Friday, April 27, 2007

IRS Seeks Nominations for Internal Revenue Service Advisory Council

IRS Seeks Nominations for Internal Revenue Service Advisory Council

IR-2007-93, April 27, 2007

WASHINGTON — The Internal Revenue Service is requesting membership nominations for the Internal Revenue Service Advisory Council (IRSAC). Applications will be accepted from May 1, 2007, through June 15, 2007.

Originally called the Commissioner’s Advisory Group (CAG) and renamed in 1998, IRSAC’s purpose is to provide an organized public forum for IRS officials and representatives of the public to discuss relevant tax administration issues. The committee presents a report to the Commissioner of Internal Revenue each year at a public meeting in the fall.

In order to effectively advise the Commissioner and IRS executives, members are drawn from substantially diverse backgrounds. Membership is balanced to include representation from the tax professional community, including, but not limited to, tax attorneys, certified public accountants, enrolled agents, enrolled actuaries and appraisers, as well as large and small business representatives and other tax practitioners.

IRSAC is comprised of up to 30 members, who are appointed to three-year terms by the Commissioner. Nominations are currently being accepted for five to seven appointments that will begin January 2008.

Interested parties may nominate themselves and/or one other qualified person for membership. Nominees should be in good standing regarding their own tax obligations, and should represent professional and ethical ideals. All nominees must complete an application and a tax check waiver form. In addition, FBI criminal and subversive checks using fingerprints and, if applicable, practitioner checks are required of all nominees.

More information, including application packages, is available on the Tax Professional’s Page. Questions about the nomination process can be sent to the following e-mail address: *public_liaison@irs.gov.

Wednesday, April 18, 2007

IRS Gives Northeast Storms Victims Until April 26 to File Tax Returns

IRS Gives Northeast Storms Victims Until April 26 to File Tax Returns

IR-2007-92, April 18, 2007

WASHINGTON — Taxpayers affected by the major storm that hit the Northeastern United States April 16 now have until Thursday, April 26 to file their tax returns, the Internal Revenue Service said today.

Earlier this week, the IRS gave taxpayers directly impacted by the storm an additional two days beyond the April 17 deadline to meet their tax filing obligations without incurring late filing and payment penalties. After further assessment of conditions across the region affected by the April 16 storm, the IRS has decided to allow affected taxpayers an additional seven days to fulfill their tax filing obligations.

Power outages and public transportation problems made it impossible in some cases for some taxpayers and tax professionals to meet the April 17 filing deadline.

Affected taxpayers can mark their paper tax returns with the words “April 16 Storm.” Taxpayers who e-file their returns can use their software’s “disaster” feature, if available.

This news release supercedes IR-2007-89.

Related Item:

Frequently Asked Questions about the April 2007 Storm Relief

Taxpayers, Tax Professionals with TurboTax Problems Have Until Midnight April 19 to e-file

Taxpayers, Tax Professionals with TurboTax Problems Have Until Midnight April 19 to e-file

IR-2007-91, April 18, 2007

WASHINGTON — Taxpayers who were unable to e-file their tax returns Tuesday using Intuit Inc. software products have until midnight on Thursday, April 19, to file their returns, the Internal Revenue Service announced Wednesday.

Potentially up to several hundred thousand last-minute tax filers were affected by company server problems on Tuesday evening, and they or their accountants may have been unable to electronically file returns. Intuit confirmed Wednesday that those problems had been resolved, and it was successfully accepting e-file returns on Wednesday.

The company said affected taxpayers and tax professionals include those using “TurboTax,” “ProSeries,” “Lacerte” and Intuit’s Free File offering,“TurboTax Freedom.”

Intuit product users who were unable to file their returns through the company’s servers Tuesday should e-file as soon as possible. The IRS will not apply late filing penalties to taxpayers who were affected by this problem.

Overall, the IRS has seen a strong year for e-filing. Taxpayers filed more than 75 million returns electronically through April 17, shattering last year’s record of 73.2 million.

E-file and Free File will remain available through Oct. 15, 2007, to taxpayers who have requested a six-month filing extension.

Tuesday, April 17, 2007

IRS Grants Six-Month Filing, Payment Extension Following Virginia Tech Shooting

IRS Grants Six-Month Filing, Payment Extension Following Virginia Tech Shooting

IR-2007-90, April 17, 2007

WASHINGTON — The Internal Revenue Service today granted a six-month tax filing and payment extension to those affected by the shootings Monday at Virginia Tech, in Blacksburg, Va. This relief applies to the victims, their families, emergency responders and university students and employees.

“Taxes are the last thing the Virginia Tech family should be worried about at this time,” IRS Commissioner Mark W. Everson said. “Our hearts go out to the people affected by this tragic event.”

The relief announced today allows taxpayers affected by the events at Virginia Tech to have until Oct. 15, 2007, to file and make payments associated with their 2006 individual tax returns due April 17. No filing and payment penalties will be due for those who qualify for this extension as long as the returns are filed and payments are made by Oct. 15, 2007.

In order to claim this relief, taxpayers need to call the IRS at 1-866-562-5227 and identify themselves to the IRS before they file and or make payment.

Please note that taxpayers with questions not related to the Virginia Tech situation should visit IRS.gov or contact the regular IRS toll-free number at 1-800-829-1040.

