Taxpayers Using IRS Filing Alternatives

WASHINGTON - This year the Internal Revenue Service is offering alternative ways for some taxpayers to file their tax returns. Even though it's still early in the filing season, filing by telephone -- Telefile -- is the most popular alternative so far.

Telefile -- limited to Ohio residents who received a special Form 1040EZ tax package -- is one of two filing alternatives the IRS is testing this year. After only three weeks of the filing season 35,000 taxpayers have filed their returns by phone. THe tests will measure the technical feasibility and public acceptance of alternatives to paper filing.

By the end of January, the IRS had received 7 million tax returns, nearly 2 million of them electronically. Electronic filing -- first tested in 1986 -- has been an operational part of the IRS processing system since 1988. It provides a quicker receipt of tax refunds and can now be used for balance due returns also. Electronic filing is available from many preparers and transmission services which the IRS has accepted into the program. The IRS received 7.5 million electronic returns last year and expects 10 million this year.

Another filing alternative this year is the 1040PC option, which features a computer-printed answer sheet in place of the usual forms and schedules. Taxpayers have filed 27,000 of these returns so far.

The IRS is also testing Form 1040EZ-1, in which taxpayers report their interest income and send their W-2s for the IRS to figure their tax and any refund or balance due. Over 300,000 Rhode Island, Texas and Washington taxpayers were invited to participate in this test. The IRS has received 600 EZ-1 returns.

More than 700,000 taxpayers have already gotten their refunds, the IRS said, and refund amounts are up. Last year the average refund for January-filed returns was $981 and has increased to $1,149. Taxpayers who file early typically are due refunds and can expect to get them in four to six weeks, or less if the return is filed electronically.

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