Stimulus Payments Withdrawn from IRAs and Tax-Favored Accounts Are Tax Free

Relief for Stimulus Payments Withdrawn from IRAs and Tax-Favored Accounts

WASHINGTON — Economic stimulus payments directly deposited into IRAs and other tax-favored accounts may be withdrawn tax-free and penalty-free, the Internal Revenue Service announced today.

This relief is designed to help taxpayers who may have been unaware that by choosing direct deposit for their entire regular tax refund, they were also choosing to have their stimulus payment directly deposited as well. If a taxpayer elected a split refund, however, their stimulus payment will be paid by a paper check.

This relief is available for amounts withdrawn from these tax-favored accounts that are less than or equal to a taxpayer’s directly deposited stimulus payment.

To qualify for this relief, funds must be taken out by April 15, 2009, in most cases. Without this relief, taxes, penalties and other special rules would apply to amounts removed from these accounts. Regular refunds are not eligible for this relief.

Eligible tax-favored accounts include traditional and Roth IRAs, health savings accounts (HSAs), Archer MSAs, Coverdell education savings accounts (ESAs) and qualified tuition programs, also known as QTPs or 529 plans. Thus, for example, a taxpayer whose $1,200 stimulus payment is directly deposited into his or her IRA can take out anywhere up to $1,200 from the IRA, tax-free and penalty-free.

In general, the deadline for these withdrawals is the due date or extended due date for filing a 2008 return. This means April 15, 2009, for most taxpayers, or Oct. 15, 2009, for those who obtain tax-filing extensions.

Details on reporting these withdrawals and claiming relief will be included in tax forms and instructions for 2008. Other details are in Announcement 2008-44 on this Web site.

Related Item:Economic Stimulus Payments Information Center

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May’s Tax Talk Today Features

May’s Tax Talk Today Features “The Electronic IRS...more than just e-file”

WASHINGTON — The Internal Revenue Service’s next Web cast aimed at educating tax and payroll professionals will provide the latest news and information on e-file, e-services and other electronic tools important to the practitioner community.

The latest Tax Talk Today program will appear on Tuesday, May 13, 2008, at 2 p.m. The Web cast is entitled “The Electronic IRS...more than just e-file”.

If you haven’t visited IRS.gov lately, you’ll be surprised and amazed how easy it is to find information about and use IRS’s ever-expanding, on-line products and services.

This month, tune in for the latest news and information on e-file, e-services, and other electronic tools important to the practitioner community.

The show’s panel of experts includes Roger Harris, President and C.O.O., Padgett Business Services®/SmallBizPros, Inc., Padgett Foundation; Tony Tullo, Federal Compliance Director, Automatic Data Processing; Beth Jones, Director, Electronic Products & Services Support (EPSS), IRS Wage & Investment (W&I) Division; and Paul Mamo, Director, Development Services Division, IRS Electronic Tax Administration. Tax professionals are encouraged to watch and submit questions.

To access the Web cast at no charge, viewers can register online. Tax professionals in need of continuing education credits are eligible to receive one CEC by viewing the March 11 Web cast.

Archived shows are available on the site also.

The next show is on Tuesday, July 8 when the topic will be “Retirement Plan Pitfalls”.
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Taxpayers Can Check Their Refund Status

Taxpayers Can Check Their Refund Status
with “Where’s My Refund?”

WASHINGTON — Taxpayers who have filed their federal income tax returns and are expecting their refunds can use the Internal Revenue Service’s online tool, “Where’s My Refund?,” to check on the status of their refunds.

“Where’s My Refund?” is fast, easy, safe and convenient. Nearly 9.7 million taxpayers have checked the status of their 2007 federal income tax refunds online, up about 18 percent over the same time period last year.

To get to personalized refund information, taxpayers should be ready to enter their:

* Social Security Number (or Taxpayer Identification Number),
* Filing status (Single, Married Filing Joint Return, Married Filing Separate Return, Head of Household, or Qualifying Widow(er)),
* Exact refund amount shown on their tax returns.

Taxpayers can check on the status of their refund seven days after e-filing a return. For a paper return, check four to six weeks after mailing the return.

“Where’s My Refund?” also includes links to customized information based on a taxpayer’s specific situation. For example if “Where’s My Refund?” shows that the IRS was unable to deliver a refund, a taxpayer can change his or her address online. Taxpayers can avoid undelivered refund checks by having their refunds directly deposited into a personal checking or savings account.

If 28 days have passed after the IRS says it mailed a refund check, “Where’s My Refund?” enables taxpayers to initiate a trace.

New this year Spanish-speaking taxpayers can get information about the status of their federal refunds using Dónde Está mi Reembolso? available by entering the Spanish language area of the web site by clicking the Espanol link on IRS.gov. The refund trace and address change features are only available in English at this time.

Taxpayers without internet access can check the status of their refunds by calling the IRS TeleTax System at 800-829-4477 or the IRS Refund Hotline at 800-829-1954. The TeleTax refund information is updated each weekend. If you do not get a date for your refund, please wait until the next week before calling back.

Where’s My Refund? is also accessible to visually impaired taxpayers who use the Job Access with Speech screen reader used with a Braille display and is compatible with different JAWS modes.

Some scam artists are sending phony emails, including those relating to “Where’s My Refund?”, to trick individuals into revealing personal financial information that can be used to access their financial accounts. People who want to access the genuine IRS Web site and the “Where’s My Refund?” feature should go directly to the IRS Web site by typing the address, www.irs.gov, into the address` line of their Internet window. The only genuine IRS Web site is IRS.gov.
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It’s Not too Late to File for Your 2008 Stimulus Payment

Even though the April 15 tax deadline has passed, it is not too late to file for your economic stimulus payment this year. Persons who qualify for the payment must file a 2007 tax return by October 15, 2008.

