IRS Sending Stimulus Payment Information to Retirees, Veterans

WASHINGTON — The Internal Revenue Service today reminded qualifying retirees and veterans that it is not too late to file for an economic stimulus payment and announced it will send a second set of information packets to 5.2 million people who may be eligible but who have not yet filed for their stimulus payment.

The packages will contain everything needed by a person who normally does not have a filing requirement but who must file this year in order to receive an economic stimulus payment. There will be instructions, an example Form 1040A return showing the few lines that need to be completed, and a blank Form 1040A. The packages will be mailed over a three-week period starting July 21.

“All it takes is a few simple steps, and the payment can be on its way. It’s not too late to file, but the sooner people file, the faster they’ll receive their money,” said Doug Shulman, IRS Commissioner.

The mailing is part of an IRS summer campaign to reach out to those people who have no requirement to file a tax return but who may be eligible for a stimulus payment of up to $300 ($600 for married filing jointly). For those eligible for a payment for themselves, there also is a $300 per child payment for eligible children younger than 17.

The IRS has accounted for about 75 percent of the approximately 20 million Social Security and Veterans Affairs beneficiaries identified as being potential stimulus recipients. All but 5.2 million of those have either filed a return, filed a joint return or were not eligible for a stimulus payment (for example, they were claimed as a dependent on another’s return).

To reach the remaining recipients, the IRS is working with national partners, members of Congress and state and local officials to ensure that assistance to eligible people is available.

The agency also reminded people that it has more than 400 local Taxpayer Assistance Centers operating normal business hours Monday through Friday. These centers can provide assistance to retirees and veterans trying to receive their payments. A list of addresses and office hours can be found at Contact My Local Office.

The Economic Stimulus Act of 2008 provided for payments of up to $600 ($1,200 for married filing jointly) for taxpayers who normally file a tax return and have a tax liability. It provided that stimulus recipients could receive another $300 for each eligible child younger than 17.

The Act also created a special category for people who had certain types of income but may not file a tax return because their income is too low or their income is nontaxable.

People in this category must have at least $3,000 in qualifying income to be eligible for the minimum amount of $300 ($600 married filing jointly). Qualifying income is the total of Social Security, Veterans Affairs and/or Railroad Retirement benefits plus earned income, including nontaxable combat pay

People receiving only Supplemental Security Income are not eligible. Eligible people must have a Social Security number (unless their spouse is a member of the military) and be neither a dependent nor eligible to be a dependent on another’s tax return.

Receiving the stimulus payment should have no impact on other federal benefits currently being received. The stimulus payment is not taxable. Absent any other filing requirements, filing a tax return to receive a stimulus payment does not mean that retirees and others will have to start filing tax returns again.

As of July 11, the IRS had issued 112.4 million payments totaling $91.8 billion. Payments are based on 2007 tax returns being filed this year. People must file by Oct. 15 in order to receive a payment in 2008. Those who do not file a tax return to obtain their stimulus payment this year may still receive their stimulus payments by filing a 2008 tax return next spring, but then their stimulus payment would be based on their 2008 qualifying income.

Related Item:

Stimulus Payments — It's Not Too Late

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Updated IRS News

1. Stimulus Payments Update

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It’s not too late for qualifying retirees and veterans to get their payments. See news release IR-2008-91. Look for updates on the IRS.gov stimulus payments page, also available in Spanish.

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2. Recent Disaster Relief

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Victims of recent storms and floods in Indiana, Iowa, Illinois, Missouri, Nebraska, West Virginia and Wisconsin have until Aug. 29 to file certain tax returns. Be sure to check for updates on the tax relief in disaster situations page.

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3. Commissioner Speaks About RRA ‘98 Anniversary

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Remarks from IRS Commissioner Shulman before the Tax Analysts Conference on RRA '98.

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4. Issue Management Resolution System (IMRS) Monthly Overview

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The June overview and current hot issues are now available. IMRS facilitates stakeholder issue identification, resolution and feedback.

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5. Nationwide Tax Forums

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Make plans to attend the next tax forum in Orlando on Aug. 5-7 or check out the dates and locations of upcoming forums.