Monday, April 16, 2007

IRS Gives April 16 Storm Victims Additional 48 Hours to File Income Tax Returns

IRS Gives April 16 Storm Victims Additional 48 Hours to File Income Tax Returns

SUPERCEDED BY IR-2007-92

IR-2007-89, April 16, 2007

WASHINGTON — Victims of the major storm affecting several Northeastern states on Monday, April 16 will have two additional days to file their tax returns beyond the April 17 tax deadline, the Internal Revenue Service announced today.

Taxpayers directly impacted by the storm have until midnight April 19 to meet their tax filing obligations without incurring late filing and payment penalties.

Across the Northeast, there have been power outages and public transportation problems making it difficult in some cases, if not impossible, for some taxpayers and tax professionals to meet the April 17 filing deadline.

“Because this unusually forceful storm hit within 24 hours of the filing deadline, we are giving affected taxpayers 48 additional hours,” IRS Commissioner Mark W. Everson said.

Affected taxpayers can mark their paper tax returns with the words “April 16 Storm.” Taxpayers who e-file their returns can use their software’s “disaster” feature, if available.

Taxpayers can keep up to date by visiting the IRS.gov Web site and clicking on “Newsroom.”

Related Item:

IRS Offers Last-Minute Reminders

IRS Offers Last-Minute Reminders

IR-2007-88, April 16, 2007

Read below for information on e-file, Free File, Telephone Excise Tax Refund, Earned Income Tax Refund, errors in filling out returns, electronic payments, extensions of time to file and pay and installment agreements. And check out 1040 Central, your one-stop shop for all of your tax filing and paying information needs.

WASHINGTON — With the April 17 tax return filing and tax payment deadline imminent, the Internal Revenue Service offers last-minute tips for those who haven’t yet filed or paid.

Taxpayers can minimize any possible interest assessments and late filing or late payment penalties by filing and paying by the due date.

File Electronically

Filing electronically is fast, accurate and easy. The electronic filing program checks for errors and necessary information, increasing the accuracy of the return and reducing the need for correspondence with the IRS to clarify errors or omissions. The computer software leads the user step-by-step. Most people can usually file a state tax return at the same time they electronically file their federal return. Once the return is accepted for processing, the IRS electronically acknowledges receipt of the return. Generally, when someone files electronically, their refund will be issued in about half the time it would take if they had filed a paper return. Those who choose direct deposit will get their refund in even less time. More information on e-file is available on this Web site.

Use IRS Free File

Nearly 20 companies are offering free electronic filing to taxpayers whose 2006 adjusted gross income was $52,000 or less. That means 70 percent of all taxpayers, 95 million individuals, can take advantage of the IRS-sponsored Free File program. Free File cannot be accessed through tax preparation Web sites that inaccurately say they are part of the Free File Alliance. The only way to access this program is through the IRS’s own secure, official Web site, IRS.gov, where a link to Free File may be found on the home page.

Don’t Overlook These Benefits
  • Telephone Excise Tax Refund–– This is a one-time refund of long distance excise taxes available on 2006 income tax returns. The refund applies to charges billed from March 2003 through July 2006. The IRS offers a standard refund amount of $30 to $60, or taxpayers can calculate the actual tax paid. Even if the taxpayer does not normally have to file a return, Form 1040EZ-T can be used to request this refund. Businesses and exempt organizations can also request it. Taxpayers can find more information on this special payment on this Web site.

  • Earned Income Tax Credit–– Earned income of less than $39,000 in 2006 may qualify a taxpayer to claim the earned income tax credit. This credit could be worth up to $4,536. When the EITC exceeds the amount of taxes owed, it results in a tax refund to those who claim and qualify for the credit. To qualify, taxpayers must meet certain requirements and file a tax return, even if they did not earn enough money to be obligated to file a tax return. An electronic special “EITC Assistant” is available on IRS.gov to help taxpayers determine whether they are eligible. Taxpayers can access more information on this credit by clicking on “1040 Central” on the front page of this Web site.
Make Sure the Paper Return is Error-free

Those who file a paper return can improve their chances of avoiding common errors that might result in a delay in the processing of their return or increase the need for correspondence with the IRS to clarify errors or omissions if they:

  • Put all required Social Security numbers on the return
  • Double-check their figures
  • Sign their form
  • Attach all required schedules
  • Send their return or request an extension by the April filing deadline
Pay Electronically

Taxpayers who file electronically can e-file and e-pay in a single step by authorizing an electronic funds withdrawal or by credit card. Electronic payment options are convenient, safe and secure methods for paying taxes or user fees. Taxpayers can charge taxes on their American Express, MasterCard, Visa or Discover cards, using an IRS-authorized service provider listed on IRS.gov. The service providers charge a convenience fee based on the amount of tax the taxpayer is paying. Taxpayers should not add the convenience fee to their tax payment. A link to the “electronic IRS” is located on the front page of this Web site.

For those who can’t file or pay on time, the IRS has alternative options.

Request an Extension of Time to File

If a taxpayer can't meet the filing deadline to file their tax return, they can get an automatic six month extension of time to file from the IRS, but they must submit the request by April 17. The extension gives taxpayers until October 15 to file the tax return. However, an extension of time to file does not give the taxpayer an extension of time to pay, which must be separately requested. Those who owe taxes can make a payment when they file the extension either by mailing a check made out to the U.S. Department of the Treasury or by several electronic payment methods, such as electronic funds withdrawals from bank accounts and credit card payments. Taxpayers can get an automatic six-month extension of time to file their tax returns by filing Form 4868, Automatic Extension of Time to File. Taxpayers can e-file the extension request from a home computer or through a tax professional who uses e-file. Taxpayers can e-file their extensions at no cost. Several companies offer free e-filing of extensions through the Free File Alliance; these companies are listed on this Web site.

