Help With Your Federal Income Tax, Articles and stories related to the IRS, taxes, tax credits, EITC and tax deductions and updated tax news

Thursday, May 29, 2008

IRS e-file Up Sharply in 2008

WASHINGTON — The Internal Revenue Service’s e-file program set another record in the just-finished 2008 filing season, while Web page visits to IRS.gov also reached new highs in part due to interest in economic stimulus payments.
“The IRS has made great strides in harnessing the power of technology to do its work more efficiently,” IRS Commissioner Doug Shulman said. “The growth in electronic services helped the IRS deliver a strong filing season for the nation’s taxpayers in 2008. The increase in e-file, particularly in the final weeks of the filing season, shows that taxpayers are continuing to recognize the benefits of filing electronically.”

More than 86 million individual tax returns were electronically filed so far in the 2008 filing season, a 12 percent increase over last year at this time. By comparison, for all of 2007 just under 80 million returns were filed electronically. In all, 60 percent of all returns filed so far this year came in through e-file.

A small percentage of the growth in e-file resulted from those taxpayers who were only required to file tax returns this year to claim their federal economic stimulus payments.

The 2008 tax season saw an increase in electronic filing among last-minute filers, a group that has traditionally filed paper returns. From April 12 to 18, the number of electronically filed returns received by the IRS was up 28 percent over the comparable week last year, even though the overall number of tax returns (paper and electronic) received during the same week was up only 9 percent.

Here are some other highlights among statistics released today:

  • The IRS Customer Account Data Engine (CADE) has so far processed more than 30 million individual tax returns this year, more than double the number of returns handled by the system during all of last year. CADE, which is at the heart of efforts to replace many of the agency’s aging account processing systems, dramatically speeds up internal IRS processing. CADE processes refunds on average 5 days faster than the IRS’ legacy tax return processing system.
  • The IRS has received about 4.6 million Free File returns, a 21 percent jump over last year at this time. Free File, available only on IRS.gov, will continue to accept returns through Oct. 15 from taxpayers with incomes of $54,000 or less.
  • The number of balance-due returns filed electronically surged 21 percent to over 11.3 million, also a new record.
  • This year’s economic-stimulus payments helped fuel a 44-percent increase in the number of visits to IRS.gov, the agency’s Web site. The nearly 206 million visits included, for example, over 8 million to the economic stimulus calculator in April.

2008 FILING SEASON STATISTICS

Cumulative through the weeks ending 5/18/07 and 5/16/08

Individual Income Tax Returns

2007

2008

% Change

Total Receipts

129,150,000

143,138,000

10.8%

Total Processed

119,827,000

130,342,000

8.8%

E-filing Receipts:

TOTAL

77,076,000

86,347,000

12.0%

Tax Professionals

54,932,000

59,975,000

9.2%

Self-prepared

22,145,000

26,372,000

19.1%

Web Usage:

Visits to IRS.gov

142,282,000

205,654,000

44.5%

2008 FILING SEASON STATISTICS

Cumulative through the weeks ending 4/20/07 and 4/18/08

Individual Income Tax Returns

2007

2008

% Change

Total Receipts

124,965,000

136,941,000

9.6%

Total Processed

105,159,000

114,737,000

9.1%

E-filing Receipts:

TOTAL

76,159,000

85,154,000

11.8%

Tax Professionals

54,324,000

59,163,000

8.9%

Self-prepared

21,835,000

25,990,000

19.0%

Web Usage:

Visits to IRS.gov

132,673,000

160,777,000

21.2%

Total Refunds:

Number

88,168,000

89,898,000

2.0%

Amount

$203.022

Billion

$214.264

Billion

5.5%

Average refund

$2,303

$2,383

3.5%

Direct Deposit Refunds:

Number

57,155,000

61,820,000

8.2%

Amount

$153.486

Billion

$166.461

Billion

8.5%

Average refund

$2,685

$2,693

0.3%

Tuesday, May 13, 2008

First Filing Date for the e-Postcard Electronic Notice

IRS Reminds Small Tax-Exempt Organizations of the First Filing Date for the e-Postcard Electronic Notice

WASHINGTON –– The Internal Revenue Service today reminded small tax-exempt organizations of their new annual electronic filing requirement as the first filing deadline of May 15 approaches. Organizations can file by going to the appropriate page on this Web site.

Beginning this year, most organizations whose gross receipts are normally $25,000 or less must file Form 990-N, also known as the e-Postcard. Previously these small organizations did not have an annual filing requirement.

“The e-Postcard is fast and easy. An organization just quickly answers a few questions online,” said Steven T. Miller, Commissioner of the Tax Exempt and Government Entities Division of the IRS. “It’s free, totally paperless and will help ensure integrity and transparency in the tax-exempt community.”

The first e-Postcards are due by May 15, 2008, from small tax-exempt organizations whose tax year ended on December 31, 2007. For organizations with a tax year that ends after December 31, 2007, the e-Postcard is due by the 15th day of the 5th month after the close of their tax year.

It is important for small organizations to file the e-Postcard because, under the Pension Protection Act of 2006, if an organization fails to file for three consecutive years it will lose its tax-exempt status.