Advanced registration is required for the workshops on the new Form 990 and Retirement Plan Pitfalls. Make an appointment to bring your toughest unresolved case for practitioner case resolution. Attend a Taxpayer Advocate Service seminar or focus group. There’s a lot more, so

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News for flood and storm victims

Victims of Floods, Storms and Tornadoes In Six States Now Have Until Aug. 29 to File Certain Returns

WASHINGTON ––The Internal Revenue Service is postponing until Aug. 29 the time to file certain tax returns, to make certain tax payments and to perform time-sensitive acts for storm, flood, and tornado victims in presidential disaster areas in six states, mostly in the Midwest.

Previously, these deadlines varied by state, and the postponement provides people affected by the disasters with additional time.

"Our hearts go out to to the people hit by these disasters," IRS Commissioner Doug Shulman said. “We realize that as people put their lives back together, they need additional time to work on these tax issues."

This announcement will affect counties in Indiana, Iowa, Illinois, Nebraska, West Virginia and Wisconsin that qualify for individual assistance. Affected counties in Missouri previously have been granted relief until Aug. 29.

Related Items:

• Disaster news release for Indiana,
• Disaster news release for Iowa,
• Disaster news release for Illinois,
• Disaster news release for Nebraska,
• Disaster news release for West Virginia,
• Disaster news release for Wisconsin, and
• Disaster news release for Missouri.

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National Taxpayer Advocate Releases Report to Congress

WASHINGTON — National Taxpayer Advocate Nina E. Olson today delivered a report to Congress that identifies the priority issues the Office of the Taxpayer Advocate will address in the coming fiscal year. Among the key areas of focus will be improving IRS procedures to protect victims of tax-related identity theft and expanding outreach and education to individuals who have lost their homes to foreclosure concerning the “cancellation of debt” tax consequences they face.

The report notes that July 22, 2008, will mark the 10th anniversary of the enactment of the IRS Restructuring and Reform Act of 1998, which created the Office of the Taxpayer Advocate in its current form and added significant taxpayer rights protections. Olson praised the legislation, saying: “From my perspective as the National Taxpayer Advocate, I see daily how much taxpayers benefit from RRA 98.”

The Advocate’s report, which is required by law, sets out the objectives of the Office of the Taxpayer Advocate for the upcoming fiscal year and provides substantive analysis of issues as well as statistical information. Among the areas the report identifies for particular emphasis in FY 2009 are the following:

1. Tax-Related Identity Theft. The National Taxpayer Advocate’s 2007 Annual Report to Congress identified tax-related identity theft as one of the most serious problems facing taxpayers. The report stated that the IRS does not have adequate procedures in place to assist victims of identity theft and does not have adequate systems in place to quantify the number of tax-related incidents of identity theft that occur. The report made eight recommendations, including the creation of a centralized unit to handle identity theft cases and the development of a centralized set of procedures that cuts across IRS functions. The IRS has taken a number of steps to improve its procedures; notably, it has developed a Service-wide identity theft indicator and is studying the creation of a centralized unit to assist identity theft victims. During FY 2009, the Office of the Taxpayer Advocate will work with the IRS to improve its procedures in this area.

2. Cancellation of Debt Income. When an individual or business borrows money and the debt is cancelled, the borrower generally must include the amount of the cancelled debt in gross income. This requirement generally affects borrowers who lose their homes to foreclosure or who default on car loans or credit card debts. Taxpayers may exclude the amount of a cancelled debt from gross income under certain circumstances, but to do so, they must take the affirmative act of filing Form 982, Reduction of Tax Attributes Due to Discharge of Indebtedness (and Section 1082 Basis Adjustment), with their tax returns. Very few taxpayers file Form 982, and the Office of the Taxpayer Advocate has focused and will continue to focus on increasing public awareness of the rules and exceptions. It has worked with the IRS to simplify the instructions for Form 982 and to develop an IRS publication that covers the tax aspects of cancellation of debt issues comprehensively, produced podcasts (known as “TAScasts”) that are available online, and provided specialized training for Low Income Taxpayer Clinic (LITC) practitioners. The Office of the Taxpayer Advocate will continue to work with the IRS to simplify reporting procedures and will continue to conduct outreach to affected taxpayers and practitioners in FY 2009.