Millions of people are eligible but may not know it, or think it is too late to get a payment. These are certain retirees, disabled veterans and low-wage workers who normally don’t file a tax return because their income is too low or nontaxable. This year, they must file to receive their stimulus payment.

The IRS will issue economic stimulus payments of up to $600 for individuals ($1,200 for married couples) plus $300 for each eligible child under age 17 starting in early May, based on 2007 tax returns processed by April 15.

People who have no tax filing requirement but have at least $3,000 in qualifying income must file a simple Form 1040A tax return to obtain their stimulus payment. The law provides a minimum payment of $300 ($600 for married couples) plus the $300 payment per eligible child, if the person (or married couple) qualifies.

Qualifying income includes any combination of earned income, nontaxable combat pay as well as certain payments from Social Security, Veterans Affairs and Railroad Retirement.

The types of Social Security benefits that are considered qualifying income include retirement, disability and survivor payments. Supplemental Security Income (SSI) is not qualifying income. The types of Veterans Affairs benefits that are considered qualifying income include disability compensation, disability pension and survivor payments. Qualifying Railroad Retirement payments include the social security equivalent portion of Tier 1 benefits.

People not otherwise required to file an income tax return must file a simple Form 1040A with basic information to ensure that they receive the economic stimulus payment. This information includes their name; address; dependents, if any; amount of their qualifying income (which must be $3,000 or more); direct deposit information and their signatures. Form 1040A and instructions are available on the IRS Web site at www.irs.gov or by calling 800-TAX-FORM (800-829-3676).

All eligible persons, including qualifying children, must have Social Security numbers. People with Individual Taxpayer Identification Numbers are not eligible. Also, people cannot be claimed or be eligible to be claimed as a dependent on another’s tax return to qualify for a payment.

More than 400 IRS Taxpayer Assistance Centers are open weekdays offering free tax preparation and filing for individuals and families whose income is $40,000 or less and those filing a tax return solely to receive the economic stimulus payment. To find an IRS office near you, go to IRS.gov and click on “Contact IRS,” then “Contact Your Local IRS Office.”

A select number of volunteer tax assistance sites in local communities may also remain open providing free help. Call 1-800-906-9887 to find the nearest volunteer tax assistance site.

People filing solely to receive a stimulus payment can file their own return electronically by using IRS Free File – Economic Stimulus Payment, also available at www.irs.gov. This program provides free software and free electronic filing of Form 1040A, and it remains open until the October 15 filing deadline to receive a stimulus payment.

Remember that for the genuine IRS Web site be sure to use .gov. Don't be confused by internet sites that end in .com, .net, .org or other designations instead of .gov. The address of the official IRS governmental Web site is www.irs.gov.

2008-2009 Guidance Priority List

Treasury, IRS Solicit Recommendation for 2008-2009 Guidance Priority List

WASHINGTON — The Department of Treasury and Internal Revenue Service invite public comment on recommendations for items that should be included on the 2008-2009 Guidance Priority List.

The Treasury Department's Office of Tax Policy and IRS use the Guidance Priority List each year to identify and prioritize the tax issues that should be addressed through regulations, revenue rulings, revenue procedures, notices, and other published administrative guidance. The Guidance Priority List focuses resources on guidance items that are most important to taxpayers and tax administration. Published guidance plays an important role in increasing voluntary compliance by helping to clarify ambiguous areas of the tax law.

The 2008-2009 Guidance Priority List will establish the guidance that the Treasury Department and IRS intend to issue from July 1, 2008, through June 30, 2009.

In reviewing recommendations and selecting projects for inclusion on the 2008-2009 Guidance Priority List, the Treasury Department and the IRS will consider the following:

• Whether the recommended guidance resolves significant issues relevant to many taxpayers;
• Whether the guidance may be appropriate for enhanced public involvement through the process described in Notice 2007-17, 2007-12 I.R.B. 748;
• Whether the recommended guidance promotes sound tax administration;
• Whether the recommended guidance can be drafted in a manner that will enable taxpayers to understand and apply the guidance easily;
• Whether the IRS can administer the recommended guidance on a uniform basis; and
• Whether the recommended guidance reduces controversy and lessens the burden on taxpayers or the IRS.

Please submit recommendations by May 31, 2008, for possible inclusion on the original 2008-2009 Guidance Priority List.

Information on how to submit recommendations can be found in Notice 2008-47. Taxpayers are not required to submit recommendations for guidance in any particular format. Taxpayers should, however, briefly describe the recommended guidance and explain the need for the guidance. In addition, taxpayers may include an analysis of how the issue should be resolved.

All comments will be available for public inspection and copying in their entirety.

Related Item: Notice 2008-47

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Federal Rates

Revenue Ruling 2008-24 provides various prescribed rates for federal income tax purposes including the applicable federal interest rates, the adjusted applicable federal interest rates, the adjusted federal long-term rate, the adjusted federal long-term tax-exempt rate. These rates are determined as prescribed by § 1274.

The rates are published monthly for purposes of sections 42, 382, 412, 1288, 1274, 7520, 7872, and various other sections of the Internal Revenue Code.

Revenue Ruling 2008-24 will appear in Internal Revenue Bulletin 2008-18, Dated: May 5, 2008

2008 Form 990 Instructions

IRS Issues Draft Instructions for 2008 Form 990

WASHINGTON –– The Internal Revenue Service recently released for public comment the draft instructions to the 2008 Form 990, which is the return most tax-exempt organizations must file annually.

