Tax Packages on Their Way

WASHINGTON - The 1994 federal income tax packages go in the mail on January 3, 1995. The Internal Revenue Service will mail tax packages or postcards to 109 million taxpayers nationwide for the tax filing season that starts next month. IRS expects to receive over 116 million tax returns for 1994.

This year the IRS is continuing its efforts in three major areas:

• improving customer service for taxpayers;
• encouraging eligible low income workers to claim the earned income tax credit; and
• taking additional steps to combat tax filing fraud.

For the first time, the IRS lists its Customer Service Standards in the tax packages. In her letter to taxpayers, IRS Commissioner Margaret Milner Richardson says, "We intend to meet your needs and expectations as taxpayers and as customers. If the service you receive from the IRS does not measure up to our Customer Service Standards, please let us know."

While there are not many tax law changes for taxpayers to deal with this year, the Earned Income Tax Credit has been significantly changed. For 1994, more low income workers will qualify for the credit and the credit is easier to claim. The maximum earned income tax credit is $306 for taxpayers with no qualifying children, $2,038 for those with one child, and $2,528 for those with two or more children. IRS estimates that about 20 million taxpayers will qualify for the EITC this year.

Taxpayers will continue to have alternatives to filing paper returns. IRS expects about 15.5 million individuals to file electronically this year. About 700,000 single people will file by telephone, using the TeleFile program which has been expanded this year to 10 states.

This filing season it will be very important for taxpayers to ensure they enter correct social security numbers for themselves and their dependents on their tax returns. IRS said it it increasing its screening and review of tax returns during processing to identify and stop fraud attempts. The IRS will delay refunds on returns with incorrect or missing social security numbers to allow time to verify that the taxpayers are entitled to the refunds they claim.

"If you try to make a withdrawal at a bank or use an ATM machine, you need to use the correct account number or PIN," said Commissioner Richardson. "We think the same should be true when you file your return."

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