania) was a system created by the federal government and some state governments that allowed taxpayers to file their taxes over the phone.
The federal government's Telefile system was provided by the IRS nationally from 1997 to 2005. Telefile allowed taxpayers filing the IRS form 1040EZ to phone in their tax returns with a touch-tone phone. The IRS ended the Telefile program as a result of the general migration of taxpayers filing forms electronically over the internet.
Many state telefile systems have also been discontinued. However, some states, such as Pennsylvania, still operate them.
- Telefile was a program the federal government and some state governments began offering in the late 1990s so that taxpayers could file their taxes over the phone.
- Filing taxes over the phone was easier–and considered a technological advance–over the system that required filers to mail in their taxes.
- The rise of the Internet made it possible to file taxes online with more transparency and consistency so filing taxes over phone lines quickly became obsolete.
How the Federal Telefile Worked
Telefile is no longer in place and individuals can no longer file their federal tax forms over the phone.
In the eight years the IRS allowed telefiling, it was marketed as a convenient service for taxpayers with simple tax returns. The Telefile service worked by letting taxpayers dial the numbers on their tax return directly into the phone to report their income.
Many states also allowed telefiling, following the lead of the federal government. Their technology was largely the same as the technology the IRS used.
State Telefile Systems
If you are curious if your state still offers a telefiling system, go to the state revenue, treasury or tax authority webpage, or search your state's name and the word "telefile" in an internet search engine.
Residents of the state of Pennsylvania can still file their taxes over the phone. Some states, such as Wisconsin, allow business filers to file their sales and use tax returns over the phone.
Who Was Eligible for Telefile?
Telefile was not a service that could be ordered; eligible taxpayers automatically received the Telefile package in the mail.
The IRS made Telefile available to individuals who filed form 1040EZ. Until the Tax Cuts and Jobs Act of 2017, the 1040EZ was the shortened version of the IRS’s standard Form 1040 (the standard form for income tax). Since 2017, the 1040EZ form has been discontinued.
Form 1040EZ was a condensed version of Form 1040, intended to provide taxpayers with basic tax situations a fast and easy way to file their income taxes. To use the form, a taxpayer must have had taxable income of less than $100,000, less than $1,500 of interest income, and have claimed no dependents. While it was offered, the 1040EZ was the first tax form first-time filers ever completed.
Why Is Telefile No Longer Available?
The IRS replaced telefile with electronic filing in 2005.
E-filing allows individuals to submit their tax returns over the internet using IRS pre-approved tax preparation software. Over the last several years, e-filing has increased in popularity and is now the most common way individuals file taxes.
Beyond the convenience for filers of being able to file from the comfort of their home, e-filing saves the IRS time and money by transmitting tax data directly into the agency's computers. This is an improvement over the old system where individuals would mail their returns directly to the taxing authority or have a preparer do so. E-filing has significantly reduced the possibility of keying and input errors and speeds up the process by orders of magnitude.
Another benefit is that when e-filing, the tax filer receives a confirmation or rejection notice within 24 hours of transmitting the electronic documents. That confirmation is proof that the IRS received the tax return and it is in process, while the rejection is notice to the taxpayer that their form has not been accepted by the IRS.
If an individual’s adjusted gross income is $69,000 or under, they can file on the IRS website directly using the IRS Free File system. While there are many companies that provide e-filing to individuals and businesses, the IRS does not endorse or approve any particular software for e-filing.