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IRS encouraging taxpayers to e-file

Restructured IRS rolls out improvements for 2002

With 92 filing days left until the April 15th deadline, the newly restructured IRS has beefed up e-filing and added some new and improved services and credits for 2002 — efforts appreciated by many local CPAs.

Although there are still plenty of skeptics, Houston CPA Tom Byrne gives the IRS credit for the changes being made to make tax filing easier and to make the agency more customer friendly.

“Kinder, gentler was a bit optimistic, but it’s been a tough row to hoe,” said Byrne of the IRS’ streamlining efforts. “It’s almost mind-boggling to see how they do it.”

No doubt that the IRS faces a mammoth task in the coming months. The agency is now mailing out more than 40 million tax packages and 23 million computer-filing brochures. Once that’s done, agents must be ready to process about 132 million individual returns.

In the meantime, the IRS has improved its Web site, added more hours and manpower to hotline numbers and improved electronic transmission of returns, known as e-filing.

The IRS’ goal is to have 80% of tax returns filed electronically by 2007 in an effort to save time and money spent on paper returns. Last year, 40 million people used e-file, up nearly 14% from the year before. This year, the IRS expects 45 million filers will use the service, still a long way from the 132 million total returns expected in 2002.

To make e-filing more appealing in 2002, the IRS added 29 more forms and schedules so that almost every taxpayer can use the system. Taxpayers create their own PIN (Personal Identification Number) and e-file a paperless return using a CPA or their own tax preparation software. The IRS claims that e-filing delivers refunds in half the time of paper tax returns, and that when combined with direct deposit, using e-file delivers refunds in as few as 10 days.

“We are working hard to improve and expand service to taxpayers,” said IRS Commissioner Charles O. Rossotti in a statement from the IRS. “We want to take as much of the headache out of tax time as possible. E-filing is better than ever, and I highly recommend that taxpayers and practitioners try it.”

Florence CPA Christine Hogg is a huge supporter of e-file.

“If they (clients) don’t want to e-file, they don’t need to come to me,” said Hogg. “My clients love it. They don’t have to mail anything to the IRS. I never have anything come back from the IRS saying they didn’t get this schedule or that. If it’s e-filed, they got it.”

As a CPA in business for herself, e-filing also saves Hogg money in time, ink and paper, and from having to hire help during the busy tax season.

“All I have to do is print one copy for the client and back it up on disk. It honestly saves me from having to hire one person. You can’t hire one person just to work during the tax season,” she said.

Still, many CPAs say that sending a tax return via Internet to the IRS will take a while to catch on. Only about 10% of Brandon CPA Sandy Barlow’s clients e-filed last year, and he doesn’t expect a rush to do so this year. Barlow believes the IRS’ goal to eliminate paper returns is a good one, but for now, the people interested in e-filing tend to be those who expect money back.

“There’s not a lot of incentive if you owe money,” said Barlow, president of Barlow, Walker & Hill, P.A.

Byrne agrees. “People who know they’re going to get a big refund want to use it, but long-term clients don’t have any interest in it. They don’t have a problem signing the form.”

Dial HELP

Another improvement in the reorganized IRS is the new toll-free hotline for tax practitioners, called the Practitioner Priority Service. In the past, the old tax practitioner hotline was not toll-free and not centralized — practitioners had different numbers to call depending on where they were located. With the agency reorganization, however, the IRS streamlined this service to make it easier for practitioners to get an answer in a reasonable amount of time.

Byrne said the hotline has undergone a dramatic change in the last few years, and is perhaps one of the IRS’ biggest improvements in the reorganization. In the past, using the hotline was difficult, and simple questions could take months to answer, he said.

“Resolving what could have been a simple issue was a nightmare,” said

Byrne, who is president of The Byrne CPA Firm, P.A. “Now, many times you can talk to someone and get an answer with that phone call, where it used to take months and months. Key people can access everything, and they have enough authority to find the problem and solve it.”

The new Practitioner Priority number is 866-860-4259. The hotline is open weekdays from 7:30 a.m. to 5:30 p.m.

For individual filers, the IRS has improved the taxpayer hotline with more hours and manpower. Taxpayers can call Monday – Friday, 7 a.m.- 10 p.m. and on selected Saturdays, Sundays and holidays. The number is 800-829-1040.

“With the phone service we noticed there were times when taxpayers called more often, so we structured the hours to be available when they are calling,” said IRS spokesperson Emma Moore. “As we get to the end of filing season, we’ll be adding more manpower and more hours.”

Still another improvement is the IRS Web site, which was restructured to make it more user friendly.

John Johnson, controller for Total Office Solutions in Flowood, uses the site to download forms and has been pleased with the Web site’s upkeep and progress.

“The IRS is continually updating it and upgrading it and adding more forms,” said Johnson.

Web site visitors can also find out the latest tax law changes, read answers to the most frequently-asked questions and see tax tables and rate schedules, among other services.

The Web site address is www.irs.gov.

Contact MBJ Staff Writer Kelly Russell Ingebretsen at kelly@msbusiness.com.

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