Some organizations do not have to file including organizations that are part of a group return, as well as churches, their integrated auxiliaries and conventions or associations of churches.

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Wednesday, May 7, 2008

Economic Stimulus Payments Questions And Answers

IRS Has Answers to Questions People Are Asking About Economic Stimulus Payments; IRS Urges People to Visit IRS.gov


WASHINGTON — As millions of Americans begin receiving their economic stimulus payments, the Internal Revenue Service released a list of the most-frequently-asked questions –– and answers –– that people now are asking.

“Many people have questions about the stimulus payments, and the IRS has the answers available on the IRS.gov Web site,” IRS Commissioner Doug Shulman said. “The stimulus payments are automatic for eligible taxpayers who filed a 2007 tax return, and taxpayers do not need to take any additional action to receive the payment.”

Stimulus payments started going out last week, and the initial round of payments will continue on a weekly basis through mid-July. In all, nearly 130 million payments will go out this year. Last week, 7.7 million payments were direct deposited, and the first mass production of paper checks begins Thursday.

Since last week millions of Americans have visited IRS.gov and called the IRS toll-free lines. The IRS reminded taxpayers the fastest way to get answers is to visit IRS.gov, which has payment schedules and other information.

Since the payments began, the IRS has been fielding a variety of questions centered on the payment schedule, factors affecting direct deposit of payments, eligibility requirements and questions about the payment amounts. The IRS today released an updated set of Frequently Asked Questions covering everything from when someone can expect the payment to whether it will be delivered electronically or on paper. A link to these Frequently Asked Questions can be found at the bottom of this page.

The most common question has been when people can expect their payments. Economic stimulus payments will be issued according to the last two-digits of the taxpayer’s Social Security number. For joint filers the payments will go out based on the last two digits of the Social Security number of the person listed first on the return. Payments will be made by either direct deposit or paper check, based generally on the option people chose when they filed their 2007 tax returns.

The payment schedule below is for people who filed early enough to have their tax returns processed by April 15.


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Monday, May 5, 2008

Stimulus Payments Update; IRS Phishing Scams

Stimulus Payments Update

Stimulus payments directly deposited into IRAs and other tax-favored accounts may be withdrawn tax-free and penalty-free. See news release IR-2008-68.

Check the Economic Stimulus Payments Information Center on IRS.gov for updates. Also in Spanish.

Phish Tales

An old phishing scheme has emerged again in the United States and overseas. A bogus IRS letter and Form W-8BEN (Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding) asks for the recipient’s account numbers, PINs, mother’s maiden name and passport number. The letter arrives through FAX or email. Don’t believe it! Find out more about suspicious emails and identity theft.


Tax Talk


The May 13 Tax Talk Today gives you the latest news on e-file, e-services and other electronic tools important to the practitioner community and a glimpse of the changes you can expect to see in 2009. Tune in before 2:00 p.m. ET to get any program materials available.



Technical Guidance


Announcement 2008-44 provides that individuals who have payments made by direct deposit under the Economic Stimulus Act of 2008, P.L. No. 110-185, to their IRAs or certain other accounts afforded special tax benefits under the Code may remove the payments without incurring any adverse tax consequences. It will be published in IRB 2008-20 dated May 19, 2008.

Revenue Procedure 2008-20 provides guidance relating to the obligation of material advisors to prepare and maintain lists with respect to reportable transactions under section 6112. It will be published in IRB 2008-20 dated May 19, 2008.
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Thursday, May 1, 2008

Updated IRS News

Updated IRS News, May 1, 2008

Revenue Procedure 2008-20 provides guidance relating to the obligation of material advisors to prepare and maintain lists with respect to reportable transactions under § 6112 and provides that material advisors may use the Form 13976, “Itemized Statement Component of Advisee List” (or successor form) to maintain the itemized statement component of the list. The use of the form is optional. The form is available on the IRS website.

Revenue Procedure 2008-20 will be in IRB 2008-20, dated May 19, 2008.

IRS Seeks New Members of Advisory Council

WASHINGTON –– The Internal Revenue Service today announced it seeks applications for its broad-based private-sector advisory panel, the Internal Revenue Service Advisory Council (IRSAC), which provides important feedback and recommendations regarding tax administration.

The 30-member panel is a diverse slice of the tax professional community including tax attorneys, certified public accountants, enrolled agents, enrolled actuaries, appraisers, other tax practitioners, as well as business representatives.

"The IRSAC plays a vital role by ensuring that executives at the IRS have feedback about how our policies and actions affect the private sector,” said Doug Shulman, IRS Commissioner.

Applications will be accepted from May 1 to June 16 of this year for three Council openings that will begin in January 2009. The IRS Commissioner appoints members to three-year terms.

IRSAC was originally called the Commissioner’s Advisory Group (CAG) and was renamed in 1998. IRSAC provides an organized public forum for IRS officials and relevant members of the public to discuss tax administration issues. The panel presents a report to the Commissioner each year at a public meeting in the fall.

More information and applications are available on the Tax Professionals page of the IRS web site (IRS.gov). Questions about the nomination and application process can be sent to the following email: *public_liaison@irs.gov

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