The instructions apply to the redesigned Form 990 that organizations will file for their 2008 tax years (returns filed in 2009). The final version of the redesigned Form 990 was unveiled in December 2007 (IRS news release IR-2007-204).

“Tax-exempt organizations provide tremendous benefits to the people and communities they serve, but their ability to do good work hinges upon the public’s trust,” said IRS Commissioner Doug Shulman. “The new Form 990 will foster this trust by greatly improving transparency and compliance in the tax-exempt sector. Public comment on the draft instructions will help the IRS to minimize the reporting burden on tax-exempt organizations, which is another important goal.”

The IRS seeks public comment on the draft instructions to ensure that the final instructions meet the needs of the tax-exempt community. The public comment period will run until June 1, 2008.

The IRS also released a list of special “highlights” with the draft instructions, in the hope that public comments give particular attention to these details. The IRS will post comments on its Web site as it did with comments about the draft redesigned Form 990 last year.

The draft 2008 Form 990 instructions include a general overview that explains its purpose, an explanation of who must file particular schedules and line-by-line instructions. The draft instructions also include new tools to assist organizations in answering certain questions and facilitating uniform reporting.

“We were immensely gratified by the amount and quality of public comments we received on the Form 990 redesign,” said Lois G. Lerner, director of the IRS Tax-Exempt Organizations division. “Public input resulted in a form that meets the needs of tax-exempt organizations, the public and tax administrators. We hope for similarly thoughtful and useful comments about the draft instructions.”

The draft Form 990 instructions are on the tax-exempt organizations part of the IRS Web site. Comments on the instructions should be e-mailed to the IRS at Form990Revision@irs.gov. To facilitate posting on the IRS Web site, please e-mail comments in a text (not picture) format.

Comments may also be mailed to:

IRS
Draft 2008 Form 990 Instructions, SE:T:EO
1111 Constitution Ave., NW.
Washington, DC 20224

Related Items:

• Draft Form 990 Instructions and other information

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The End Of Tax Season

The end of tax season is almost here, and it can't get here fast enough, this year has been a little crazy. For example, early in the season, when the W-2's start coming out, we call that peak. In the previous 2 seasons, the returns I did were just W-2's with dependents, nothing else, and these are really easy returns. The customer usually wants a bank product also, because our fees come out of their check, and they usually have a big Earned Income Credit, so the refunds are in the $2,000-6000 range. These returns take 20-30 minutes to do. We do a lot of returns in this time. And for the record, I have never, or will I ever, push a bank product on a client. I just explain the options. Most clients know which bank product they want before they even come in the door.

For some reason though, this season I had much harder returns during peak, and the clients paid their fee up front and had the IRS send their refund. I'm not complaining, I love to do tough returns, it was unusual though, because we don't start getting these types of returns until later in the season. When I mean tough returns, I mean a lot of deductions, depreciation, and things like that, where it takes more than an hour to do.

Anyway, my last day is the 16th, because I have to close the office. It will be my 9th straight day, which is fine with me, more money on my last check before I move. My guess is I've done about 150 returns or so this season, give or take a few. The office is close to 500.

And a last minute tip, you still have until tomorrow to contribute to your IRA and lower the amount of tax you pay.

Tim

Your Appeal Rights

Are you in the middle of a disagreement with the IRS? If you disagree with the IRS about the amount of your tax liability or about proposed collection actions, you have the right to ask the IRS Appeals Office to review your case.

IRS Publication 1, Your Rights as a Taxpayer, explains some of your most important taxpayer rights. During their contact with taxpayers, IRS employees are required to explain and protect these taxpayer rights, including the right to appeal.

The Appeals Office, which is independent of the IRS office that proposed the disputed action, can work with taxpayers by correspondence, telephone, or informal conferences.

Through Appeals procedures, taxpayers can settle most differences without expensive and time-consuming court trials. However, if you and the Appeals Officer or Settlement Officer cannot reach agreement, or if you prefer not to appeal within the IRS, in most cases, you may take your disagreement to federal court.

For more information about Appeals and its processes, go to the IRS Web site at IRS.gov and select the link to “Appeal a Tax Dispute”, which is found at the bottom of the home page. The Appeals Web page provides links to assist you in determining if you are ready for Appeals, how to request an appeal, and what you can expect from Appeals.

This page also provides a link to easy-to-use online self-help tools to help you focus on your area of dispute and determine if you will benefit from filing an appeal. You can also link to “Online Videos of the Appeals Process” containing informative online video streams entitled “The Appeals Process (Examination)” and “The Appeals Process (Collection).”

Information is also available in IRS Publication 5, Your Appeal Rights and How to Prepare a Protest If You Don't Agree; Publication 556, Examination of Returns, Appeal Rights, and Claims for Refund; and Publication 1660, Collection Appeal Rights (for Liens, Levies, and Seizures). To get copies of IRS publications, visit the IRS Web site at IRS.gov or call 800-TAX-FORM (800-829-3676).

Remember that for the genuine IRS Web site be sure to use .gov. Don't be confused by internet sites that end in .com, .net, .org or other designations instead of .gov. The address of the official IRS governmental Web site is www.irs.gov.

