IRS touts technology for taxpayers

Gayle B. Ronan

As satisfying as sealing a tax return into its envelope and delivering it to the post office may be, it is highly unnecessary. Pressing a ‘send’ button accomplishes the same thing with greater assurance of receipt, acceptance and speedy processing.

Electronic filing has been around since 1986.  And just as technology has advanced since then, so too have the capabilities of the Internal Revenue Service.

Every conceivable form and worksheet along with instructions is now available and downloadable through the IRS Web site. Also available are an online calculator for determining the appropriate amount of withholding for the coming year, forms for requesting copies of old returns and access to the ‘Where’s My Refund?’ feature, which pinpoints a return’s processing progress and when a refund can be expected.

Though electronic filing has also become more user-friendly over the years, paper returns still account for nearly half of all returns.  Why so many forgo the e-file option is unclear, especially in cases where the taxpayer is due a refund.

Typically it takes three weeks to receive a refund after filing a paper return — even longer if the return is filed around April 15.  But an e-filed refund is processed in about half the time, according to the IRS — less if it is to be direct deposited to a bank account or accounts.  This year taxpayers have the option of splitting refunds over two or three different accounts, including IRAs at brokerage firms or with mutual fund companies, automating any intention they may have of saving at least some of their refunds.

Taxpayers who owe the government money have the option of e-filing early and scheduling an automatic payment at the last minute — that would be April 17, the deadline for filing this year.  Similarly estimated tax payments may be scheduled to automatically occur throughout the year.

“Usage seems to be a matter of comfort level,” says Julie Miller, spokeswoman for Mountain View, Calif.-based Intuit, the maker TurboTax. “People who do everything else online seem to be more comfortable filing online.  But with a filer’s age [or their preparer’s] and a return’s complexity you do find greater resistance or simply an inability to use the option.” Electronic filing, for instance, is not an option for amended returns or those involving a recently deceased person.

“Maybe it is an age thing,” confesses 66-year-old Chicagoan Mike Sheehan.  He has been using TurboTax for years to prepare his taxes.  “You just plug in the numbers.  Now that 1099s and W-2 forms are available electronically, it is even easier,” he adds.

Yet, despite Sheehan’s comfort with tax-preparation software, he has been an e-filing holdout, choosing to print his return and send it in, along with his payment, by certified mail.

“I can not explain it,” admits Sheehan, who expects to break his paper habit this year. “Though in the past after writing a check to the government, I did not feel like paying another $15 just to save myself a trip to the post office. It is not that far away.”

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