3. IRS Collection Practices. The National Taxpayer Advocate’s 2006 Annual Report to Congress raised a number of concerns about IRS collection practices. Joint working groups have been established to work on five issues – levies, allowable living expense standards, installment agreements, offers in compromise, and early intervention techniques. However, the Office of the Taxpayer Advocate remains concerned about additional collection issues, including resorting to seizures before all viable collection alternatives have been exhausted, under-utilization of partial-pay installment agreements, and excessive delays in collection that exacerbate taxpayer delinquency problems because of the accumulation of interest and penalties. The IRS is working with the Office of the Taxpayer Advocate to address these concerns, and the collaboration will continue in FY 2009.

Other areas of emphasis for FY 2009 identified in the report include monitoring the private debt collection program, working with the IRS to assist taxpayers with disproportionate tax liabilities due to alternative minimum tax resulting from the exercise of incentive stock options (known as “ISO/AMT” tax liabilities), working with the IRS to address problems and inefficiencies in the correspondence examination program, and updating a 2003 report on the standards and structure of federal ombudsmen offices.

* * * * * * *

The National Taxpayer Advocate is required by statute to submit two annual reports to the House Committee on Ways and Means and the Senate Committee on Finance. The statute requires these reports to be submitted directly to the Committees without any prior review or comment from the Commissioner of Internal Revenue, the Secretary of the Treasury, the IRS Oversight Board, any other officer or employee of the Department of the Treasury, or the Office of Management and Budget. The first report is submitted mid-year and must identify the objectives of the Office of the Taxpayer Advocate for the fiscal year beginning in that calendar year. The second report, due on December 31 of each year, must identify at least 20 of the most serious problems encountered by taxpayers, discuss the 10 tax issues most frequently litigated in the courts during the prior year, and make administrative and legislative recommendations to resolve taxpayer problems.

About the Taxpayer Advocate Service

The Office of the Taxpayer Advocate (also known as the Taxpayer Advocate Service) is an independent organization within the IRS that assists taxpayers who are experiencing economic harm, who are seeking help in resolving tax problems that have not been resolved through normal channels, or who believe that an IRS system or procedure is not working as it should. Taxpayers may be eligible for assistance if:

• They are experiencing economic harm or significant cost (including fees for professional representation);
• They have experienced a delay of more than 30 days to resolve a tax issue; or
• They have not received a response or resolution to the problem by the date that was promised by the IRS.

The service is free, confidential, tailored to meet taxpayers’ needs, and available for businesses as well as individuals. There is at least one local taxpayer advocate in each state, the District of Columbia and Puerto Rico. Taxpayers can contact TAS by:

• Calling the TAS toll-free case intake line at 1-877-777-4778 or TTY/TDD 1-800-829-4059;
• Calling or writing to their local taxpayer advocate, whose address and phone number is listed in the government listings of their local telephone directory and in Publication 1546, Taxpayer Advocate Service – Your Voice at the IRS;
• Filing Form 911, Request For Taxpayer Advocate Service Assistance (and Application for Taxpayer Assistance Order), with the Taxpayer Advocate Service; or
• Asking an IRS employee to complete Form 911 on their behalf.

To get a copy of Form 911 or learn more about the Taxpayer Advocate Service, go to www.irs.gov/advocate.

Related Items:

• National Taxpayer Advocate's 2009 Objectives Report to Congress
• Taxpayer Advocate Service

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The Advanced Earned Income Tax Credit

You May Be Eligible for the Advanced Earned Income Tax Credit

Why wait? You may be eligible for a tax credit right now that could mean larger paychecks this summer. This benefit is called the Advanced Earned Income Credit or Advance EIC.

If you expect to qualify for the credit in 2008, you may be able to start getting part of the credit with your pay now. Otherwise, you could wait until you file your tax return in 2009.

To receive part of the credit with your pay, you must expect to have at least one qualifying child for the current year, expect to fall within certain income limits, and expect to meet certain other conditions. You cannot get the Advance EIC if you do not expect to have a qualifying child, even if you expect to be eligible to claim the EIC on your current year tax return. To see if you qualify, ask your employer for the current year Form W-5, Earned Income Credit Advance Payment Certificate.

If you qualify, complete Form W–5 and give it to your employer. Your employer will then add the advance earned income credit to your net pay each pay period you are eligible.

You may have only one Form W–5 in effect with a current employer at one time. If you and your spouse are both employed, each of you must file a separate Form W–5.