Links:

• Tax Information for Appeals
• Tax Topic 151 – Your Appeal Rights
• Publication 1, Your Rights as a Taxpayer (PDF 21K)
• Publication 5, Your Appeal Rights and How to Prepare a Protest If You Don't Agree (PDF 36K)
• Publication 556, Examination of Returns, Appeal Rights and Claims for Refunds (PDF 105K)
• Publication 1660, Collection Appeal Rights (for Liens, Levies, and Seizures) (PDF 31K)
• Publication 3605, Fast Track Mediation ( PDF 15K)

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2008 Filing Season Statistics

2008 FILING SEASON STATISTICS
Cumulative through the weeks ending 4/3/07 and 4/4/08
Individual Income Tax Returns	2007		2008		% Change
Total Receipts	88,581,000		96,821,000		9.3%
Total Processed	84,215,000		90,064,000		6.9%
E-filing Receipts:
TOTAL	61,345,000		67,437,000		9.9%
Tax Professionals	44,210,000		47,184,000		6.7%
Self-prepared	17,135,000		20,253,000		18.2%
Web Usage:
Visits to IRS.gov	109,353,000		132,444,000		21.1%
Total Refunds:
Number	73,622,000		75,136,000		2.1%
Amount	$174.165	Billion	$183.043	Billion	5.1%
Average refund	$2,366		$2,436		3.0%
Direct Deposit Refunds:
Number	49,935,000		53,694,000		7.5%
Amount	$136.605	Billion	$147.164	Billion	7.7%
Average refund	$2,736		$2,741		0.2%

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Last Minute Tax Reminders

WASHINTON — Now that the April 15 tax return filing and tax payment deadline is nearing, the Internal Revenue Service offers the following last-minute tips for those taxpayers who haven’t yet filed, paid what they owe or taken the necessary steps to ensure they receive the economic stimulus payment they qualify for.

Taxpayers can speed their receipt of their economic stimulus payment by choosing IRS e-file and direct deposit and by filing by the due date. They also can minimize possible interest assessments and late filing or late payment penalties by filing and paying by the due date.

File Electronically

Take advantage of e-filing, which is fast, accurate and easy. Most available tax preparation programs check for errors and necessary information, increasing the accuracy of the return and reducing the need for correspondence with the IRS to clarify errors or omissions. With most programs taxpayers can usually file a state tax return at the same time they electronically file their federal return. Once the return is accepted for processing, the IRS electronically acknowledges receipt of the return. Generally, when someone files electronically, their refund will be issued in about half the time it would take if they had filed a paper return. Those who choose direct deposit will get their refund in even less time and receive their economic stimulus payments sooner as well.

Use IRS Free File

Free electronic filing from nearly 20 companies is available to taxpayers whose 2007 adjusted gross income was $54,000 or less. That means 70 percent of all taxpayers, 95 million filers, can take advantage of the IRS-sponsored Free File program. The only way to access this program is through the IRS’s secure, official Web site, IRS.gov. Free File is also available for individuals who are filing a tax return solely to receive their economic stimulus payment. There is no charge for this service.

Economic Stimulus Payments

Starting in May, the Treasury will begin sending economic stimulus payments to more than 130 million households. To receive a payment, taxpayers must have a valid Social Security number, $3,000 of qualifying income and file a 2007 federal income tax return. The IRS will take care of the rest. Eligible people will receive up to $600 ($1,200 for married couples), and parents will receive an additional $300 for each eligible child younger than 17. Millions of retirees, disabled veterans and low-wage workers who normally do not need to file a tax return must do so this year in order to receive a stimulus payment. People filing only to receive the economic stimulus payment do not have to file by April 15 and they do not have to file a Form 4868 for an extension. These people must file Form 1040A, though, by Oct. 15 to receive the payment in 2008. Taxpayers normally required to file who cannot meet the April 15 deadline should file a Form 4868 to obtain an extension to file until Oct. 15.

Avoid Scams

If you receive unsolicited email or telephone calls from anyone purporting to be from the IRS, it’s probably a scam. Don’t click on any links; don’t answer any questions. Forward the emails or report the calls to phishing@irs.gov.

Earned Income Tax Credit

Earned income of less than $39,783 in 2007 may qualify a taxpayer (married filing jointly with more than one qualifying child) to claim the earned income tax credit. This credit could be worth up to $4,716 (depending on the number of qualified children and level of earned income). When the EITC exceeds the amount of taxes owed, it results in a tax refund to those who claim and qualify for the credit. To qualify, taxpayers must meet certain requirements and file a tax return, even if they did not earn enough money to be obligated to file a tax return. An electronic special “EITC Assistant” is available to help taxpayers determine whether they are eligible. Taxpayers can access more information on this credit by clicking on “1040 Central” on the front page of IRS.gov.

Make Sure Your Paper Return is Error-Free

Those who file a paper return can avoid most potential delays in processing the return and avoid additional correspondence with the IRS to clarify errors should make certain they:

• Double-check their figures,
• Sign their form,
• Attach all required schedules,
• Send their return or request an extension by the April 15 filing deadline.

Pay Electronically

Taxpayers who file electronically can e-file and e-pay in a single step by authorizing an electronic funds withdrawal or by credit card. Electronic payment options are convenient, safe and secure methods for paying taxes or user fees. Taxpayers can charge taxes on their American Express, MasterCard, Visa or Discover cards, using an IRS-authorized service provider listed on IRS.gov. The service providers charge a convenience fee based on the amount of tax the taxpayer is paying. Taxpayers should not add the convenience fee to their tax payment. For those who can’t file or pay on time, the IRS provides extensions of time to file and payment plans.