Request an Extension of Time to Pay

Based on the circumstances, a taxpayer could qualify for an extension of time to pay. The IRS is willing to allow extensions of time to pay in order to assist in tax debt repayment. A taxpayer can request an extension from 30 to 120 days depending on the specific situation. Taxpayers qualifying for an extension of time to pay of 30 to 120 days generally will pay less in penalties and interest than if the debt were repaid through an installment agreement. Taxpayers can request an extension of time to pay using the Online Payment Agreement option available on this Web site.

Apply for an Installment Agreement

The IRS may allow taxpayers to pay any remaining balance in monthly installments through an installment agreement. Taxpayers who owe $25,000 or less may apply for a payment plan electronically, using the Online Payment Agreement application. Alternatively, taxpayers may attach a Form 9465, Installment Agreement Request, to the front of their tax return. Taxpayers must show the amount of their proposed monthly payment and the date they wish to make their payment each month. The IRS charges a $105 fee for setting up an installment agreement. The fee is reduced to $52 for those who establish a direct debit installment agreement and $43 for those with an income below a certain level (more information is available on Form 13844). Taxpayers are required to pay interest plus a late payment penalty on the unpaid taxes for each month, or part of a month, after the due date that the tax is not paid. A taxpayer who does not file the return by the due date — including extensions — may have to pay a failure-to-file penalty. More information can be found on the “Payment Plans, Installment Agreements” page on this Web site.

For more information about filing and paying taxes on this Web site, choose “1040 Central” or refer to the Form 1040 instructions or IRS Publication 17, Your Federal Income Tax. Taxpayers can download forms and publications from this Web site or request a free copy by calling toll free 800-TAX-FORM (800-829-3676).

Related Items:

Friday, April 13, 2007

Late Tax Scam Discovered; Free File Users Reminded to Use IRS.gov

Late Tax Scam Discovered; Free File Users Reminded to Use IRS.gov

IR-2007-87, April 13, 2007

WASHINGTON — The Internal Revenue Service learned late Friday of a new tax scam on the Internet that lures taxpayers into filing tax information on a site masquerading as a member of the Free File Alliance. The IRS reminded taxpayers the only place to access the Free File program is through the official IRS.gov Web site.

“The final days of the tax season always bring tax scams,” IRS Commissioner Mark W. Everson said. “Make sure you’re really dealing with the IRS. Taxpayers can feel safe using Free File, but the only way to do it is through the secure IRS.gov Web site.”

The latest twist on tax scams involves tax preparation Web sites that inaccurately say they are part of the Free File Alliance, a partnership between 19 tax software companies and the IRS. The IRS is working with the Treasury Inspector General for Tax Administration to look into allegations that the Web sites accepted tax information from taxpayers, changed the taxpayers’ bank account numbers to their own and then filed the return through a legitimate Free File partner.

Taxpayers can avoid this problem by using the official Free File site on IRS.gov. Seventy percent of the nation’s taxpayers are eligible to use the free electronic filing system.

The IRS stressed that Free File is a great way for taxpayers to get a refund quickly or schedule their tax payment for April 17. To qualify for Free File, taxpayers need to have an adjusted gross income of $52,000 or less. Ninety-five million out of the 136 million taxpayers meet this qualification.

The only way to access this program is through the IRS's Web site, IRS.gov. Click "2007 Free File" on the home page. Then, click "Start Now." Taxpayers can use the "Guide Me to a Company!" wizard to help decide which software to choose using criteria such as the state they live in, their estimated AGI and their age.

If taxpayers owe money, they can use Free File to electronically file their return on time and schedule their payment on the last possible day, April 17. As with any e-file product, Free File reassures taxpayers they have filed on time by issuing an acknowledgment from the IRS saying the return has been received.

Related Item:

FREE FILE

Modernized e-File Allows Electronic Filing of Partnership Returns

Modernized e-File Allows Electronic Filing of Partnership Returns

IR-2007-86, April 13, 2007

WASHINGTON — The Internal Revenue Service today reminded taxpayers that the new electronic platform, Modernized e-File, allows partnerships to electronically file Form 1065, U.S. Return of Partnership Income, and Form 1065-B, U.S. Return of Income of Electing Large Partnerships. Partnerships can also submit their request for extensions through Modernized e- File.

Previously, using an older IRS system known as Partnership e-File, partnerships could electronically file Form 1065, but not Form 1065-B. Modernized e-File supports the filing of both and improves the e-file experience for taxpayers and practitioners.

Since tax year 1986, the IRS has offered electronic filing of Form 1065. The existing 1065 e-File platform, Partnership e-File, uses a proprietary data transmission format. However, the Modernized e-File platform uses the Extensible Markup Language (XML) format, which is an industry-standard method of identifying, storing and transmitting data. Both e-File platforms offer improved speed and accuracy of tax return filing. But Modernized e-File offers additional benefits, including transactional processing instead of batch processing, allowance for binary file attachments, elimination of the duplicate filing of International returns and a federal/state partnership program.

Beginning with tax years ending on or after December 31, 2007, Form 1065-B must be filed electronically using the Modernized e-File system.

