IRS Unveils Nationwide Phone Filing
The Internal Revenue Service Tuesday announced its first nationwide program to allow taxpayers to file federal tax returns by telephone. The program will be available in 1996 for 23 million single individuals with no dependents and taxable income of less than $50,000.
All that’s needed is a touch-tone telephone.
In its annual mailing of tax form booklets this month, the IRS is sending special packages with personal two-digit identification numbers to eligible Americans.
The combination of the nine-digit Social Security number and two added digits provides a unique identifier for each eligible taxpayer.
Those taxpayers will be able to call a toll-free IRS number, open 24 hours a day, starting on Jan. 11. The recorded TeleFile system, which will be available in both English and Spanish, will ask for wages, tax withheld and the employer’s identification number, all of which appear on the W-2 form.
The amounts are entered by touching the corresponding digits on the telephone. A phone voice will read back the total entered and ask if it’s correct, providing a chance to correct a number if it had not been entered correctly.
The IRS computer will calculate the adjusted gross income, taxable income and tax owed or refund. The system also will calculate the variable earned-income credit, available to single taxpayers over 25 with incomes of $9,230 a year or less.
The call will take about 10 minutes and will close with the taxpayer entering his or her personal ID number. That action will be the equivalent of signing a paper tax return. The voice will provide a confirmation number, which will verify that the return has been accepted by the computer.
Taxes owed are due by April 15, the regular filing date. Refunds should be available within three weeks, faster than when paper returns are filed.
The IRS expects 3 million of the 23 million eligible taxpayers to use the new telephone system. A test in 10 states resulted in 680,000 returns filed by telephone this year for the 1994 tax year. There were 1,247 returns filed with the Spanish TeleFile system.
The error rate for taxpaying by telephone was less than 1%, compared to a rate of 15% for paper returns, according to an IRS spokesman. Writing numbers down offers numerous chances for error: by transposing numbers, adding figures incorrectly or simply jotting down the wrong digit.
“Filing taxes doesn’t get any easier than this,” IRS Commissioner Margaret Milner Richardson said as she announced the new program.
Those who receive the TeleFile tax booklet will be permitted to file by phone if:
* There is no change in the name, address or Social Security number printed on the label on the tax booklet that arrives in the mail.
* W-2 forms are available for all wages and taxable scholarship or fellowship grants. There is a limit of five W-2 forms.
* There is taxable income of less than $50,000 and taxable interest income of $400 or less.
* The taxpayer is single and has no dependents.
* The taxpayer has no income from unemployment compensation.
* No payroll taxes are owed for wages paid to a household worker.
Only the TeleFile booklets being mailed out by the IRS contain the personal ID numbers needed to use the new system. The numbers will not be available on regular tax forms. The IRS will not issue a TeleFile package for anyone who loses the mailed booklet.
Taxpayers currently can file electronically but the returns can only be transmitted to the IRS through an approved outlet, typically a tax preparation firm that charges a fee because of the speed and convenience of the procedure.
Taxpayers using the TeleFile program will deal directly with the IRS.
