January 02, 1997
In response to our customers' desires for simpler, high-tech options, the Internal Revenue Service offers several choices for those seeking alternatives to traditional paper forms. TeleFile, electronic filing and computer filing offer such benefits as:
- More accurate returns. Returns filed electronically or in the 1040PC format are more accurate because the software programs involved catch and correct mistakes while preparing the returns. If there are errors on electronically filed returns, the system alerts the senders within a day or two so they can make corrections and re-transmit the return. 1040PC format returns are easier for IRS to process, which also reduces errors. Electronic and TeleFile returns do not need transcription, as the data arrives at IRS computer-ready.
- Acknowledgments of receipt. Usually within 24 hours, the
electronic filer receives a message that the IRS has accepted the
return for processing. The TeleFile system gives callers a
confirmation number while they are on the phone to let them know
that they have completed the filing of their returns.
- Earlier refunds. When the IRS receives complete, accurate,
computer-ready data, it can usually issue refunds within three
weeks, compared to 40 days for paper returns. The refund arrives
even sooner when a taxpayer elects to have the money deposited
directly into a bank account, a security option that is now
available to all filers.
TeleFile, the IRS's telephone filing system, is now available
to married couples as well as single taxpayers without dependents.
Over 22 million taxpayers whose 1995 tax returns indicate that they
are potential TeleFile users received a special tax package.
Instead of tax forms, this package has a worksheet which becomes the
TeleFile Tax Record and a customer service number that will act as
the taxpayer's signature. If there are no changes to the name or
address that the IRS has printed on the Tax Record and the taxpayer
is otherwise eligible, TeleFile will be the easiest way to file.
Those who are due a refund may have it deposited directly to a bank
With a Touch-Tone phone, TeleFilers enter interest income, any
unemployment compensation and the wages, tax withheld and employer
identification number from each W-2 Form. Those taking advantage of
direct deposit also enter a bank routing number and account number.
The telephone call takes about 10 minutes. The IRS figures the
adjusted gross income, standard deduction, exemption, taxable
income, tax, and any earned income credit, plus any refund or tax
due, while the taxpayer is on the phone. Refunds will be sent about
three weeks after the telephone filing -- a week earlier for direct
deposit -- and any tax due can be paid by April 15, 1997. Last
year, the IRS received over 2.8 million TeleFile returns.
Electronic filing, in which accepted participants send tax
filing data for their clients to the IRS from their computers, is
available for balance due as well as refund returns. This means if
taxpayers owe money, they can file returns earlier while still
making tax payments by April 15, 1997. For refund taxpayers,
electronic filing means a faster refund, with the option of having
it deposited directly into their bank accounts.
First tested in 1986, standard electronic filing had grown to
over 12 million individual returns by 1996.
Many taxpayers in 31 states and the District of Columbia will
be able to file their federal and state tax returns electronically
in one transmission to the IRS. The IRS forwards the state data to
the appropriate state tax authority. This federal/state electronic
filing will be available in Arkansas, Colorado, Connecticut,
Delaware, Georgia, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky,
Louisiana, Maryland, Michigan, Mississippi, Missouri, Montana,
Nebraska, New Jersey, New Mexico, New York, North Carolina,
Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, Utah,
Virginia, West Virginia and Wisconsin, with a limited test in the
District of Columbia.
The On-Line Filing Program allows taxpayers to file their tax
returns from their home computers through a third-party transmitter.
Participating tax preparation software programs will include an
on-line filing option through a contract transmitter.
To file on-line, a taxpayer transmits a completed tax return
file to a transmitter, which converts the file from the tax
preparation software's format to the IRS's format. The transmitter
then sends the converted return file to the IRS. The IRS will
notify the taxpayer through the transmitter whether or not the
return is accepted. After the IRS accepts the return, the taxpayer
mails a signature document and copies of any W-2 forms to the IRS.
Interested computer users can get a list of On-Line Filing
Program companies through the IRS homepage on the World Wide Web at
http://www.irs.gov or directly by modem at 703-321-8020.
This list tells which software has been accepted into the On-Line
Filing Program, as well as phone numbers to contact the various
vendors about procedures and transmission fees.
Home computer users can shorten their paperwork and choose
direct deposit of their refunds with tax preparation software that
uses the 1040PC format. Unlike traditional forms, which may have
many blank lines, the 1040PC format prints only the lines with
entries. The result is a three-column list that can, for example,
cut a regular 12-page return to two pages. Taxpayers sign the 1040PC
answer sheet and attach their W-2 forms and any other required
signature documents. Standard computers and printers produce the
1040PC format on plain paper.
When a refund is due, the software gives the taxpayer the
option of entering the information for a direct deposit to the
taxpayer's bank account. When additional tax is due, the program
prints out a voucher to accompany the payment. The taxpayer can
then send the 1040PC, the payment voucher, and check to the IRS by
April 15, 1997.
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