Request an Extension of Time to File

Taxpayers who can't meet the deadline to file their tax return can get an automatic six-month extension of time to file from the IRS, but they must submit the request by April 15. The extension gives taxpayers until Oct. 15 to file the tax return. However, an extension of time to file does not give the taxpayer an extension of time to pay, which must be separately requested. Those who owe taxes can make a payment when they file the extension either by mailing a check made out to the U.S. Department of the Treasury or by several electronic payment methods, such as electronic funds withdrawals from bank accounts and credit card payments. Taxpayers can get an automatic six-month extension of time to file their tax returns by filing Form 4868, Automatic Extension of Time to File. Taxpayers can e-file the extension request from a home computer or through a tax professional who uses e-file. Taxpayers can e-file their extensions at no cost. Several companies offer free e-filing of extensions through the Free File Alliance; these companies are listed on IRS.gov.

Request an Extension of Time to Pay

Based on the circumstances, a taxpayer could qualify for an extension of time to pay. The IRS is willing to allow extensions of time to pay in order to assist in tax debt repayment. However, interest and certain penalties may apply. A taxpayer can request an extension from 30 to 120 days depending on the specific situation. Taxpayers qualifying for an extension of time to pay of 30 to 120 days generally will pay less in penalties and interest than if the debt were repaid through an installment agreement. Taxpayers can request an extension of time to pay using the Online Payment Agreement option available. If you owe tax but cannot pay the full amount, you should pay as much as you can by the April 15 due date in order to minimize any interest and penalty charges.

Apply for an Installment Agreement

The IRS may allow taxpayers to pay any remaining balance in monthly installments through an installment agreement. Taxpayers who owe $25,000 or less may apply for a payment plan electronically, using the Online Payment Agreement application. Alternatively, taxpayers may attach a Form 9465, Installment Agreement Request, to the front of his or her tax return. Taxpayers must show the amount of their proposed monthly payment and the date they wish to make their payment each month. The IRS charges a $105 fee for setting up an installment agreement. The fee is reduced to $52 for those who establish a direct debit installment agreement and $43 for those with an income below a certain level (more information is available on Form 13844). Taxpayers are required to pay interest plus a late payment penalty on the unpaid taxes for each month, or part of a month, after the due date that the tax is not paid. A taxpayer who does not file the return by the due date — including extensions — may have to pay a failure-to-file penalty.

For more information about filing and paying taxes, choose “1040 Central” or refer to the Form 1040 instructions or IRS Publication 17, Your Federal Income Tax. Taxpayers can download forms and publications from the official IRS Web site, IRS.gov or request a free copy by calling toll free 800-TAX-FORM (800-829-3676).

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How Long Should It Take To Receive Your Tax Refund?

Are you expecting a tax refund from the Internal Revenue Service this year? If you file a complete and accurate paper tax return, your refund should be issued about six to eight weeks after the IRS receives your return. If you file your return electronically, your refund is issued in about half that time — even faster if you choose direct deposit.

You can check on the status of your refund 72 hours after you e-filed your return or four weeks after mailing your return. There are several ways to check the status of your refund. You will need your Social Security number, filing status and the exact whole dollar amount of your refund to use these applications.

• Where's My Refund: The fastest, easiest way to find out about your current year refund is to go to the IRS.gov Web site and click on the “Where’s My Refund” link available from the home page.
• Refund Hotline: Call the IRS Refund Hotline at 800-829–1954.
• TeleTax: Call the IRS TeleTax System at 800-829-4477.
  If you do not get a date for your refund, wait until the next week before calling back.

In some circumstances, you may not receive your refund as quickly as you expected. Refund delays can be caused by a variety of reasons. For example, a name and Social Security number listed on the tax return may not match the IRS records. You may have failed to sign the return or include a necessary attachment, such as Form W-2, Wage and Tax Statement. Or you may have made math errors that require extra time for the IRS to correct.

For more information on how long it may take the IRS to process your federal tax refund, visit Frequently Asked Questions at IRS.gov.

Remember that for the genuine IRS Web site be sure to use .gov. Don't be confused by internet sites that end in .com, .net, .org or other designations instead of .gov. The address of the official IRS governmental Web site is www.irs.gov.

Links:

• Where’s My Refund?
• Form 3911, Taxpayer Statement Regarding Refund (PDF 62K)
• Tax Topic 152 — Refunds
• Frequently Asked Questions

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IRS Continues Efforts to Reach People for Stimulus Payments

Free Help Available for Certain Taxpayers, Retirees and Disabled Vets

WASHINGTON — With the April 15 tax filing deadline quickly approaching, the Internal Revenue Service today reminded taxpayers that free help is available and announced extended hours at some locations.

Free assistance also is available to retirees, disabled veterans and others filing a tax return solely to receive the economic stimulus payment.

“We expect a record number of tax returns because of the stimulus payments. If you can, we urge you to avoid the rush. File now, file electronically and use direct deposit to receive a speedy refund and stimulus payment. If you need assistance, free help is available,” said Doug Shulman, IRS Commissioner.

Timely filing of the 2007 income tax return is particularly important this year because of the economic stimulus payments. Eligible Americans must file a tax return in order to receive economic stimulus payments of up to $600 ($1,200 married filing jointly). There is another $300 payment for each qualifying child younger than 17.

The IRS will use the 2007 income tax return to determine eligibility for the economic stimulus payment and to calculate the amount of the payment. People who normally file a tax return don’t need to take any additional steps to get their stimulus payment. Starting May 2, the IRS will transfer economic stimulus payments to taxpayers using direct deposit. It will begin mailing paper checks on May 16.

