Less Extensions, But More Individual Returns

Fewer taxpayers this year asked for automatic extensions of time to file their returns than the Internal Revenue Service had anticipated, and more taxpayers used the standard deduction this year instead of itemizing.

These are two of the findings reported by the IRS after the 1989 tax processing season.

The IRS says that it received almost ten percent fewer requests for extension of time to file a return than it did last year. As of May 26, 1989, only 5 million taxpayers filed Form 4868, which is used to request the automatic extension, compared to the 5.7 million received last year and the 6 million the IRS expected.

On the other hand, the IRS received a record number of individual income tax returns this year. As of June 2, taxpayers had filed over 105 million returns, up three percent from the 102 million filed by the same point last year.

More taxpayers are filing simpler returns this year, too. Receipts of the two shorter forms -- 1040A and 1040Ez -- were up over six percent each from last year. Receipts of Form 1040 were up only a little over one percent, but the percentage of Forms 1040 with itemized deductions decreased by over three percent.

Almost 1.2 million refund returns were filed electronically this year, up 99 percent over last year. Electronic filing, an option for taxpayers in 36 states this year, will be available in all 50 states next year.

More taxpayers received refunds this year. As of June 1 the IRS authorized almost 71 million refunds to be mailed to taxpayers, up slightly from the 70.3 million last year. The average refund is smaller this year, however: $858 compared to $870 for the year.

The IRS said that certain filing trends emerged this year, based on samplings done on returns during the filing season. Elderly taxpayers tended to file somewhat later in the filing period, while returns for those who could be claimed as dependents came in somewhat earlier, the IRS said.

Use of the official IRS envelope decreased very slightly -- from 65.5 percent last year to 64.7 percent this year of returns being sent in the IRS envelopes -- while about the same percentage of taxpayers used their labels on the returns this year as had done so in the past -- about 54 percent. Returns with paid preparer signatures also stayed about the same, 46.9 percent of returns this year compared to 47 percent last year.

Finally, more people than ever took advantage of free telephone services offered by the IRS. Almost 23 million calls were received over the toll-free phone lines set up to answer specific taxpayer questions. Over 25 million calls came in to use the Tele-Tax system of recorded tax messages or to check the status of refunds.

1989 Filing Season Statistics

Individual income tax returns received and processed

Cumulative through June 3, 1988, and June 2, 1989:

                                                Percent
                   1988            1989         Change
Receipts        102,010,000    105,041,000       3.0
Processed       88,887,000      91,388,000       2.8

Electronically filed individual income tax returns

     Cumulative for 1989 since Jan. 1:        1,159,001
     Cumulative for 1988 for same period:      583,077
     1989 increase over 1988:                   98.8%

Refund comparison

     Refunds certified by Martinsburg Computing Center through
June 2, 1988, and June 1, 1989:

                                                      Percent
                       1988              1989         Change
Number               70,324,000       70,603,333       0.4
Amount of Principal $61,154 million  $60,553 million  -1.0
Average refund        $869.61           $857.66       -1.4

Taxpayer Service filing season statistics

                   1/1/88 - 6/4/88    1/1/89 - 6/3/89
Toll-free phone     23.9 million        22.7 million
calls answered
Tele-Tax calls      11.7 million        25.5 million

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