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As more individuals and businesses are starting rely upon electronic return filing and computer software to assist with preparing electronic tax and information returns, there are issues that must be properly managed and administered by the IRS to facilitate this transition.

The Electronic Tax Administration Advisory Committee (ETAAC) is a division of the IRS that advises the IRS on how to best oversee this transition. The ETAAC also provides feedback on the IRS’s electronic tax administration policies.

The ETAAC recently presented their annual report to congress. The report suggested that the IRS should continue to encourage electronic filing of tax returns.

The committee also suggested that the IRS continue to update their systems. More information is detailed in the full briefing:

WASHINGTON — The Electronic Tax Administration Advisory Committee (ETAAC) this month presented its 2010 Annual Report to Congress. The ETAAC provides feedback on the development and implementation of the Internal Revenue Service’s electronic tax administration strategy.

The report includes recommendations to further expand the use of electronic filing. The report recommends the IRS use a three-year phase-in approach to successfully implement the tax preparer requirement to electronically file individual tax returns. The report also calls for continued funding and completion of the modernization of IRS systems as well as collaboration between the IRS and industry regarding tax software standards and the implementation of the return preparer regulations.

“ETAAC plays a significant role in IRS efforts to improve the taxpayer’s experience via e-file and the Internet,” said David Williams, director of Electronic Tax Administration. “The IRS appreciates ETAAC’s recommendations, which we will consider as we plan our strategy for electronic tax administration.”

The 13-member panel provides an organized public forum for discussion of electronic tax administration issues and the overriding goal that paperless filing should be the preferred and most-convenient method of filing tax and information returns.

“ETAAC believes a fully e-enabled IRS is critical to meeting the overarching e-file goal and enhancing tax administration,” said Phil Poirier, ETAAC Chairman.

ETAAC submits an annual progress report to Congress each June. The IRS Electronic Tax Administration created the ETAAC in 1998 as required by the IRS Restructuring and Reform Act of 1998. The report is the result of research and analysis as well as meetings with senior IRS executives.

Public comments on the report may be sent to etaac@irs.gov .