2007 Tax Season Sets Records for E-file, Direct Deposit, IRS.gov

2007 Tax Season Sets Records for E-file, Direct Deposit, IRS.gov

IR-2007-100, May 15, 2007 WASHINGTON — The recently completed 2007 tax filing season set a number of electronic records, highlighted by over 76 million electronically-filed individual tax returns and more than 140 million visits to IRS.gov, the Internal Revenue Service said today. “E-file and our other electronic services helped us deliver a strong filing season for the nation’s taxpayers,” said IRS Acting Commissioner Kevin M. Brown. “Again this year, millions of additional taxpayers gave up paper tax returns to file electronically. E-file and IRS.gov were among several factors that helped us overcome one of the most challenging filing seasons ever for the IRS.” This year’s tax season saw a surge in electronic filing among last-minute filers, a group that has traditionally sent in paper returns. During the week that included this year’s tax-filing deadline (April 14 to 20) alone, the number of electronically-filed returns received by the IRS jumped 35 percent over the same week last year, even though the overall number of returns (paper and electronic) received during the same week only rose 12 percent. New records were also set for the number of returns e-filed by home computer users, the number of balance-due returns filed electronically and the number and amount of direct-deposit refunds. Among the highlights of new statistics released today: The over 76.7 million e-filed returns accepted through May 4 topped the more than 73.2 million electronically-filed returns received for all of 2006. It’s also an 8.9 percent increase over last year at this time, with most of the increase coming in March and April. Based on current trends, the agency expects about 58 percent of all returns to be e-filed this year. Taxpayers who filed for extensions can use e-file until Oct. 15. A record 22 million taxpayers e-filed from a home computer, up 11 percent over the same time last year and eclipsing 2006’s year-long total of 20.3 million. This filing season visits to IRS.gov, the agency’s popular Web site, climbed almost 10 percent to more than 140 million. The average refund this year is $2,255, a 2.5 percent increase over last year at this time. More than 59 million refunds, a new record, were deposited directly into savings, checking and brokerage accounts, representing more than 61 percent of all refunds issued. Those who choose direct deposit get their refunds at least a week sooner. Available year-round, direct deposit eliminates the chance of a lost, stolen or undeliverable refund. Taxpayers claiming refunds who have not yet filed may want to consider using direct deposit to get a head start on their 2007 IRA contribution. Nearly $158 billion have been directly deposited so far this year, an 11 percent jump over last year at this time. This surpasses the 2006 year-end total of $149.2 billion. The number of balance-due returns filed electronically surged 14.2 percent to a record 9.4 million. For all of last year, almost 8.9 million balance-due returns were filed electronically. 2007 FILING SEASON STATISTICS Cumulative through the weeks ending 5/5/06 and 5/4/07 Individual Income Tax Returns 2006 2007 % Change Total Receipts 124,383,000 127,959,000 2.9% Total Processed 110,558,000 114,122,000 3.2% E-filing Receipts: TOTAL 70,501,000 76,771,000 8.9% Tax Professionals 50,624,000 54,693,000 8.0% Self-prepared 19,877,000 22,078,000 11.1% Web Usage: Visits to IRS.gov 127,580,000 140,159,000 9.9% Total Refunds: Number 92,612,000 96,266,000 3.9% Amount $203.685 Billion $217.066 Billion 6.6% Average refund $2,199 $2,255 2.5% Direct Deposit Refunds: Number 54,848,000 59,217,000 8.0% Amount $142.028 Billion $157.880 Billion 11.2% Average refund $2,590 $2,666 3.0% 2007 FILING SEASON STATISTICS Cumulative through the weeks ending 4/21/06 and 4/20/07 Individual Income Tax Returns 2006 2007 % Change Total Receipts 122,721,000 124,965,000 1.8% Total Processed 102,148,000 105,159,000 2.9% E-filing Receipts: TOTAL 70,069,000 76,159,000 8.7% Tax Professionals 50,329,000 54,324,000 7.9% Self-prepared 19,740,000 21,835,000 10.6% Web Usage: Visits to IRS.gov 121,635,000 133,496,000 9.8% Total Refunds: Number 85,151,000 88,168,000 3.5% Amount $190.521 Billion $203.021 Billion 6.6% Average refund $2,237 $2,303 2.9% Direct Deposit Refunds: Number 53,056,000 57,155,000 7.7% Amount $138.304 Billion $153.486 Billion 11.0% Average refund $2,607 $2,685 3.0%