The e-filing of partnership returns is mandatory for most Form 1065 filers with more than 100 partners. Form 1065 may still be e-filed using the existing Partnership e-File system this year. However, beginning in January 2008, Modernized e-File will be the only e-File platform available to e-File partnership returns.

Related Items:

Thursday, April 12, 2007

IRS Offers Several Tax Payment Options

IRS Offers Several Tax Payment Options

IR-2007-85, April 12, 2007

WASHINGTON — The Internal Revenue Service today reminded taxpayers to file their tax returns by the April 17 deadline and to pay as much as they can of any taxes they owe to minimize any accrued penalties and interest.

There are also alternative payment options to consider:

  • Request an Extension of Time to Pay — Based on the circumstances, a taxpayer could qualify for an extension of time to pay. The IRS is willing to allow extensions of time to pay in order to assist in tax debt repayment. A taxpayer can request an extension from 30 to 120 days depending on the specific situation. Taxpayers qualifying for an extension of time to pay of 30 to 120 days generally will pay less in penalties and interest than if the debt were repaid through an installment agreement. Taxpayers can request an extension of time to pay using the Online Payment Agreement option available on thisWeb site.

  • Apply for an Installment Agreement — The IRS may allow taxpayers to pay any remaining balance in monthly installments through an installment agreement. Taxpayers who owe $25,000 or less may apply for a payment plan electronically, using the Online Payment Agreement application. Alternatively, taxpayers may attach a Form 9465, Installment Agreement Request, to the front of their tax return. Taxpayers must show the amount of their proposed monthly payment and the date they wish to make their payment each month. The IRS charges a $105 fee for setting up an installment agreement. The fee is reduced to $52 for those who establish a direct debit installment agreement and $43 for those with an income below a certain level (for more information, see Form 13844). Taxpayers are required to pay interest plus a late payment penalty on the unpaid taxes for each month or part of a month, after the due date that the tax is not paid. A taxpayer who does not file the return by the due date — including extensions — may have to pay a failure-to-file penalty.

  • Pay by Credit Card — Taxpayers can charge taxes on their American Express, MasterCard, Visa or Discover cards. To pay by credit card, taxpayers should contact one of the service providers at its telephone number or Web site listed below and follow the instructions. The service providers charge a convenience fee based on the amount of tax the taxpayer is paying. Taxpayers should not add the convenience fee to their tax payment.

For more information about filing and paying your taxes, choose “1040 Central” on this Web site or refer to the Form 1040 Instructions or IRS Publication 17, Your Federal Income Tax. Taxpayers can download forms and publications from this Web site or request a free copy by calling toll free 800-TAX-FORM (800-829-3676).

2007 FILING SEASON STATISTICS

Cumulative through the weeks ending 4/7/06 and 4/6/07

Individual Income Tax Returns

2006

2007

% Change

Total Receipts

87,732,000

88,581,000

1.0%

Total Processed

82,747,000

84,215,000

1.8%

E-filing Receipts:

TOTAL

57,740,000

61,345,000

6.2%

Tax Professionals

41,939,000

44,210,000

5.4%

Self-prepared

15,801,000

17,135,000

8.4%

Web Usage:

Visits to IRS.gov

102,281,000

111,215,000

8.7%

Total Refunds:

Number

71,835,000

73,622,000

2.5%

Amount

$164.499

Billion

$174.164

Billion

5.9%

Average refund

$2,290

$2,366

3.3%

Direct Deposit Refunds:

Number

46,917,000

49,935,000

6.4%

Amount

$124.366

Billion

$136.605

Billion

9.8%

Average refund

$2,651

$2,736

3.2%

Related Items:

Wednesday, April 11, 2007

IRS Completes Taxpayer Assistance Blueprint

IRS Completes Taxpayer Assistance Blueprint

IR-2007-84, April 11, 2007

WASHINGTON — The Internal Revenue Service today announced it has submitted to Congress the completed Taxpayer Assistance Blueprint. The Blueprint is the joint response of the IRS, the IRS Oversight Board and the National Taxpayer Advocate to a congressional mandate for the development of a five-year plan for the delivery of taxpayer service.

The Blueprint represents the most extensive IRS research ever conducted into the needs, preferences and behaviors of taxpayers and partners who assist them in complying with the tax laws, such as volunteer and paid tax return preparers. This research formed the foundation for the strategic plan for taxpayer service outlined in the Blueprint. The plan includes a variety of specific recommendations for improving IRS services for taxpayers and partners. Improving taxpayer service is an important part of a comprehensive strategy to reduce the “tax gap” –– the difference between the amount of tax that taxpayers pay and the amount that they owe –– by helping taxpayers understand and meet their tax obligations.

“As this filing season draws to a close, we are committed to providing good service to taxpayers and enforcing the law,” IRS Commissioner Mark W. Everson said. “This document is an important step to help us continue to improve our taxpayer services.”

To address congressional and stakeholder interests, the Blueprint was designed to:

  • Establish a taxpayer and partner baseline of needs, preferences and behaviors;
  • Create a transparent process for making service-related resource and operational decisions;
  • Develop a framework to improve service delivery; and
  • Define both short-term performance and long-term business goals and metrics to assess service value.

“The Blueprint outlines the way forward,” said Richard Morgante, Commissioner of the IRS Wage and Investment Division. “It responds to the needs of taxpayers and partners and supports the government’s compliance objectives, all within the context of our budget.”