If your situation changes after you give your employer Form W–5, you must give your employer a new Form W–5. For example, give your employer a new Form W–5 if you no longer expect to qualify for the EIC or you no longer want to get advance payments of the credit with your pay.

Remember, if you receive the EIC with your pay during the current year, you must file Form 1040A or Form 1040 for the current year to report the advance payments you received during the year and to take advantage of any remaining credit. You cannot use Form 1040EZ. The total of the advance payments you receive will be shown on your current year Form W–2.

The current year Form W–5 expires on December 31, 2008. If you expect to be able to claim the credit in advance for the following year, you must give a new completed Form W–5 which is valid for that year to your employer.

For more information about the Advance EIC see IRS Publication 596, Earned Income Credit. This publication (available in both English and Spanish) and Form W-5 can be downloaded from IRS.gov or by calling 800-TAX-FORM (800-829-3676).

Links:

• 2008 Form W-5
• IRS Publication 596, Earned Income Credit

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IRS Tax News

1. Stimulus Payments Update

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Check the Economic Stimulus Payments Information Center on IRS.gov for updates, also available in Spanish.

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2. Recent Disaster Relief

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Victims of recent storms and floods in Illinois, Missouri and Nebraska may qualify for IRS disaster relief. Be sure to check for updates on the tax relief in disaster situations page.

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3. Apply for New VITA Grant

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The IRS is now accepting applications for the first-ever Volunteer Income Tax Assistance (VITA) matching grant program. They must be received by Sept. 2, 2008. See news release IR-2008-85 for information on how to apply.

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4. Filing Extensions Changing for Some Business Taxpayers

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Temporary and proposed regulations will reduce the extension of time to file tax returns for certain businesses that generate Schedules K-1 and other similar statements from six months to five. Requiring these statements to be issued one month earlier, generally by Sept. 15, will provide recipients time to prepare and file returns within the extended time frames. For details, see news release IR-2008-84.

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Filing Extensions Changing for Some Business Taxpayers Later this Year

WASHINGTON — Internal Revenue Service officials today announced a change in the extended due date on certain business returns to help individuals better meet their filing obligations. The change, which reduces the extension period from six to five months, eases the burden on taxpayers who must report information from Schedules K-1 and similar documents on their individual tax returns.

Income, deductions and credits from partnerships, S corporations, estates and trusts are reported to partners, investors and beneficiaries on Schedules K-1 and other similar statements. The recipients then use that information to complete their own tax returns.

Currently, the extended due date for both businesses and individuals often falls on the same date, generally Oct. 15. This creates a burden for individual taxpayers who rely on the information from Schedule K-1 and other similar statements to prepare and file their personal tax returns in a timely manner.

"We are eliminating the same-day deadline for these returns, which causes needless hardship and puts the individual taxpayer in an awkward position," said IRS Commissioner Doug Shulman. "We want to correct this timing issue to ensure that all taxpayers have the information they need to file timely and stay in compliance with the law."

The IRS today issued temporary and proposed regulations that will reduce the extension of time to file tax returns for certain businesses that generate Schedules K-1 and other similar statements from six months to five. Requiring these statements to be issued one month earlier, generally by Sept. 15, will provide recipients time to prepare and file returns within the extended time frames.

This change will be effective for extension requests with respect to tax returns due on or after Jan. 1, 2009, and applies to business entities that file the following returns and forms that have a tax year ending on or after Sept. 30, 2008:

1. Form 1065, U.S.Return of Partnership Income
2. Form 1041, U.S. Income Tax Return for Estates & Trusts
3. Form 8804, Annual Return for Partnership Withholding Tax (Section 1446)

The regulation does not change the process for requesting an extension of time to file, nor does it affect extensions of time to file other types of business returns, such as those used by S corporations.

“The regulations will bring the extended time frames of certain business entities with flow-through items in line with other similar businesses, such as S corporations," said Jodi Patterson, director of IRS’s Office of Taxpayer Burden Reduction. “S corporations have a return due date of March 15 and, under a regular 6-month extension of time to file, their extended due date already falls on September 15.”

The IRS initiated the proposal to reduce the extension of time to file, carefully weighing the impact on partnerships and other affected entities against the burden the existing deadline puts on individuals, who need this information to file timely and accurate returns.