Many Churches, Nonprofits Qualify for Telephone Tax Refund

Many Churches, Nonprofits Qualify for Telephone Tax Refund

IR-2007-99, May 11, 2007 WASHINGTON — Churches, charities and other tax-exempt organizations that paid the federal excise tax on long-distance or bundled telephone service qualify for this year’s one-time telephone excise tax refund, according to the Internal Revenue Service. With the annual May 15 filing deadline fast approaching for many nonprofits, the IRS urges any of these organizations that paid the 3 percent tax to be sure to request this special refund. The telephone tax refund is also available to churches and small tax-exempt organizations that don’t normally file annual returns with the IRS. The government stopped collecting the long-distance excise tax last August after several federal court decisions held that the tax does not apply to long-distance service as it is billed today. Federal officials also authorized a one-time refund of the 3 percent tax collected on long-distance or bundled service billed after Feb. 28, 2003, and before Aug. 1, 2006. The tax continues to apply to local-only phone service. Organizations can request the refund by filing Form 990-T, Exempt Organization Business Income Tax Return and attaching Form 8913, Credit for Federal Telephone Excise Tax Paid. Organizations that obtain a credit or refund from their service providers are not eligible to file a refund request with the IRS. If your church or organization paid the tax, here are some tips to help you figure the refund correctly and get it quickly: Start by filling out Form 8913. This form is used to figure the refund, including interest. Current interest factors for corporations, including tax-exempt organizations, can be found on the telephone excise tax refund page on IRS.gov. You have two choices for figuring the refund. Base your request on the actual amount of tax paid on service billed from the beginning of March 2003 to the end of July 2006, using your phone bills or other records, or estimate the amount of tax paid using a worksheet included in the instructions for Form 8913. Choosing to use the estimation worksheet may save time and paperwork, especially if you lack ready access to complete phone records for the past few years. If you file Form 990, Return of Organization Exempt From Income Tax, the amount you entered for telephone expense on Line 34 may help you figure the credit. Publication 4589, TETR for Exempt Organizations, helps explain these calculations. Carry the total amount figured on Form 8913 to Form 990-T, Line 44f. Follow the instructions for completing the rest of Form 990-T. Normally, Form 990-T is used by organizations to report business activities unrelated to their tax-exempt purpose and figure the tax on these activities. If, like most organizations, you do not engage in unrelated business activities, you can just complete the top section (above Part I) of Form 990-T. Be sure to write, “Request for TETR Credit” on the top of the form. Many cell phone customers mistakenly believe they are not eligible for the telephone tax refund. The refund is normally available to cell phone users, as well as land-line, fax and Internet phone customers. The method of phone signal transmission does not affect the refund. The refund applies to the federal excise tax paid on both long-distance and bundled telephone service. Bundled service is local and long-distance service provided under a plan that does not separately list the charge for local service. Bundled service includes, for example, phone plans that provide both local and long-distance service for either a flat monthly fee or a charge that varies with the time for which the service is used. It is the type of service provided by many cell phone companies. When figuring the refund, do not count amounts paid for prepaid phone cards and prepaid cell phones. Ordinarily, the customer is not liable for the federal excise tax on prepaid cards and phones and thus, not eligible to request the refund. If you’re not sure whether you paid the tax, check the portion of your telephone bill that relates to long-distance or bundled service. Service providers use a number of different terms to identify the tax. Phrases to look for on English-language phone bills include: Federal, Federal Excise 3%, Federal Excise @ 3%, Federal Excise Tax, Federal Tax, Fed Excise Tax and FET; Spanish-language phone bills; Impuesto Indirecto Federal and Impuesto federal. Typically, this federal tax amount is not commingled with any other tax or surcharge on a customer's bill. In other words, it is normally shown as a separate line item. For information about accessing old phone records from various service providers, visit the “telephone companies” link on the Telephone Excise Tax Refund page of this Web site.. Use the Telephone Excise Tax Refund page on this Web site. Here, you can download forms and find answers to frequently-asked questions. You can also find special instructions for nonprofit hospitals, schools and government agencies that may have paid federal telephone taxes in error, as well as alternate procedures for political organizations. Related Items: Form 990-T, Exempt Organization Business Income Tax Return Form 990-T Instructions Form 8913, Credit for Federal Telephone Excise Tax Paid Form 8913 Instructions Form 990, Return of Organization Exempt from Income Tax Form 990 Instructions Publication 4589, TETR for Exempt Organizations Telephone Excise Tax Refund Interest Factors