“It is critical that the IRS understand what services taxpayers need and their preferences for receiving them,” IRS Oversight Board Chairman Paul B. Jones said. “The Taxpayer Assistance Blueprint is based on extensive research and provides a strategic five-year plan to help the IRS make the most out of its investments in taxpayer services.”

"I am pleased that the IRS recognizes the need for a taxpayer-centric approach to taxpayer service –– one that is based on sound research and observation,” National Taxpayer Advocate Nina Olson said. “The TAB is a much-needed first step to delivering this service in ways that meet taxpayer needs."

The Blueprint offers recommendations to expand, simplify, standardize and automate services, and to improve and expand technology infrastructure. It includes recommendations for increasing education and outreach to taxpayers, partners and IRS employees, and incorporating feedback from these stakeholders into future service decisions.

Link:

IRS E-File for Business Tops One Million Returns

IRS E-File for Business Tops One Million Returns

IR-2007-83, April 11, 2007

WASHINGTON — The Internal Revenue Service announced today that more than one million business taxpayers have electronically filed tax returns so far this year. Corporate e-filed returns have increased by nearly 50 percent over this period last year.

Corporations with assets of $10 million or more that file at least 250 returns (including W-2’s, 1099’s and others) are now included in the mandate to e-file. The deadline for most corporate filers was March 15, 2007.

On the day of the deadline, IRS systems successfully processed more than 200,000 business returns, of which more than 50,000 were returns of corporations. Over 400,000 (actual 414k) corporate taxpayers have e-filed their returns so far this year. Corporate returns can be thousands of pages.

More than 4,700 of the nation’s largest corporations — those with at least $50 million in assets — filed electronic returns by the due date. Nearly 6,400 of the newly mandated smaller corporations did so.

“As we did last year when we initiated the program, this year we worked with tax professionals, software developers and corporate taxpayers to remove barriers to facilitate taxpayers’ ability to comply with the mandate,” said LMSB Commissioner Deborah M. Nolan. “Our experience shows that our systems can handle simultaneous transmission of multiple complex returns.”

Corporations that operate on the calendar year can request an extension to file until September 15 and many elect to do so. This year, 634,000 taxpayers used e-file to file Form 7004 to request an extension.

Non-corporate business filers are also using e-file. Close to 185,000 (actual 185,809) businesses electronically filed their partnership returns this year. Partnerships are required to file a schedule K-1 for every partner. The IRS has received more than 1.1 million e-filed K-1s so far this year, above and beyond the million returns.

In addition, the IRS received 847 million electronically filed information returns (W-2s, W-4s, 1099s, 1098s, etc.) last year, more than 80 percent of the total 1.2 billion information returns.

Related Item: e-file for Large and Mid-Size Corporations

Tuesday, April 10, 2007

IRS Urges Taxpayers to e-file Extension Requests By April 17 Filing Deadline

IRS Urges Taxpayers to e-file Extension Requests By April 17 Filing Deadline

IR-2007-82, April 10, 2007

WASHINGTON — The Internal Revenue Service urges taxpayers who need additional time to complete their tax return to submit their request for an automatic extension electronically by April 17. E-filing an extension is convenient, safe and secure, and taxpayers receive confirmation to keep with their records.

The extension gives taxpayers until October 15 to file the tax return. An extension does not give the taxpayer an extension of time to pay. Those who owe taxes can make a payment when they file the extension either by mailing a check or by several electronic payment methods, such as electronic funds withdrawals from bank accounts and credit card payments.

IRS expects to receive 9.9 million extensions during 2007 compared with 9.5 million extensions in 2006. Of the extensions filed last year, 1.8 million were filed electronically.

Taxpayers can get an automatic six-month extension of time to file their tax returns by filing Form 4868, Automatic Extension of Time to File. Before last year, only a four-month extension was automatic and taxpayers who needed more time had to make a second request.

Taxpayers can e-file the extension from a home computer or through a tax professional who uses e-file. Taxpayers can e-file their extensions at no cost. Several companies offer free e-filing of extensions through the Free File Alliance; these companies are listed on IRS.gov.

Monday, April 9, 2007

IRS Offers Last-Minute Tips for Taxpayers

IRS Offers Last-Minute Tips for Taxpayers

IR-2007-81, April 9, 2007

WASHINGTON — With the April 17 tax filing deadline close at hand, the IRS offers some tips for those still working on their paper tax forms. Those are:

  • Consider filing electronically instead of using paper tax forms
  • Put all required Social Security numbers on the return
  • Double-check your figures
  • Sign your form
  • Attach all required schedules
  • Send your return or request an extension by the April filing deadline.

Choosing to e-file your tax return instead of preparing a paper tax form is the best step you can take to ensure that your return is accurate and complete.

When you file a paper return, the numbers to check most carefully on the tax return are the identification numbers — usually Social Security numbers — for each person listed. This includes the taxpayer, spouse, dependents and persons listed in relation to claims for the Child Care or Earned Income Tax Credits. Missing, incorrect or illegible Social Security Numbers can delay or reduce a tax refund.

Taxpayers filing paper returns should also double-check that they have correctly figured the refund or balance due and have used the right figure from the tax table.

Taxpayers must sign and date their returns. Both spouses must sign a joint return, even if only one had income. Anyone paid to prepare a return must also sign it.

