Taxpayers wary of electronic filing after H&R Block blunder February 18, 2000 Web posted at: 2:33 PM EST (1933 GMT)

From CNN Correspondent Patty Davis

CHICAGO (CNN) -- H&R Block said only a handful of customers were affected by a computer glitch that forced the company to remove its online tax preparation service from the Internet this week. But the problem has heightened concerns about Internet privacy.

The tax consulting company blamed a software glitch for accidentally allowing customers using H&R Block's e-filing service to see other clients' returns last weekend. While H&R Block expected a corrected version of the program to return online by this weekend. But some taxpayers remain uneasy, wondering whether electronic filing is safe.

"It scares me. It makes me wonder who has access to my information and what they will do with it if they did," said one taxpayer.

"I probably would have done it ... but now that there has been a glitch, I probably would say maybe not this year," said another.

The Kansas City, Missouri-based H&R Block said the computer anomaly did not affect its storefront service or its over-the-counter "TaxCut" software, and that no inaccurate information was sent to the IRS.

But some remain skeptical.

"When something like this happens, it undermines trust and therefore is a potential setback to electronic commerce and the other things the Internet is so good at," said Henry Perritt, dean of Chicago-Kent College of Law at the Illinois Institute of Technology.

Electronic filing has become a popular way for taxpayers to file federal tax returns. "It's time saving. You won't miss the deadline. Everything is taken care of for you," said one filer.

Thirty four million returns, one out of four, are expected to be filed electronically this year, 12 percent of them online using a home computer.

The IRS called the H&R Block incident isolated and maintains that electronic filing is safe. "The electronic filing system is very sound, very solid, very safe, very secure," IRS official Robert Barr said.

http://www.cnn.com/2000/TECH/computing/02/18/electronic.filing/index.html

-- Martin Thompson (mthom1927@aol.com), February 19, 2000