IRS: No More Tax Forms In The Mailbox

From CNNMoney.com:

Electronic filing of tax returns has become so popular that the Internal Revenue Service will no longer automatically mail a traditional paper form.

"We're finding that more and more people are choosing to e-file, and the number of paper returns is going down," said IRS spokesman Anthony Burke. He told CNN Tuesday that the agency last year mailed the old-style set of paper forms, tables and instructions to just eight percent of the nation's taxpayers.

Burke said 96 million taxpayers this year have filed electronically, with another 20 million filing through professional tax preparers. The IRS hopes to save $10 million a year by not automatically mailing the materials.

Those who prefer hardcopy documents can still find them at libraries, post offices and walk-in IRS offices around the country. After Jan. 1, they can request a mailing through the IRS toll-free number, 800-829-3676.

The materials will also be available to download and print out from the IRS website: www.irs.gov

Questions for the Tax Lady: August 30th, 2010

Check out the following new Questions for the Tax Lady answers and feel free to ask me questions through one of the links below. You can send me an email, direct message or @ reply, and I will do my best to get an answer for you!

Question #1: My wife and I make around $75,000 per year, and file a joint return. If Congress does not extend the Bush tax cuts will our federal income tax rate increase?

That is the big question being asked all over this country. The answer is, probably. Even if your official tax rate does not change, you might be facing a bigger tax bill. The Bush tax cuts involved a lot more than just marginal tax rates. Also included were a number of deductions and credits that reduced tax liabilities for people in every tax bracket.

There are a number of plans for the Bush tax cuts being circulated in Congress. Some groups want them all extended. Some want them all to expire. Some Congress members propose letting some of the cuts expire. To see how each plan may impact your tax bill, check out the Tax Foundation’s calculators here: (http://www.mytaxburden.org/).

Question #2: Can I make my quarterly tax payments electronically?

Yes. You can either make a one-time payment or recurring monthly payments using the IRS’ Electronic Federal Tax Payment System (EFTPS). For more information, check out Eftps.gov.

Stuck in the Mud: IRS Spins its Wheels on Electronic Modernization

The popularity of electronic tax return filing has increased drastically over the past few years, and it has certainly not escaped the attention of the IRS. In an attempt to keep up with the trend and improve efficiency, the Customer Account Data Engine (CADE), a branch of the IRS began creation on a modern processing system that would get refunds back to taxpayers eight days faster than before. However, new obstacles are coming up which means the system may not be ready as quickly as the government had hoped. Checkout the following article from GCN.com on the struggle to get the system implemented.

The number of taxpayers filing electronic federal tax returns has increased steadily since 2005, accounting for more than two thirds of returns during the 2009 filing season. However, as the Internal Revenue Service enters the 2010 filing season, it is curtailing development of a major element of its modernization program and rethinking its strategy for delivering electronic services.

The Customer Account Data Engine (CADE), a part of the IRS Business Modernization Program that is intended eventually to replace the legacy Master File processing system, processed 40 million returns in 2009, producing taxpayer refunds from one to eight days faster than the older system. CADE originally was to be completed by 2012, but increasing complexities have extended that date.

“After over 5 years and $400 million, CADE is only processing about 15 percent of the functionality originally planned for completion by 2012,” a Government Accountability Office report says.

Each successive release of the system was expected to process more complex returns, but several technical challenges in the system had not been dealt with. The IRS estimated that full implementation would not be achieved until at least 2018, and possibly as late as 2028.

Continue reading at GCN.com…