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Ease a little tax pain Electronic filing fee is small, but reasons for it don't add up

If it costs a business something extra to provide a customer with a particular product -- synthetic motor oil, say, or organic cheese -- then it makes sense that at least some of that cost be passed along to the consumer. But it if costs a business less to provide a service in a particular way, it would be absurd to charge the customer more.

But the Internal Revenue Service doesn't see it that way. It charges some of the taxpayers who file online a fee for the privilege of doing so, even though electronic returns are cheaper for the tax collection agency to process and generally contain fewer errors.

New York Sen. Charles E. Schumer, chairman of the Joint Economic Committee of Congress, has called for the IRS to eliminate the filing fees for everyone who submits his tax return via the Internet. (Those with incomes of less than $52,000 can already file at no fee.) If it doesn't, he promises legislation to force the change.

A Joint Economic Committee report figures that, at an average fee of $14.95, electronic filers paid more than $1 billion in IRS e-file fees last year, with nearly $59 million of that coming from New York taxpayers.

The IRS says it doesn't want to unfairly compete with private business by offering for free something that traditional and online tax preparers get paid for. But that just doesn't add up.

What paid preparers -- down the street or online -- provide is expertise and advice about matters beyond income and deductions, such as help deciphering the various forms that deal with taxable dividends and business credits. They can also add, subtract, multiply and divide better than you can. Those are services that businesses deserve to be paid for.

The IRS electronic filing fee, on the other hand, is an additional charge to people who already have saved the IRS more than $2 apiece, given that the average cost of processing a paper return is $2.65 while the average cost of routing thee-return is only 29 cents.

Such a savings should encourage the IRS to encourage more taxpayers to file online. But, after a sharp increase in the first few years e-filing was offered, the number of eligible returns filed that way has leveled out at just above 50 percent.

There may be a lot of reasons for that including, perhaps, a widespread mistrust of linking one's computer to a federal agency. But the irritant of a special fee for filing tax returns in the 21st century manner should be removed.

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