Deadline for Submitting Clean Coal Allocation Requests Remains June 30

Deadline for Submitting Clean Coal Allocation Requests Remains June 30

IR-2007-98, May 9, 2007 WASHINGTON — Applications for the 2007 allocation for clean coal projects are due to the Department of Energy (DOE) on or before June 30, 2007. Contrary to the expectation in an earlier information release (IR-2006-184), the Internal Revenue Service no longer expects to change the deadline to June 1. The Energy Policy Act of 2005 authorized $1.65 billion in tax credits for clean coal projects. Approximately $650 million of this amount is available for allocation to clean coal projects in 2007. Of this total, $267 million will be available for integrated gasification combined cycle (IGCC) sub-bituminous coal projects, $133 million will be available for IGCC lignite projects, $250 million will be available for non-IGCC advanced coal electricity generation projects and $337,000 will be available for gasification projects. IRS Notices 2006-24 and 2006-25 provide complete instructions for submitting an application for the 2007 credit allocation. Under those notices, the application for DOE certification for the 2007 allocation is due to the DOE on or before June 30, 2007.

Nissan Hybrid Still Qualifies for Tax Credit

Nissan Hybrid Still Qualifies for Tax Credit

IR-2007-97, May 7, 2007 WASHINGTON — The Internal Revenue Service announced that purchasers of qualified Nissan North America Inc. vehicles may continue to claim the Alternative Motor Vehicle Credit. The announcement comes after the IRS concluded its quarterly review of the number of hybrid vehicles sold. Nissan sold 2,094 qualifying vehicles to retail dealers in the quarter ending March 31, 2007. The allowable credit amount for the 2007 Altima Hybrid — Nissan’s only certified hybrid vehicle — is $2,350. Consumers seeking the credit may want to buy early because the full credit is only available for a limited time. Taxpayers may claim the full amount of the allowable credit up to the end of the first calendar quarter after the quarter in which the manufacturer records its sale of the 60,000th vehicle. For the second and third calendar quarters after the quarter in which the 60,000th vehicle is sold, taxpayers may claim 50 percent of the credit. For the fourth and fifth calendar quarters, taxpayers may claim 25 percent of the credit. No credit is allowed after the fifth quarter.

Phase-Out of Credit for Toyota and Lexus Hybrids Continues With Reporting of First Quarter Sales

Phase-Out of Credit for Toyota and Lexus Hybrids Continues With Reporting of First Quarter Sales

IR-2007-96, May 2, 2007 WASHINGTON — After reviewing Toyota Motor Sales USA, Inc.’s, 2007 first quarter sales, the Internal Revenue Service announced that purchasers of Toyota and Lexus vehicles may continue to claim the Alternative Motor Vehicle Credit. Based on the number of vehicles sold, the phase-out period for Toyota vehicles began on Oct. 1, 2006. Toyota sold 61,369 qualifying vehicles to retail dealers in the quarter ending March 31, 2007. This brings the cumulative sales of qualified Toyota hybrid vehicles sold from the period of Jan. 1, 2006, through March 31, 2007, to 273,442. Taxpayers may claim the full amount of the credit up to the end of the first calendar quarter after the quarter in which the manufacturer records its sale of the 60,000th qualified vehicle. For the second and third calendar quarters after the quarter in which the 60,000th vehicle is sold, taxpayers may claim 50 percent of the credit. For the fourth and fifth calendar quarters, taxpayers may claim 25 percent of the credit. No credit is allowed after the fifth quarter. The sale of Toyota’s 60,000th qualified vehicle occurred in the quarter ending June 30, 2006. The applicable credit amounts are as follows: Qualifying Vehicle Full Credit When Purchased By 9/30/06 Reduced Credit When Purchased From 10/1/06 through 3/31/07 Reduced Credit When Purchased From 4/1/07 through 9/30/07 Beginning 10/1/07 05, 06 and 07 Toyota Prius $3,150 $1,575 $787.50 $0 06 and 07 Toyota Highlander 2WD and 4WD $2,600 $1,300 $650 $0 07 Toyota Camry Hybrid $2,600 $1,300 $650 $0 06 and 07 Lexus RX 400h 2WD and 4WD $2,200 $1,100 $550 $0 07 Lexus GS450h $1,550 $775 $387.50 $0