All IRS Taxpayer Assistance Centers are open Monday through Friday from 8:30 a.m. until 4:30 p.m. Locations are listed at www.irs.gov . Click on “Contact IRS,” then “Contact Your Local IRS Office.” These sites offer free tax preparation and filing for individuals and families whose income is $40,000 or less.

On Saturday, April 12, nearly 300 Taxpayer Assistance Centers will have special hours from 9 a.m. to 1 p.m. local time to help people filing solely to claim the economic stimulus payment. Assistance will also be provided for taxpayers preparing regular tax returns. Also on April 12, the IRS will offer special Saturday hours on the toll-free help line at 1-800-829-1040 from 10 a.m. to 3 p.m. local time.

As the filing deadline approaches, help is also available from IRS partners that operate 12,000 volunteer tax preparation sites nationwide. To find a nearby Volunteer Income Tax Assistance or Tax Counseling for the Elderly site, people can call 1-800-906-9887. Most VITA sites offer free services to individuals or families whose income is $40,000 or less. People who are 60 and older are eligible for free help at TCE sites operated by AARP.

Free File, the private-public partnership that offers free tax software and free electronic filing, is available at www.irs.gov for people whose income is $54,000 or less. Approximately 70 percent of the nation’s taxpayers are eligible for Free File.

Several Free File partners also are offering free forms and filing for those retirees, disabled veterans and others who are filing a tax return solely to receive the economic stimulus payment. This help is available at Free File – Economic Stimulus Payment at www.irs.gov.

Eligible taxpayers will qualify for their stimulus payment simply by filing their 2007 tax return, as they would normally do.

However, people who do not have a tax filing requirement but who have at least $3,000 in income from any combination of earned income, nontaxable combat pay and certain benefits from Social Security, Veterans Affairs and Railroad Retirement must file a 2007 income tax return in order to receive an economic stimulus payment. They may be eligible for the minimum amount of $300 ($600 for married couples) plus the $300 per qualifying child payment.

The IRS urges people who are filing only to receive the economic stimulus payment to use the Form 1040A. All people in this category are eligible for free assistance.

Key Documents Can Help With Tax Returns

For help in completing a tax return, taxpayers are encouraged to bring certain documents to IRS offices or volunteer sites:

• Photo I.D. (valid driver’s license or other photo identification.)
• Social Security Cards for you, your spouse and dependents and/or a Social Security
• Number verification letter issued by the Social Security Administration
• Birth dates for you, your spouse and dependents on the tax return
• Current year’s tax package, if you received one
• Wage and earning statement(s) Form W-2, W-2G, 1099-R, from all employers
• Interest and dividend statements from banks (Forms 1099)
• A copy of last year’s Federal and State returns if available
• Bank Routing Numbers and Account Numbers for Direct Deposit
• Total paid for day care provider and the day care provider's tax identification number (the provider's Social Security Number or the provider's business Employer Identification Number)
• To file taxes electronically on a married filing joint tax return, both spouses must be present to sign the required forms.

People filing solely to receive the stimulus payment should bring proof that they have at least $3,000 in qualifying income. This would include:

• Form SSA-1099 from Social Security or Form RRB-1099 from Railroad Retirement Board, or if 1099 is not available, a monthly statement and/or the amount of monthly benefits.
• Monthly statement from the Department of Veteran's Affairs showing payments you received in 2007 for veterans’ disability compensation, disability pension and survivor benefits and/or the amount of monthly benefits.
• Form W-2 showing your non-taxable Qualified Combat Pay.
• Proof of any other income, taxable or nontaxable.

People filing only to receive the economic stimulus payment do not have to file by April 15 and they do not have to file a Form 4868 for an extension. However, they do need to file Form 1040A by October 15 to receive the payment in 2008.

Taxpayers normally required to file who cannot meet the April 15 deadline should file a Form 4868 to obtain an extension to file until October 15. Taxpayers can use Free File to submit the Form 4868 electronically.

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IRS Economic Stimulus Payment Information Now in Spanish

IRS Economic Stimulus Payment Information Now in Spanish

WASHINGTON — The Internal Revenue Service today reminded taxpayers and tax-preparation volunteers that information about the economic stimulus payment is available in Spanish.

Information also is available for Spanish-speaking retirees, disabled veterans and low-wage workers who normally do not have a tax filing requirement but must file a tax return this year to receive an economic stimulus payment. All stimulus payment details are available at Centro de Información Sobre los Pagos de Estímulo Económico.

Starting in May, the IRS will issue economic stimulus payments of up to $600 ($1,200 for married couples) for people who have an adjusted gross income of less than $75,000 in adjusted gross income ($150,000 for married couples). There also is a payment of $300 for each qualifying child younger than 17.

People who normally do not pay taxes because their income is too low or nontaxable also may be eligible. People in this category must have at least $3,000 in qualifying income from, or a combination from, earned income, nontaxable combat pay and certain benefits from Social Security, Veterans Affairs and Railroad Retirement Board.

To be eligible, people cannot be dependents or eligible to be dependents on another’s tax return. Eligible people must also have a valid Social Security number. People with Individual Taxpayer Identification Numbers are not eligible.

Most taxpayers just need to file a tax return as usual. The IRS will take care of the calculations. However, the eligible retirees, disabled veterans and low-income workers who normally do not file a return, must file a Form 1040A and write “economic stimulus payment” across the top.

Newly translated information includes the Package 1040A-3, an 8-page package of instructions, a sample Form 1040A and a blank Form 1040A. It contains everything needed to file a return immediately. Also, Free File – Economic Stimulus Payment is now available in Spanish.

Just click ‘Español” at www.irs.gov to go to the main El IRS en Español page.