Comments on the proposed regulations can be sent electronically via the Federal eRulemaking Portal at http://www.regulations.gov (IRS REG-115457-08). For further information on commenting on the proposed regulations, see REG-115457-08.

The IRS is committed to reducing unnecessary taxpayer burden and welcomes input from tax and payroll professionals, business owners and the general public on opportunities to make it easier to comply with the tax laws. More information, including a link to Form 13285A, Reducing Tax Burden on America's Taxpayers, can be found on the TBR page of IRS.gov, Office of Taxpayer Burden Reduction.

Links:

• REG-115457-08 -- Notice of proposed rulemaking by cross-reference to temporary on Extension of Time for Filing Returns
• TD 9407 -- Final and temporary regulations and removal of temporary regulations on Extension of Time for Filing Returns

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The IRS has increased mileage rates

WASHINGTON — The Internal Revenue Service today announced an increase in the optional standard mileage rates for the final six months of 2008. Taxpayers may use the optional standard rates to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes.

The rate will increase to 58.5 cents a mile for all business miles driven from July 1, 2008, through Dec. 31, 2008. This is an increase of eight (8) cents from the 50.5 cent rate in effect for the first six months of 2008, as set forth in Rev. Proc. 2007-70.

In recognition of recent gasoline price increases, the IRS made this special adjustment for the final months of 2008. The IRS normally updates the mileage rates once a year in the fall for the next calendar year.

"Rising gas prices are having a major impact on individual Americans. Given the increase in prices, the IRS is adjusting the standard mileage rates to better reflect the real cost of operating an automobile," said IRS Commissioner Doug Shulman. "We want the reimbursement rate to be fair to taxpayers."

While gasoline is a significant factor in the mileage figure, other items enter into the calculation of mileage rates, such as depreciation and insurance and other fixed and variable costs.

The optional business standard mileage rate is used to compute the deductible costs of operating an automobile for business use in lieu of tracking actual costs. This rate is also used as a benchmark by the federal government and many businesses to reimburse their employees for mileage.

The new six-month rate for computing deductible medical or moving expenses will also increase by eight (8) cents to 27 cents a mile, up from 19 cents for the first six months of 2008. The rate for providing services for charitable organizations is set by statute, not the IRS, and remains at 14 cents a mile.

The new rates are contained in Announcement 2008-63 on the optional standard mileage rates.

Taxpayers always have the option of calculating the actual costs of using their vehicle rather than using the standard mileage rates.

Mileage Rate Changes

Purpose	Rates 1/1 through 6/30/08	Rates 7/1 through 12/31/08
Business	50.5	58.5
Medical/Moving	19	27
Charitable	14	14

Low-Income Housing Limits to Be Waived in Indiana and Iowa

Low-Income Housing Limits to Be Waived in Indiana and Iowa

WASHINGTON — The Internal Revenue Service today announced that it will waive certain limitations for the low-income housing tax credit in Indiana and Iowa so that owners of facilities in these states can provide housing to victims of recent storms and flooding.

The IRS will continue to monitor closely the housing situation in other states affected by the recent flooding and is prepared to act quickly as circumstances warrant.

“Our thoughts are with the thousands of families left homeless by these terrible tragedies,” IRS Commissioner Doug Shulman said. “We are pleased to help these states to quickly house the needy whose homes were destroyed.”

Because of the widespread devastation to housing caused by storms and flooding, the IRS will temporarily suspend certain limitations for qualified low-income housing projects located anywhere in the states of Indiana and Iowa. Today’s action will expand the availability of housing for disaster victims and their families.

Formal notices detailing this relief will be issued shortly.

For related information, see:

• IRS Gives Storm Victims for Time to File and Pay
• Disaster Relief for Indiana Storm, Flooding Victims
• Disaster Relief for Iowa Storm, Flooding Victims
• Disaster Assistance and Emergency Relief for Individuals and Businesses

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Report Certain Foreign Bank and Financial Accounts by June 30

IRS Reminds Taxpayers to Report Certain Bank and Financial Accounts

WASHINGTON –– The Internal Revenue Service today reminded U.S. persons who have bank and other financial accounts in a foreign country that they may be required to report those accounts to the U.S. Department of Treasury by the June 30 deadline.

With globalization, more people in the U.S. have foreign financial accounts. There is nothing improper about setting up or maintaining such accounts. Still, IRS officials are concerned that U.S. persons may overlook that their accounts are large enough to trigger reporting obligations.