People sending a payment should make the check out to “United States Treasury” and should enclose it with, but not attach it to, the tax return or the Form 1040-V, Payment Voucher, if used. The check should include the taxpayer’s Social Security number, daytime phone number, the tax year and the type of form filed.

By the April due date, taxpayers should either file a return or request an extension of time to file. Remember, the extension of time to file is not an extension of time to pay.
Forms and publications and helpful information on a variety of tax subjects are available around the clock on the IRS Web site at IRS.gov.

Related Items:

Overlooked Tax Benefits
1040 Central

Friday, April 6, 2007

Trends Show Last-minute Tax Filers Using E-file More

Trends Show Last-minute Tax Filers Using E-file More

IR-2007-80, April 6, 2007

WASHINGTON — With electronic filing running at a record pace, new Internal Revenue Service data released today shows more and more taxpayers are using e-file in advance of the April 17 tax deadline than in years past.

Historically, most e-file returns have come in during the early part of the tax season as taxpayers expecting big refunds use the service to get their refunds quickly. But new statistics show that a trend that appeared in recent years is growing this year, as more late filers abandon paper in favor of e-file. Traditionally, more late filers owe the government money and have more often used paper tax returns than e-file.

New statistics also show an increasing number of taxpayers are paying what they owe electronically — by credit card or direct debit.

“Electronic filing is more than just a quick refund,” said IRS Commissioner Mark W. Everson. “E-file is a great option for last-minute filers, because the IRS verifies that it has received your return. People who file electronically make fewer mistakes, too. That can give you real peace of mind when you’re rushing to meet the deadline.”

New IRS statistics show that while e-file is up for this year, the increase was even more significant during the month of March. Here are some of the highlights, based on statistics through March 30:

  • Overall, nearly 57 million returns have already been e-filed this year, up 5.9 percent over last year at this time. Nearly one-third of those returns were e-filed during March alone, up more than 10 percent over last March.

  • More than 16 million taxpayers have e-filed their returns from their home computers this year, an 8.3 percent increase over last year at this time. A quarter of them were e-filed in March, up 11 percent over last March.

  • The average refund this year is $2,394, up from $2,314 last year.

  • So far this year, the IRS has received nearly 4 million e-filed returns showing a balance due, up 7.6 percent over last year at this time.

More information about electronic payment options can be found on the IRS Web site at IRS.gov.

In addition, the IRS urges all taxpayers with incomes at or below $52,000 to file their returns for free using the Free File link on IRS.gov. Telephone customers can also use Free File to request this year’s one-time telephone excise tax refund.

2007 FILING SEASON STATISTICS

Cumulative through the weeks ending 3/31/06 and 3/30/07

Individual Income Tax Returns

2006

2007

% Change

Total Receipts

79,979,000

80,800,000

1.0%

Total Processed

75,697,000

77,171,000

1.9%

E-filing Receipts:

TOTAL

53,797,000

56,994,000

5.9%

Tax Professionals

38,951,000

40,910,000

5.0%

Self-prepared

14,846,000

16,084,000

8.3%

Web Usage:

Visits to IRS.gov

95,406,000

103,780,000

8.8%

Total Refunds:

Number

66,710,000

68,274,000

2.3%

Amount

$154.388

Billion

$163.431

Billion

5.9%

Average refund

$2,314

$2,394

3.4%

Direct Deposit Refunds:

Number

44,572,000

47,339,000

6.2%

Amount

$118.873

Billion

$130.331

Billion

9.6%

Average refund

$2,667

$2,753

3.2%

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Wednesday, April 4, 2007

April 17 Tax Deadline Rapidly Approaching

April 17 Tax Deadline Rapidly Approaching

IR-2007-79, April 4, 2007

WASHINGTON — The Internal Revenue Service today issued a reminder that 2006 federal tax returns must be filed, and any taxes owed must be paid, by no later than April 17, 2007.

Traditionally, the deadline for filing and paying is April 15. This year, however, taxpayers nationwide will have extra time to file and pay because April 15 falls on a Sunday and the following day, Monday, April 16, is Emancipation Day, a legal holiday in the District of Columbia.

Previously, the April 17 deadline applied just to individuals in the District of Columbia and six eastern states who are served by an IRS processing facility in Massachusetts, where the Massachusetts state holiday Patriots Day will be observed on April 16.

Under a federal statute enacted decades ago, holidays observed in the District of Columbia have impact nationwide on tax issues, not just in D.C. Under recently-enacted city legislation, April 16 is a holiday in the District of Columbia. Officials recently became aware of the intersection of the national filing day and the local observance of the new Emancipation Day holiday after most forms and publications for the current tax filing season went to print.

The April 17, 2007 deadline will apply to any of the following:

  • 2006 federal individual income tax returns, whether filed electronically or on paper.

  • Requests for an automatic six-month tax-filing extension, whether submitted electronically or on Form 4868.

  • Tax year 2006 balance due payments, whether made electronically (direct debit or credit card) or by check.

  • Tax-year 2006 contributions to a Roth or traditional IRA.

  • Individual estimated tax payments for the first quarter of 2007, whether made electronically or by check.

  • Individual refund claims for tax year 2003, where the regular three-year statute of limitations is expiring.

Other tax-filing and payment requirements affected by this change are described in IRS Publication 509, Tax Calendars for 2007, available on this Web site.

