Some of our systems are 20, 30, 40 years old. We need to modernize them, and it's not cheap.

It had started looking like Free File was going to destroy the industry.

There are examples in the health medical records space; there are examples in student data and transcript space; and there are also examples in transportation and licensing space. So we're trying to understand how they work.

Last year, a little over 51 percent of all individual taxpayers took advantage of e-file. This year, we're expecting it to be close to 55 percent. That's well over 70 million returns.

The reason it is so popular is that it's very fast. It's easy.

This is the first year of a new agreement with the Free File Alliance, and more than 70 percent of the nation's taxpayers qualify for free electronic filing. While the Free File numbers are down slightly, this remains an important e-file option that taxpayers should consider as the April filing deadline approaches.