April 06, 1994
Millions Find Other Ways to File Tax Returns
WASHINGTON - So far this year, nearly one out of every four
taxpayers used an alternative way of filing--either electronic
filing, the 1040PC format, or TeleFile. According to the Internal
Revenue Service, the only traditional tax form holding at last
year's level is the 1040EZ, which married couples can use for the
first time this year.
Electronic filing is the most frequently used alternative--at
12,371,000 returns, it has already surpassed the total for all of
last year. Over 1 million electronic filings have been combined
federal/state returns. Taxpayers in 23 states can transmit the data
for both returns to the IRS, which then provides the state
information to the state tax authorities.
Three states account for almost three-fourths of the
federal/state electronic returns: New York (158,000), North
Carolina (317,000) and South Carolina (272,000). South Carolina,
where the concept was originally tested, is offering federal/state
electronic filing statewide for the third year. This is North
Carolina's second year of statewide availability, and New York's
Both home computer user and professional preparers can use
accepted software to print the 1040PC, a "condensed" tax return.
The 1040PC omits all the blanks and prints only the line numbers and
entries, in a three-column format. This results in a more accurate
return that is easier for IRS data transcribers to process. The
1040PC also allows refunds to be deposited directly into taxpayers'
TeleFile, the file-by-phone system, is now available in seven
states, after being tested in Ohio the last two years. TeleFile is
limited to single taxpayers who received a special tax package, have
not moved and would otherwise file Form 1040EZ. A taxpayer used a
touch-tone phone to enter the income and withholding amounts, then
the system figures the tax and any refund or balance due. The call
takes about five minutes.
After completing the call, the taxpayer signs a Form 1040-TEL,
attaches to any W-2 forms and sends these to the IRS. In Southern
Ohio, the IRS is testing a "voice signature" with TeleFile,
eliminating the need for taxpayers to mail signature and wage forms
to the IRS. A payment may be sent with Form 1040-TEL or separately
with a voucher from the tax package.
As of April 1, the IRS had received nearly 62 million returns
and processed over 43 million refunds, worth $44.6 billion. At
$1,028, the average refund is up 5.8 percent over this time last
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