February 18, 1993
IRS Debunks Tax Myths
WASHINGTON - There's just one problem with some of the
"tax wisdom" you may hear each filing season -- it's dead wrong, according to
the Internal Revenue Service.
For example, some people claim that early filers are more likely to be audited, but,
in fact, when you file has no effect on your tax return's chances for being audited. IRS
computers score every return based on the various entries and their relationship to one
another. These scores are the primary means of selecting returns for examination.
Programmers develop the formulas for this system before the tax year starts and apply them
to all returns that year. A return filed in February gets the same score as it would get
if filed in June.
Last year, less than half of the returns had the name label from the filer's tax
package attached. In some cases, this may have resulted from a mistaken belief that the
label is linked to audit selection. Infact, the label has no secret codes -- the tax
instructions even have an illustration explaining all the label's contents. Use of the
label helps reduce the chance for error and cuts the processing cost.
Some say that tax law is so complex that most people need professional help. In fact,
just over half of all taxpayers prepare their own returns. IRS efforts to simplify the
forms made the short form 1040A available to senior citizens in 1991 and this year offered
Form C-EZ for qualifying small business owners to report their profits. For those doing
their own returns, the IRS offers both live assistance and recorded tax tapes -- check the
tax form instructions for details.
Another myth is that calling the IRS tax help line will make the agency look closer at
your return. In fact, IRS assistors do not ask callers their names or social security
numbers, unless needed to resolve a tax account matter.
Some think that you must be a minimum age before you file a tax return, or that once
you reach a certain age you can stop filing. Still others think that once you file, you
must keep filing if you have any income. In fact, there are specific income thresholds
that determine whether you must file, depending on your filing status. The amounts change
each year because of inflation adjustments and are higher for those 65 or over. Over a
million low income tax returns are filed unnecessarily each year, with the largest group
coming from 65 or older.
As of Feb. 12, the IRS had received nearly 24 million returns, down 10 percent from the
same time last year, and had sent out over 6 million refunds. At $1,140, the average
refund is up 1.6 percent.
1993 FILING SEASON STATISTICS
Cumulative through the week ending 2/14/92 and 2/12/93
1992 1993 % Change
Individual Income Tax Returns
Receipts 26,439,000 23,707,000 -10.3
Processed 14,098,000 13,229,000 -6.2
Filing Alternatives -- Total Receipts:
Electronic Filing 6,229,000 7,019,000 12.7
1040PC Format 183,000 529,000 189.9
Telefile 88,000 97,000 10.2
Refunds Certified by the NAtional Computing Center:
Number 6,513,000 6,304,000 -3.2
Amount of principle $7.305 billion $7.186 billion -1.6
Average Refund $1,122 $1,140 1.6
(NOTE: these amount should NOT be compared to the "processed"
numbers above, since those figures reflect Service
Center processing, which is completed at least a week
before refunds are certified at the Computing Center)
Taxpayer Service Filing Season Statistics
through 2/15/92 through 2/13/93
Toll free calls
answered 6,400,327 6,199,287
Tele-Tax calls 4,604,598 5,037,603
Technical tapes 1,743,997 1,845,416
Refund Info. 2,860,601 3,192,187
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