ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Monday, March 11, 1996 TAG: 9603130024
SECTION: MONEY PAGE: 6 EDITION: METRO
DATELINE: WASHINGTON
SOURCE: DAVE SKIDMORE Associated Press Writer
The Internal Revenue Service expects a record 16.1 million taxpayers this year to file their returns electronically, using telephones, professional tax-preparers and personal computers.
THE AGENCY WANTS paperless filing to become the norm rather than the exception in the future for its own - and taxpayers' - benefit. It saves the IRS money and staff time. For the taxpayer, it means a faster refund and fewer errors.
The IRS promises a refund within three weeks, compared with 40 days for paper returns. And there's no danger of information being mistyped by IRS data transcribers because it goes directly into the agency's computers.
TeleFile - the IRS' telephone filing system - is available nationwide for the first time this year. Taxpayers in 10 states had the option last year.
To be eligible, taxpayers must receive a TeleFile booklet containing a personal identification number. They must be single, with no dependents, taxable income of less than $50,000, have interest income less than $400, and live at the same address as last year.
During the call, which should last about 10 minutes, taxpayers follow the nine steps outlined on a work sheet and the recorded-voice instructions, available in English and Spanish.
Using touch-tone telephones, they enter their Social Security numbers, answer two yes-or-no questions and enter the employer identification numbers from their W-2 forms, their total wages, federal tax withheld and taxable interest.
After a pause, a recorded voice tells the taxpayer's federal adjusted gross income, taxable income, and refund due or additional tax owed. A confirmation number is provided at the end.
The IRS expects about 3 million of 23 million eligible taxpayers will take advantage of the program. There's one disadvantage: Taxpayers can't receive direct deposit of their refunds.
The agency projects about 13 million taxpayers will file electronically through tax preparation services. That method does permit direct deposit, but it may not be free.
Some tax preparers will transmit your return for free if they're doing your return. If you do your own return and bring it in, the transmission fee runs around $40.
The preparer must follow up your electronic return by mailing Form 8453 with your signature and your W-2 forms. In many states, you can file your state return electronically at the same time. If you owe money, you can file your return as soon as you want and wait until April 15 to mail the check.
One feature of electronic filing that helped make it popular - the availability of ``instant refund'' loans - has been crimped since last year. Because the IRS believed such quickie loans encouraged fraud, it no longer paves the way for them by indicating that a refund isn't encumbered by delinquent student loans or other past-due debt to the government. For some, that's made the instant loans, secured by a refund, more expensive and harder to get.
Home computer users have a third electronic filing option. They can file their returns on CompuServe or to a transmission service designated by their software manufacturer.
The transmission service converts the file from the software's format to the IRS' format. The IRS home page on the World Wide Web - http://irs.ustreas.gov - lists the nine software packages offering this feature and the six transmission services.
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