Most taxpayers will not have to change their plans in response to this announcement. Three out of four individual filers get refunds. Typically, returns claiming refunds are filed early in the tax season.

Even with the extra time, taxpayers can skip the last-minute rush and avoid needless mistakes by filing as early as possible, taking advantage of the speed and convenience of electronic filing, choosing direct deposit for any refunds and paying any taxes due by direct debit or credit card. Check this Web site for further details on electronic filing and payment options and links to companies providing these services.

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Tuesday, April 3, 2007

IRS Seeks Applicants for the Electronic Tax Administration Advisory Committee

IRS Seeks Applicants for the Electronic Tax Administration Advisory Committee

IR-2007-78, April 3, 2007

WASHINGTON — The Internal Revenue Service is seeking applicants for vacancies on the Electronic Tax Administration Advisory Committee (ETAAC) during the fall of 2007. ETAAC members are appointed by the Secretary of the Treasury and serve a three-year term.

ETAAC, a congressionally authorized panel, provides an organized public forum for discussion of electronic tax administration issues in support of a major IRS goal: paperless filing of tax and information returns. Each June, ETAAC provides an annual report to Congress recommending actions the IRS should take in electronic tax administration.

The IRS is looking for a balanced membership that includes representatives from tax practitioners and preparers, large and small business owners, transmitters of electronic returns, tax software developers, academic (marketing, sales or technical perspectives), and financial industry (payers, payment options and best practices).

Applicants should submit a resume and complete Form 13768, Electronic Tax Administration Advisory Committee (ETAAC) Membership Application available on IRS.gov.

A notice published in the Federal Register dated March 15, 2007, contains more details about ETAAC and the application process. In addition, all applicants for final consideration will have their income tax records reviewed for currency of tax return filing and payment, as well as undergo a background review by the Federal Bureau of Investigation (FBI).

Applications will be accepted through April 30, 2007.

Applications can be submitted via email ETAAC@irs.gov, mailed to Internal Revenue Service, ATTN: Cassandra Daniels, 5000 Ellin Rd C4-226 SE:W:ETA:S:RM , Lanham, MD 20706, or by fax to 202-283-4829 (not a toll-free number).

Related Items:

ETAAC Application Form
ETAAC Information Sheet
ETAAC Article

IRS Urges Taxpayers to Avoid Common Mistakes

IRS Urges Taxpayers to Avoid Common Mistakes

IR-2007-77, April 3, 2007

WASHINGTON — The Internal Revenue Service today urged taxpayers to review their tax returns for common errors that could delay the processing of their return and refund.

Here are some ways to avoid common tax return errors:

  • File electronically. If you choose to e-file, many of the common errors are avoided or corrected by the computer software. If your income is under $52,000 you may be able to e-file for free using IRS Free File.

  • Use the peel-off label if you choose to mail a paper return. You may line through and make necessary corrections right on the label. Be sure to fill in your Social Security number in the box provided on the return. If you do not have a peel-off label, fill in all requested information clearly, including the Social Security numbers.

  • Check only one filing status on the tax return and check the appropriate exemption boxes. Enter the correct Social Security numbers for each of those exemptions.

  • Use the correct Tax Table column for your filing status.

  • Double check all figures on the return. Math errors are common mistakes.

  • Make sure that the financial institution routing and account numbers you have entered on the return for a direct deposit of your refund are accurate. Incorrect numbers can cause the refund to be delayed or misdirected.

  • Sign and date the return. If filing a joint return, both spouses must sign and date the return.

  • Attach all Forms W-2, Wage and Tax Statement, and other forms that reflect tax withheld to the front of the return. Attach all other necessary forms and schedules.

  • Remember to request the Telephone Excise Tax Refund. Don’t short-change yourself, most households are eligible for a special one-time only Telephone Tax Refund, typically between $30-$60, that can be requested on the 2006 tax return.

  • Do you owe tax? If so, enclose a check or money order made payable to the “United States Treasury” and Form 1040-V, Payment Voucher, if used. Or, you may choose to pay by credit card by contacting one of the credit card service providers.

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IRS Seeks Nominations for Information Reporting Program Advisory Committee

IRS Seeks Nominations for Information Reporting Program Advisory Committee

IR-2007-76, April 3, 2007

WASHINGTON — The Internal Revenue Service is requesting membership nominations for the Information Reporting Program Advisory Committee. The deadline for submitting applications is May 31, 2007.

Established in 1991, IRPAC provides recommendations to IRS leadership on a wide range of information reporting and administration issues. The committee presents a report to the commissioner of the IRS each year at a public meeting in the fall.

In order to effectively advise the IRS commissioner and executives, members are drawn from substantially diverse backgrounds. Members include representatives of the taxpaying public, the tax professional community, small and large businesses, colleges and universities, state tax administrations, banks, the insurance industry and the payroll community.

IRPAC is comprised of up to 23 members who are appointed to three-year terms by the commissioner. Each year, approximately one-third of the membership terms expire. Nominations are currently being accepted for up to eight appointments that begin January 2008.

Interested parties may nominate themselves or a qualified person for membership. All nominees must complete an application and federal tax check waiver form. In addition, FBI background checks using fingerprints and, if applicable, practitioner checks are required of all nominees.

More information, including application packages, is available on the Tax Professional’s Page on the IRS's Web site, IRS.gov. Questions about the nomination process can be sent to the following e-mail address: *public_liaison@irs.gov.