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Do You Need More Time To File?

If you can't meet the April filing deadline to file your tax return, you can get an automatic six month extension of time to file from the IRS.

Here are some things to remember about filing extensions:

• File Form 4868, Application for Automatic Extension of Time to File U.S. Individual Income Tax Return, with the IRS by the April deadline, or make an extension-related electronic credit card payment.
• The extension will give you extra time to get your paperwork to the IRS, but it does not extend the time you have to pay any tax due.
• You will owe interest on any amounts not paid by the April deadline, plus a late payment penalty if you have paid less than 90 percent of your total tax by that date.
• You can e-file an extension request using tax preparation software on your own computer or by going to a tax preparer that has the software. The IRS will acknowledge receipt of the extension request if you file by computer.
• You can use Free File to file for an extension. Many private-sector companies in the IRS Free File Alliance offer extensions for no charge. You can access Free File via the IRS Web site at IRS.gov. Taxpayers with adjusted gross incomes of $54,000 or less may file their 2007 Federal Income Tax Returns electronically through Free File.

If you ask for an extension via computer, you can also choose to pay any expected balance due by authorizing an electronic funds withdrawal from a checking or savings account. You will need the appropriate bank routing and account numbers and must also have available the adjusted gross income from your 2006 federal income tax return to verify your identity. For information on these and other methods of payment, visit the IRS.gov Web site or call 800-TAX-1040 (800-829-1040).

If your return is completed but you are unable to pay the full amount of tax due, do not request an extension. File your return on time and pay as much as you can. The IRS will send you a bill or notice for the balance due. To apply online for a payment agreement, go to IRS.gov, use the pull-down menu under “I need to …” and select “Set Up a Payment Plan.”

To obtain a copy of Form 4868 or other forms and publications use E-file tax preparation software, download them from IRS.gov or visit your local IRS office. Note that forms and publications can be ordered by calling 800-TAX-Form (800-829-3676). However, telephone requests normally take 10 days to fill and may not arrive before the tax deadline of April 15.

Remember that for the genuine IRS Web site be sure to use .gov. Don't be confused by internet sites that end in .com, .net, .org or other designations instead of .gov. The address of the official IRS governmental Web site is www.irs.gov.

Links:

• Form 4868, Application for Extension of Time to File U.S. Individual Income Tax Return (PDF 50K)
• Form 9465, Installment Agreement Request (PDF 100K)
• Publication 54, Tax Guide for U.S. Citizens and Resident Aliens Abroad (PDF 348K)
• Publication 3, Armed Forces' Tax Guide (PDF 206K)
• Official Payments Corporation
• Link2 Gov Corporation

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Payment Options If You Owe Tax

If you cannot pay the full amount of taxes you owe by the April deadline, you should still file your return by the deadline and pay as much as you can to avoid penalties and interest. There are also alternative payment options to consider:

• Pay by Credit Card You can charge your taxes on your American Express, MasterCard, Visa or Discover cards. To pay by credit card, contact one of the service providers at its telephone number or Web site listed below and follow the instructions. The service providers charge a convenience fee based on the amount you are paying. Do not add the convenience fee to your tax payment.
• Link2Gov Corporation: 888-PAY-1040 (888-729-1040), www.pay1040.com
• Official Payments Corporation: 800-2PAY-TAX (800-272-9829), www.officialpayments.com
• Extension of Time to Pay Based on the circumstances, a taxpayer could qualify for an extension of time to pay. The IRS is willing to allow extensions of time to pay in order to assist in tax debt repayment. A short term extension of time to pay can be requested through the Online Payment Agreement application at IRS.gov or by calling 800-829-1040. Taxpayers qualifying for an extension of time to pay of 30 -120 days generally will pay less in penalties and interest than if the debt were repaid through an installment agreement.
• Installment Agreement The IRS may allow you to pay any remaining balance in monthly installments through an installment agreement. You can apply for an IRS installment agreement using our Web-based Online Payment Agreement application on IRS.gov. Another alternative is to attach a Form 9465, Installment Agreement Request, to the front of your tax return. The IRS charges a $105 fee for setting up an installment agreement. The fee is only $52 if you pay via direct debit. If your income is below a certain level (see Form 13844), you may qualify for a $43 fee. You will also be required to pay interest plus a late payment penalty on the unpaid taxes for each month or part of a month, after the due date that the tax is not paid. If you do not file your return by the due date -- including extensions -- you may have to pay a failure-to-file penalty.

In most circumstances, the Online Payment Agreement application provides immediate notification regarding the approval of your request. There may be times when you will need to mail paperwork or speak with us before we can determine your eligibility for an installment agreement or short term extension to pay. If that is the case, the online application will provide an address and telephone number that can be used to reach the appropriate IRS office.

For more information about filing and paying your taxes, visit the IRS Web site at IRS.gov and choose “1040 Central” or refer to the Form 1040 Instructions or IRS Publication 17, Your Federal Income Tax. You can download forms and publications at IRS.gov or request a free copy by calling toll free 800-TAX-FORM (800-829-3676).

Remember that for the genuine IRS Web site be sure to use .gov. Don't be confused by internet sites that end in .com, .net, .org or other designations instead of .gov. The address of the official IRS governmental Web site is www.irs.gov.

Links:

• Online Payment Agreement Application
• Electronic Payment Options
• www.officialpayments.com
• www.pay1040.com
• Form 9465, Installment Agreement Request (PDF 100K)
• Installment payment process
• Partial Pay Installment Agreements
• Is an Offer in Compromise Right for You?
• Publication 17, Your Federal Income Tax (PDF 2,072K)

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Make Your Tax Payments Correctly

If you have a balance due when filing your 2007 income tax return, remember to make sure your tax payment check or money order is payable to the "United States Treasury." Complete and include Form 1040-V, Payment Voucher, when sending your payment and tax return to the IRS. This will help the IRS process your payment more accurately and efficiently.

