Home Computer E-File Usage Grows in 2007

March 5, 2007; 07:24 AM

The Internal Revenue Service announced that taxpayers are continuing to file their tax returns electronically from home computers at a record pace, up almost 7 percent from the same period last year.

“People using home computers are helping e-file grow this year," said IRS Commissioner Mark W. Everson. “Taxpayers can rely on e-file as a safe, accurate way to quickly finish their taxes and get a refund. For those who haven’t filed, they should make sure to request the telephone excise refund tax if they are eligible.”

Overall, e-file has increased by nearly 4 percent since last year.  In addition to a 7 percent increase in self-prepared electronically filed returns, e-filed returns from tax professionals climbed by more than 2 percent.

So far this tax filing season, 78 percent of all returns have been e-filed, compared to 76 percent for the same period last year. As of last Friday, 30 percent of e-filed returns were filed by people using their home computers, up from 29 percent of e-filed returns for the same period last year.

Also, more people than ever before are opting to have their refunds directly deposited into their financial accounts. So far this year, the IRS has directly deposited almost 32 million refunds, or 82 percent of all refunds issued this tax filing season, up from 80 percent of the total for the same period last year.

People are also visiting the IRS Web site — IRS.gov — in record numbers. The IRS has recorded almost 68 million unique visits to IRS.gov this year, up from 62 million for the same period last year, an increase of 9.0 percent.

In addition, this year’s filings show about three in 10 tax returns are not requesting the one-time telephone tax refund. Although some of these taxpayers may not be eligible, others may qualify and not know it. The IRS urges taxpayers to check their eligibility for this special refund by visiting the Telephone Excise Tax Refund section on IRS.gov.

The government stopped collecting the long-distance excise tax last August after several federal court decisions held that the tax does not apply to long-distance service as it is billed today. Federal officials also authorized a one-time refund of the 3 percent federal excise tax collected on service billed during the previous 41 months, stretching from the beginning of March 2003 to the end of July 2006. The tax continues to apply to local-only phone service.

Of those requesting the telephone tax refund, 99 percent are choosing the standard amount, and the rest are basing their request on the actual amount of tax paid. The standard amount ranges from $30 to $60 and is based on the number of exemptions a taxpayer is eligible to claim on their return. Alternatively, taxpayers can request a refund, based on the tax shown on their phone bills and other records.

• File electronically. Electronic-filing software flags often overlooked tax breaks and helps you figure them accurately and report them properly. If you use a professional tax preparer, ask that person to e-file your return.
• E-file for free. If your income is $52,000 or less, use the Free File link on this Web site to connect to a private-sector company offering free e-file services.
• Choose direct deposit. Whether you file electronically or on paper, you can get your refund at least a week sooner by having it deposited directly into your checking or savings account.
• Consider using the standard-refund amount for the telephone-tax refund. Though using the standard amount is optional, it is easy to figure and approximates the eligible amount for most individual taxpayers. You only have to fill out one line on your return, and you don’t need to present proof to the IRS. The standard amount, ranging from $30 to $60, is based on the number of exemptions you can claim on your return.
• If you paid more than the standard amount, you may figure your refund using the actual amount of tax shown on your phone bills and other records. Base your refund request on the three-percent federal tax paid, not the total phone bill. Do not count tax paid on local-only service. You must have the phone bills or other records adequate to support the amount you are requesting. These documents should not be sent along with the refund request but should be retained in case the IRS questions the amount requested.
• Do not file duplicate requests. If you file a regular income-tax return, do not file Form 1040EZ-T. Designed exclusively for requesting the telephone-tax refund, this simple form is for people who don’t need to file a regular income-tax return. If you want to take advantage of the earned income tax credit for low and moderate income workers, the child tax credit or other tax breaks, file a regular return and include your telephone-tax refund request on that return.
• Stay away from tax preparers who falsely claim that many, if not most, phone customers can get hundreds of dollars or more back under this program.
• Use the Telephone Excise Tax Refund section on the front page of this Web site. Here, you can download forms, find answers to frequently-asked questions and link to participating Free File partners.

2007 FILING SEASON STATISTICS

Cumulative through the weeks ending 2/24/06 and 2/23/07

• Free File
• E-file
• Telephone Excise Tax Refund