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Information on IRPAC

Monday, April 2, 2007

IRS Warns of Phony e-Mails Claiming to Come from the IRS

IRS Warns of Phony e-Mails Claiming to Come from the IRS

IR-2007-75, April 2, 2007

WASHINGTON — The Internal Revenue Service today alerted taxpayers about Internet scams in which fraudulent e-mails are sent that appear to be from the IRS.

The e-mails direct the consumer to a Web link that requests personal and financial information, such as Social Security, bank account or credit card numbers. The practice of tricking victims into revealing private personal and financial information over the Internet is known as “phishing” for information.

The IRS does not send out unsolicited e-mails or ask for detailed personal and financial information. Additionally, the IRS never asks people for the PIN numbers, passwords or similar secret access information for their credit card, bank or other financial accounts.

The information fraudulently obtained by scammers is used to steal the taxpayer’s identity and then his or her financial assets. Generally, identity thieves use someone’s personal data to steal his or her financial accounts, run up charges on the victim’s existing credit cards, apply for new loans, credit cards, services or benefits in the victim’s name and even file fraudulent tax returns to obtain refunds rightfully belonging to the victim.

“Don’t be fooled by these shameless scam artists. The IRS doesn’t send unsolicited e-mail,” said IRS Commissioner Mark W. Everson. “Always exercise caution when you receive unsolicited e-mails or e-mails from senders you don’t know, and always verify the source.”

Last year, the IRS established an electronic mail box, phishing@irs.gov, to receive copies of possibly fraudulent e-mails involving misuse of the IRS name, logo or Web site for investigation. Since the establishment of the mail box, the IRS has received more than 17,700 e-mails from taxpayers reporting more than 240 separate phishing incidents. To date, investigations by the Treasury Inspector General for Tax Administration (TIGTA) have identified host sites in at least 27 different countries, as well as in the United States.

In the on-going e-mail schemes that use the IRS name, about which the IRS has warned the public before, the recipients are asked to click on links to take them to the “IRS” Web site. The links appear authentic and connect the victim to sites that resemble the genuine IRS Web site. The sites then prompt the victim for personal identifiers, credit card numbers, PIN numbers or similar financial information. The phony sites appear legitimate because most of the images and content are copied from actual pages on the genuine IRS Web site before being modified by the fraudsters to include their loaded questions.

The schemes have a few variations. In one, the bogus e-mail tells the recipient that he or she is eligible to receive a federal tax refund for a given amount (often $63.80) and sends the recipient to a Web site to complete a form to “submit the tax refund request.” The form then asks for the personal and financial information.

The IRS does not notify taxpayers of refunds via e-mail. Additionally, taxpayers do not have to complete a special form or provide detailed financial information to obtain a refund. Refunds are based on information contained on the federal income tax return filed by the taxpayer.

In another scheme, the e-mail states that the IRS’s “Antifraud Comission” (sic) has found that someone tried to pay their taxes through the Electronic Federal Tax Payment System, or EFTPS, using the e-mail recipient’s credit card and that, as a result, some of the recipient’s money was lost and the remaining “founds” (sic) were blocked. The e-mail contains visual elements copied from the genuine IRS Web site in an attempt to make the e-mail appear legitimate. The e-mail includes a link that sends the recipient to a Web site that asks the recipient to enter personal and financial information, such as SSN and account numbers, in order to unblock their funds.

The IRS does not have an Antifraud Commission, does not have the authority to freeze a taxpayer’s credit card or bank account because of potential theft or fraud perpetrated against the taxpayer, and does not use e-mail to initiate contact with taxpayers.

A third, recent scheme asks the recipient to wire thousands of dollars in order to retrieve the winnings on a lottery. One such e-mail instructed the recipient to wire $42,000 to retrieve the winnings on a British lottery. This e-mail used a simulated IRS letterhead with the actual address of an IRS office at 290 Broadway, Manhattan, NYC, in an attempt to persuade the recipient of the legitimacy of the e-mail.

The IRS does not handle lottery distributions and does not initiate contact with taxpayers via e-mail. Additionally, lottery winnings are generally reported by the winner to the IRS with his or her annual federal income tax return, at which time any taxes due must be paid.

Recipients of questionable e-mails claiming to come from the IRS should not open any attachments or click on any links contained in the e-mails. Instead, they should forward the e-mails to phishing@irs.gov (the instructions may be found on IRS.gov by entering the term phishing in the search box) or notify TIGTA’s toll-free hotline at 1-800-366-4484. The IRS and TIGTA work with the U.S. Computer Emergency Readiness Team (US-CERT) and various Internet service providers and international CERT teams to have the phishing sites taken offline as soon as they are reported.

Recently, the IRS has become aware of commercial Internet sites that bear a striking resemblance to the real IRS site or that contain the some form of the IRS name in their address but with a .com, .net, .org or other designation in the address instead of .gov. Though these sites may not be phishing sites — that is, they may not request private financial data in an attempt to steal the consumer’s identity — the IRS urges consumers not to be misled into thinking such sites are the genuine IRS Web site or have some connection to the real IRS.

The only genuine IRS Web site is IRS.gov.

More information on phishing schemes and others, including abusive tax avoidance transactions, frivolous arguments and more, may be found on the Compliance and Enforcement page on this Web site. For information on preventing or handling the aftermath of identity theft, visit the Federal Trade Commission (FTC) ’s Web site.

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