GM Hybrids Still Qualify for Tax Credit

GM Hybrids Still Qualify for Tax Credit

IR-2007-95, May 2, 2007 WASHINGTON — The Internal Revenue Service announced that purchasers of qualified General Motors Corp. hybrid vehicles may continue to claim the Alternative Motor Vehicle Credit. GMC sold 2,927 qualifying vehicles to retail dealers in the quarter ending March 31, 2007. This brings the cumulative number of qualified GM hybrid vehicles sold to 8,485. The credit amount and make and model of qualified vehicles sold are: Chevrolet Silverado Hybrid 2WD, Model Years 2006 and 2007 $250 Chevrolet Silverado Hybrid 4WD, Model Years 2006 and 2007 $650 GMC Sierra Hybrid 2WD, Model Years 2006 and 2007 $250 GMC Sierra Hybrid 4WD, Model Years 200 and 2007 $650 Saturn Vue Green Line, Model Year 2007 $650 Saturn Aura Hybrid, Model Year 2007 $1,300 Purchasers of GMC’s qualified vehicles may continue to rely on the certifications concerning the vehicles’ qualification for the credit. Consumers seeking the credit may want to buy early because the full credit is only available for a limited time. Taxpayers may claim the full amount of the allowable credit up to the end of the first calendar quarter after the quarter in which the manufacturer records its sale of the 60,000th vehicle. For the second and third calendar quarters after the quarter in which the 60,000th vehicle is sold, taxpayers may claim 50 percent of the credit. For the fourth and fifth calendar quarters, taxpayers may claim 25 percent of the credit. No credit is allowed after the fifth quarter.

IRS Draft Form 1120-F and New Schedule M-3 (1120-F) Now Available for Public Comment

IRS Draft Form 1120-F and New Schedule M-3 (1120-F) Now Available for Public Comment

IR-2007-94, May 1, 2007 WASHINGTON — The Internal Revenue Service has issued for public comment draft versions of the revised Form 1120-F, U.S. Income Tax Return of a Foreign Corporation, for tax year 2007 and related schedules, including Schedule M-3, new for 2007. Taxpayers with $10 million or more in total reportable assets filing Form 1120-F for tax years ending on or after Dec. 31, 2007 will be required to file Schedule M-3. Three other new schedules for Form 1120-F include: Schedule H, Deductions Allocated To Effectively Connected Income Under Regulations Section 1.861-8 Schedule I, Interest Expense Allocated Under Regulations Section 1.882-5 Schedule P, List of Foreign Partner Interest in Partnerships The new schedules will provide for increased disclosure of information regarding such items as allocable interest expense and home office deductions, as well as effectively- and non-effectively-connected income that is included in Form K-1 reported by a partnership to a foreign corporate partner and that is reportable by the partner on Form 1120-F. The new schedules also provide a consistent reporting format for all taxpayers. In addition, Schedules M-1 and M-2, previously included in Form 1120-F, are now separate forms. Schedule M-1, Reconciliation of Income (Loss) per Books with Income per Return is used by corporations with assets under $10 million. Schedule M-2, Analysis of Unappropriated Retained Earnings per Books, is used by all asset size corporations. The draft Form 1120-F and related schedules are available on this Web site. Comments should be submitted by May 25, 2007, via e-mail to SchM3@irs.gov. Related Item: Draft Forms and Schedules