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Many Consumers Still Uncomfortable Filing Taxes Online


March 26, 2004
Friday - 1:30 am

Although more Americans are filing their taxes online, more than half of online consumers can't seem to bring themselves to trade their pencils and paper returns for online filing. A big reason is security: many consumers still don't want their personal information on the Internet, according to the latest Consumer Internet Barometer. This quarterly measure of who's doing what on the Internet is produced by TNS NFO and The Conference Board.

With the tax season now in full bloom, close to 57% of online households intend to file their 2003 federal taxes offline, while only about 28% will file online. The remaining 15% are undecided.

The number-one reason cited for not filing online is that the filer does not do his or her own taxes. But a very close second reason is that filers don't want their personal information on the Internet.

Among those intending to file their federal taxes online, the most preferred method is through a professional service. However, there are some significant differences between the preferences of men and women. More than 45% of women intend to file online through a professional service, while only 39% of men intend to do so. Nearly 31% of men intend to file online using do-it-yourself tax software, while only 28% of women intend to do the same. More men than women, about 27% versus 22%, will use IRS E-file. More men than women initiated their household's decision to file federal taxes online.

"Online consumers continue to express concern about security when using the Internet to conduct financial transactions," says Lynn Franco, Director of The Conference Board's Consumer Research Center. "Americans seem unwilling to give up their traditional paper federal tax return forms, as approximately 57% of online households intend to file their 2003 federal taxes offline. Among online bill payers, bank websites are also failing to lure customers with their online bill payment services."


Online households continue to express a great degree of concern about security when using the Internet to conduct financial transactions online. Says Franco: "This fear, in turn, is a likely factor in why financial transactions rank so low on consumers' list of reasons for using the Internet, and why this activity generates such weak levels of satisfaction and trust."

Online banking is the activity that causes the greatest amount of apprehension among online consumers. Nearly 83% of online consumers expressed concern about security when banking online. Almost as many expressed similar concerns about paying bills online. Buying and trading financial instruments, as well as filing taxes online were less worrisome. But close to three-quarters of online consumers felt concerned about security. In all cases, women were significantly more concerned about security than men. The difference was most pronounced regarding the filing of taxes online.

Despite these security issues, more than 25% of online households have conducted a financial transaction online over the past three months. More than 25% of online consumers have banked online. Less than 20% have paid their bills online, while an even smaller proportion have bought or traded financial instruments online. Among online bill payers, more than half prefer to use the individual service/company's website rather than their own bank's website. The reason for this may be a combination of consumers' online banking fears and banking fees.


About This Survey:

The Consumer Internet Barometer is based on a quarterly survey of 10,000 households. A unique sample is surveyed each quarter. Return rates average 70%, which ensures highly representative data. Data is weighted as well to reflect the latest U.S. household demographic information. The latest survey was conducted during the first quarter of 2004. For information on the full report, please go now to



Source of News Release:

The Conference Board 
Web Site



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