Interactive Voice Response (IVR) technology allows people to communicate with computer applications through telephones. The caller accesses information on a computer using a touch-tone telephone. IVR systems interact with host computer databases to accept and retrieve data in response to telephone keypad input.
So-called Telefile applications can support individual or business taxpayers by providing access to a toll-free or local number enabling the filer, after validation of identity via PIN and other data, to respond to requests for information from a professionally recorded voice script. The computerized tax application can edit data the taxpayer supplies, reject duplicate filings, and perform tax computations and other tasks. Tax return data can then be formatted and delivered to the state's processing system. Telefile systems can handle large volumes of inbound calls and provide account information and accept account transactions without human intervention.
Advantages include widespread taxpayer access to a data entry device (telephone), 24x7 service, and virtually no data entry/data correction costs. It permits accelerated processing of a personal income tax refund, providing improved customer service.
Telefile capability can be expanded to business tax (especially zero-dollar or no-remit) returns, refund inquiry systems, automated payment agreements, and routine taxpayer information text response applications, and requires little or no human intervention in filing process.
Among the downsides is the possibility of excess telephone capacity during non-peak calling periods, and its utility for somewhat simplified tax forms, although this is changing as Telefile applications are expanded.