--- published: true layout: post title: 'IRS Modernized e-File (MeF): A Blueprint For Public & Private Sector Partnerships In A 21st Century Digital Economy (DRAFT)' image: http://kinlane-productions2.s3.amazonaws.com/api-evangelist-site/blog/bw-irs-logo.jpg author: name: kinlane tags: - Economy - Partners - Blueprint - Digital - Partnership --- [Download as PDF](https://bit.ly/147BfVv) [![](https://s3.amazonaws.com/kinlane-productions2/federal-government/irs/bw-irs-logo.jpg)](https://s3.amazonaws.com/kinlane-productions2/federal-government/irs/bw-irs-logo.jpg)The Internal Revenue Service is the revenue arm of the United States federal government, responsible for collecting taxes, the interpretation and enforcement of the Internal Revenue code. The first income tax was assessed in 1862 to raise funds for the American Civil War, and over the years the agency has grown and evolved into a massive federal entity that collects over $2.4 trillion each year from approximately 234 million tax returns. While the the IRS has faced many challenges in its 150 years of operations, the last 40 years have demanded some of the agency's biggest transformations at the hands of technology, more than any time since its creation. In the 1970s, the IRS began wrestling with the challenge of modernizing itself using the latest computer technology. This eventually led to a pilot program in 1986 of an new Electronic Filing System (EFS), which aimed in part to gauge the acceptance of such a concept by tax preparers and taxpayers. By the 1980s, tax collection had become very complex, time-consuming, costly, and riddled with errors, due to what had become a dual process of managing paper forms while also converting these into a digital form so that they could be processed by machines. The IRS despereatly needed to establish a solid approach that would enable the electronic submission of tax forms. It was a rocky start for the EFS, and Eileen McCrady, systems development branch and later marketing branch chief, remembers, “Tax preparers were not buying any of it--most people figured it was a plot to capture additional information for audits." But by 1990, IRS e-file operated nationwide, and 4.2 million returns were filed electronically. This proved that EFS offered a legitimate approach to evolving beyond a tax collection process dominated by paper forms and manual filings. ### [](https://github.com/kinlane/irs-modernized-efile-blueprint/blob/master/README.md#even-federal-agencies-cant-do-it-alone)Even Federal Agencies Can't Do It Alone Even with the success of early e-file technology, the program did not get the momentum it needed without the support of two major tax preparation partnerships--H&R Block and Jackson-Hewitt. These helped change the tone of EFS efforts, making it more acceptable and appealing to tax professionals. It was clear that e-File needed to focus on empowering a trusted network of partners to submit tax forms electronically, sharing the load of tax preparation and filing with 3rd party providers. And this included not just the filing technology, but a network of evangelists spreading the word that e-File was a trustworthy and viable way to work with the IRS. [![](https://s3.amazonaws.com/kinlane-productions2/federal-government/irs/irs-efile-logo.jpeg)](https://s3.amazonaws.com/kinlane-productions2/federal-government/irs/irs-efile-logo.jpeg) ### [](https://github.com/kinlane/irs-modernized-efile-blueprint/blob/master/README.md#bringing-e-file-into-the-internet-age)Bringing e-File Into The Internet Age By 2000, Congress had passed IRS RRA 98, which contained a provision setting a goal of an 80% e-file rate for all federal tax and information returns. This, in effect, forced the IRS to upgrade the e-File system for the Internet age, otherwise they would not be able meet this mandate. A working group was formed, comprised of tax professionals and software vendors that would work with the IRS to design, develop and implement the [Modernized e-File(MeF)](https://www.irs.gov/uac/Modernized-e-File-\(MeF)\-Program-Information) system which employed the latest Internet technologies, including a new approach to web services which used XML that would allow 3rd party providers to submit tax forms in a real-time, transactional approach (this differed from the batch submissions required in a previous version of the EFS). ### [](https://github.com/kinlane/irs-modernized-efile-blueprint/blob/master/README.md#moving-beyond-paper-one-form-at-a-time)Moving Beyond Paper One Form At A Time Evolving beyond a 100 years of paper process doesn't happen overnight. Even with the deployment of the latest Internet technologies, you have to incrementally bridge the legacy paper processes to a new online, digital world. After the deployment of the MeF, the IRS worked year by year to add the myriad of IRS forms to the e-File web service, allowing software companies, tax preparers, and corporations to digitally submit forms into IRS systems over the Internet. Form by form, the IRS was being transformed from a physical document organization to a distributed network of partners that could submit digital forms through a secure, online web service. [](https://github.com/kinlane/irs-modernized-efile-blueprint/blob/master/README.md#technological-building-blocks)Technological Building Blocks