The Internal Revenue Service said today that the total number of tax returns received by the agency for the tax season through March 12 fell by 2.9 percent as the number of returns electronically filed rose by .2 percent. Meanwhile, taxpayers were turning away from professional preparers and towards self-prepared returns. All these trends have been viewed as a reaction to economic conditions.While the IRS termed the drop slight, it was greater than had been predicted by many observers before the season began in January.

The 3.4 percent drop in the number of efield returns prepared by professional preparers was accompanied by a 6.9 percent rise in efiled self-prepared returns. Financial results released by H&R Block and Jackson Hewitt for their January quarter indicate that the drop in professional preparation has largely come at their expense as taxpayers turn to digital preparation, overwhelmingly via the Internet.

There were 35.51 million professionally prepared returns efiled for the period covered, down from 36.75 million a year earlier. The number of self-prepared filings rose to 21.29 million, up from 19.9 million.