Thirty-two financial institutions are linking their Web sites to an Internet-based version of Intuit Inc.'s popular tax preparation software.
WebTurboTax lets taxpayers prepare and file all federal and state income tax returns via the Internet. Banks that have signed on to drive traffic to the site include Bank of America, BankBoston, Chase Manhattan Bank, First Union Corp., and Wells Fargo & Co.
Web portals America Online Inc. and Excite Inc. and the data processor Fiserv also have agreed to offer links on their Web sites to WebTurboTax.
"Many banks are using this as another on-line service to their customers to enhance their Web presence," said Elizabeth Dougherty, product manager of WebTurboTax.
Forrester Research has estimated that 250,000 tax returns will be filed via the Internet this year. By 2003, it expects more people to file their taxes via the Internet than through PC-based software programs.
The Cambridge, Mass., research firm also expects Intuit to capture at least 75% of the on-line tax preparation market over the next three years.
Intuit uses Secure Sockets Layer encryption to protect returns done on the Internet. Intuit then sends them to the Internal Revenue Service's computers via a direct electronic connection. The IRS sends Intuit an electronic date stamp for each return successfully filed that Intuit forwards to its users.
"Consumers get refunds back much faster when returns are filed electronically," said Ms. Dougherty.
She added that electronic tax preparation takes half the time of manual filing. Less than 2% of electronic returns have errors, compared with about 20% of manually filed returns, she said.