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March 04, 1993
File Returns Now -- Beat the Late Season Rush
WASHINGTON - Mid-way through the 1993 tax season, the
Internal Revenue Service reports a slower than usual tempo of tax filings. At the end of
February, IRS centers had received 37.4 million returns, over three million (eight
percent) fewer than at this time last year.
The filing pace could be sluggish this year for several reasons. One could be that
taxpayers have roughed out their returns and are finding smaller-than expected refunds or
even balances due.
For many taxpayers, these reduced refunds or unexpected tax bills are the result of
automatic adjustments made to withholding rates in March 1992. The impact of those changes
was to move a part of the taxpayer's 1992 tax refund into each paycheck last year. While
the total tax was not affected, the withholding adjustments caused certain taxpayers to
have less withheld during the year.
The IRS offered some advice to taxpayers who may be putting off mailing their returns.
- Increase your 1993 tax withholdings right now if you find that your refund is smaller
than you expected or if you owe a balance for 1992;
- Don't delay filing to get any refund you are due. Processing takes longer later in the
filing season but the average time is about four weeks right now.
- If you find that you cannot pay the balance due, you can file now and ask the IRS to
consider an installment plan to begin paying off what you owe as soon as possible.
It is always a good idea to review the amount of tax withholding each year. It is
especially important this year if your 1992 withholding was inadequate. Make withholding
adjustments by filing a new withholding allowance certificate, Forms W-4, with your
employer. The 1993 version of the form is available from employers or by calling the IRS
(toll free) at 1-800-TAX-FORM.
People who cannot pay the full amount may want to ask for an installment agreement.
This would allow them to pay the taxes-- plus interest and penalties -- over a period of
time. Since these charges are added to the tax due, taxpayers should explore other ways to
pay, such as using savings or getting a loan.
But asking the IRS for an installment agreement is an option and is preferable to not
filing the return because of a BALANCE due. Missing the April 15 filing deadline would
result in even higher penalties.
A taxpayer can request an installment agreement by attaching the new Form 9465,
Installment Agreement Request, to the front of the tax return or even by including a note
with the return explaining the situation. The IRS will respond within 30 days.
Although the gap between this year's filings and last year's is narrowing, the
end-of-February total is the lowest of the past five years, in spite of constant growth in
the total number of returns filed each year.
For those who did file early, the average refund has been up slightly -- $1,078 as of
February 26, a 2.8 percent increase. This small rise is due to the growth in early
electronic filings, which typically have higher average refunds than paper returns.
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