IRS Tests Electronic Filing
for Some Computer Users

WASHINGTON - Personal computer users may find it easier this year to do their taxes. The Internal Revenue Service has announced new opportunities for on-line filing of tax returns as well as for retrieving federal tax forms and publications on a personal computer.

CompuServe is offering electronic filing to its subscribers now, and America Online (AOL) expects to offer it later this month. Subscribers should check with their on-line service about required tax preparation software and transmission fees.

To file on-line, a taxpayer must transmit a completed return file to an on-line service, which converts the file from the tax preparation software's format to the format meeting IRS specifications for electronic filing. The on-line service must then transmit the return file to the IRS. The IRS will notify the taxpayer through the on-line service whether the return is accepted or, if not, which items the taxpayer must correct.

After the IRS accepts the return, the taxpayer must mail directly to the IRS, along with any W-2 forms, a signed Form 8453-OL. This form is a one-page signature document available for downloading from the on-line service.

Bach on-line subscriber may transmit up to three income tax returns -- for example, a married couple could transmit their joint return and the returns for two of their children.

Electronic filing offers greater accuracy, acknowledgement that IRS accepts the return, and the convenience and security of having a refund deposited directly into a person's bank account.

Last year, the IRS tested on-line electronic filing with CompuServe in a nine-state area, and about 300 taxpayers participated. This year, the on-line test is nationwide, and has been expanded to 30,000 returns.

Personal computer users not filing electronically through CompuServe or AOL may still shorten their paperwork and choose direct deposit for their refunds by using the 1040PC option offered in many tax preparation software programs.

The 1040PC is a condensed format return that shows the line numbers and entries only for those lines on the tax form that the taxpayer uses. The resulting printout is a three-column list that can reduce a return to two pages. Standard computers and printers produce the 1040PC on plain paper.

The IRS is also making hundreds of its most popular forms, instructions and publications available electronically. Three on-line services -- CompuServe, AOL and GEnie -- as well as FedWorld, a government bulletin board, now have these items available for both return preparers and individual taxpayers.

Subscribers can ask their on-line service for details on accessing the IRS information. The forms and publications are available in various file formats, including HP Laserjet, HP Printer Control Language, Postscript and PDF. For those who don't already have the software for any of these formats, the online services and FedWorld offer free Adobe Acrobat software to read and print the PDF format files in Windows or Macintosh. Users must print the tax forms to use them -- the forms are not designed to be filled out on-screen.

FedWorld is accessible directly by modem at 703-321-8020. Once connected, a user should access IRIS, the Internal Revenue Information System. On the Internet, a user should telnet to fedworld.gov or -- for file transfer protocol services -- connect to ftp.fedworld.gov. Users of World Wide Web services should point their Mosaic client or other Web browser to http://www.fedworld.gov. FedWorld's help desk offers technical assistance during business hours at 703-487-4608.

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