Whether you are filing your current year’s return (2007), a prior year’s return or an amended return, always provide your correct name, address, the Social Security number that is listed first on the tax form, daytime telephone number, tax year and form number on the front of your check or money order. Enclose your payment with your return, but do not staple it to the form. Do not mail cash with your tax return.

If you are e-filing you have the option of paying by electronic debit of your bank account using Electronic Funds Withdrawal. You will need to know your account number and your financial institution’s routing number. You can check with your financial institution to make sure that an electronic withdrawal is allowed and to get the correct routing and account numbers.

If you are paying by credit card, call or visit the Web site of either service provider listed below and follow the instructions:

• Link2Gov Corporation: 888-PAY-1040 (888-729-1040), pay1040.com.
• Official Payments Corporation: 800-2PAY-TAX (800-272-9829), officialpayments.com.

The service providers charge a convenience fee which may vary between the providers. You will be told what the fee is during the transaction and you will have the option to either continue or cancel the transaction. You can also find out what the fee will be by calling the provider’s automated customer service number or visiting the provider’s website. You will be given a confirmation number for your payment at the end of the call.

For more information, call 800-829-4477 to check out TeleTax Topic 158, "Ensuring Proper Credit of Payments.” This information is also contained in Publication 17, Your Federal Income Tax, available at IRS.gov, as is Form 1040-V.

Remember that for the genuine IRS Web site be sure to use .gov. Don't be confused by internet sites that end in .com, .net, .org or other designations instead of .gov. The address of the official IRS governmental Web site is www.irs.gov.

Links:

• Electronic Payment Options
• www.pay1040.com
• www.officialpayments.com
• Form 1040-V, Payment Voucher (PDF 47K)
• Form 1040-ES, Estimated Tax for Individuals (PDF 294.9K)
• Publication 17, Your Federal Income Tax (PDF 2,072K)

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Tax Tips For Last Minute Filers

If you’re trying to beat the tax deadline, there are several options for last-minute help:

• Receive a six-month extension of time to file using Form 4868, Application for Automatic Extension of Time To File U.S. Individual Income Tax Return.
• Payment options are available to taxpayers having trouble paying their tax bill.
• Download forms and publications at IRS.gov.

Filing an extension will give you extra time to get the paperwork to the IRS and avoids the late-filing penalty, but it does not extend the time you have to pay any tax due. You must estimate your tax liability when you apply for an extension.

You will owe interest on any amounts not paid by the April deadline, and you also will be charged a penalty for late payment unless at least 90 percent of your tax liability is paid by the regular due date of your tax return.

You can also e-file an extension request using tax preparation software on your own computer or by going to a tax preparer.

If your return is completed but you are unable to pay the tax due, do not request an extension. File your return on time and pay as much as you can. The IRS will send you a bill or notice for the balance due and will charge interest and penalties only on the unpaid balance.

If you cannot pay the full amount due with your return, you can ask to make monthly installment payments for the full or a partial amount. You can apply for an IRS installment agreement using our Web-based Online Payment Agreement application on IRS.gov. The Web-based application allows eligible taxpayers or their authorized representatives to self-qualify, apply for, and receive immediate notification of approval. You can also request an installment agreement by submitting a completed Form 9465, Installment Agreement Request, either when you file the return or when you later get a bill from the IRS.

For more information regarding extensions of time to file or installment agreements, including options for requesting an installment agreement online, visit the IRS Web site at IRS.gov and click on 1040 Central.

Remember that for the genuine IRS Web site be sure to use .gov. Don't be confused by internet sites that end in .com, .net, .org or other designations instead of .gov. The address of the official IRS governmental Web site is www.irs.gov.

Links:

• Form 4868, Application for Extension of Time to File U.S. Individual Income Tax Return (PDF 76K)
• Form 9465, Installment Agreement Request (PDF 100K)

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Your Federal Tax Return And Filing Methods

Once you complete your 2007 federal tax return, you can either file it electronically or mail it to the IRS.

More than one-half of all taxpayers file electronically because they know that IRS e-file provides a fast, easy, accurate, secure and convenient way to file. Taxpayers who file electronically receive an acknowledgement that their return has been received and accepted for processing.

Electronic options include:

• Computer filing using an authorized IRS e-file tax professional
• Using your personal computer to file
• Free File is available at IRS.gov for many taxpayers as an option for filing their returns with no charge

If you choose to mail your return, you will find directions on where to send it on the back cover of your instruction booklet.

When mailing your return, whether enclosing a payment or not, use the envelope and the appropriate mailing label that came with your tax instruction booklet. If you moved during the year, check the tax package to find the mailing address of the appropriate IRS Center. The appropriate address depends on where you live and whether or not you are enclosing a check or money order. Checks or money orders should be payable to the “United States Treasury.”

For more information on where to file your tax return, check out the 1040 Central page on the IRS Web site at IRS.gov. Use the 1040 Central page as your one-stop guide to filing your 2007 federal income tax return.

Remember that for the genuine IRS Web site be sure to use .gov. Don't be confused by internet sites that end in .com, .net, .org or other designations instead of .gov. The address of the official IRS governmental Web site is www.irs.gov.

Links:

• 1040 Central
• Where to File
• E-file for Individual Taxpayers

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