“There are responsibilities that go along with owning such foreign bank and financial accounts,” said IRS Commissioner Doug Shulman. “Foreign account owners must remember that they may have to report their accounts to the government, even if the accounts do not generate any taxable income.”

Since 2000, the number of Report of Foreign Bank and Financial Accounts (FBAR) forms received by the Treasury has increased by nearly 85 percent, from 174,528 in 2000 to 322,414 in 2007. Despite this significant increase in filings, concern remains about the degree of reporting compliance for those who are required to file.

U.S. persons are required to file a Report of Foreign Bank and Financial Accounts (FBAR), Form TD F 90-22.1, each year if they have a financial interest in or signature authority or other authority over any financial accounts, including bank, securities or other types of financial accounts, in a foreign country, if the aggregate value of these financial accounts exceeds $10,000 at any time during the calendar year.

The 2007 FBAR form is due June 30, 2008.

The FBAR is not an income tax return and should not be mailed with any income tax returns. The FBAR must be filed on or before June 30 of the following year to: U.S. Department of the Treasury, P.O. Box 32621, Detroit, MI 48232-0621.

Unlike with federal income tax returns, requests for an extension of time to file an FBAR are not granted.

Civil and criminal penalties for non-compliance with the FBAR filing requirements are severe. Civil penalties for a non-willful violation can range up to $10,000 per violation. Civil penalties for a willful violation can range up to the greater of $100,000 or 50 percent of the amount in the account at the time of the violation. Criminal penalties for violating the FBAR requirements while also violating certain other laws can range up to a $500,000 fine or 10 years imprisonment or both. Civil and criminal penalties may be imposed together.

If a holder of a foreign account was required to file FBARs for earlier years, however, he or she should file the delinquent FBAR reports and attach a statement explaining why the reports are filed late. No penalty will be assessed if IRS determines that the late filings were due to reasonable cause. The account holder should keep copies of their statement for his or her own record.

FBAR information returns for the 2007 calendar year must be filed with the U.S. Department of Treasury, P.O. Box 32621, Detroit, Mich., 48232-0621. The address for commercial delivery is: U.S. Department of Treasury, Currency Transaction Reporting, 985 Michigan Avenue, Detroit, Mich., 48226.

The FBAR form is not available for electronic filing, but many income tax software packages can prepare a printed copy. FBAR forms and instructions are also available on IRS.gov or the FinCEN Web site and by calling 1-800-829-3676.

Taxpayers who need assistance completing Form TD F 90-22.1 can contact the IRS by telephone at 1-800-800-2877, option 2, or via email at FBARquestions@irs.gov.
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IRS Gives Storm Victims More Time to File and Pay

IRS Gives Storm Victims More Time to File and Pay; Taxpayers in Parts of 10 States Qualify

WASHINGTON — Victims of storms and flooding in 10 states will have more time to make quarterly estimated tax payments normally due today, according to the Internal Revenue Service.

"Our hearts go out to the flood victims in the stricken states," IRS Commissioner Doug Shulman said. "At a time like this, taxes should be the last thing on the minds of these unfortunate victims."

Over the weekend the IRS provided tax relief, including the postponement of various tax-filing and tax-payment deadlines, to disaster-area counties in Iowa, Indiana and Wisconsin. Earlier this spring, the agency extended similar relief to storm victims in parts of Arkansas, Colorado, Georgia, Maine, Mississippi, Missouri and Oklahoma.

As a result, self-employed individuals, retirees and others in these areas who make quarterly estimated tax payments will have more time to make the payment normally due today. Businesses will also have extra time to file various returns and pay any taxes due. Due dates vary, depending upon location, and details are available on the Tax Relief in Disaster Situations page on this Web site.

In addition, affected taxpayers in these areas who suffered uninsured or unreimbursed property damage can choose to claim these losses on their 2007 tax returns.

The IRS is monitoring and regularly updating all available relief.
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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%

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.

Related Items:

• E-file overview
• Frequently Asked Questions
• Charities & Non-profits page

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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.

Related Items:

• Frequently Asked Questions
  

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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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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

Related Items:

• Open Season for IRSAC Membership
• IRSAC Application
• Tax Check Waiver

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