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Tax-filing Extension Expires Oct. 15; Don’t Overlook Tax Breaks, Choose e-file or Free FileIRS Offers Relief for Late S Corporation Elections Jump In E-filed Corporate Tax Returns Produces Record New Online Employer Identification Number Application Processes Requests in Minutes
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The Internal Revenue Service urges taxpayers whose tax-filing extension runs out on Oct. 15 to double check their returns for often-overlooked tax breaks and then file their returns electronically using IRS e-file or the Free File system. Many of the more than 10.2 million taxpayers who requested an automatic six-month extension this year have yet to file. IRS e-file is fast, accurate and secure, making it an ideal option for those rushing to meet the Oct. 15 deadline. The IRS verifies receipt of an e-filed return, and people who file electronically make fewer mistakes too. A record 58 percent of the 135.3 million returns received so far this year have been filed electronically. In addition, the IRS urges all taxpayers with incomes at or below $52,000 to file their returns for free using the Free File link on IRS.gov. Seven in 10 taxpayers qualify to use the software and electronic-filing services made available through the Free File Alliance, a public-private partnership between the IRS and a consortium of tax-preparation software manufacturers. Telephone customers can also use Free File to request this year’s one-time telephone excise tax refund. Taxpayers who have purchased their own software or use a paid tax preparer are also urged to file their returns electronically. Almost 78.8 million individual taxpayers have already used IRS e-file, a 9 percent increase over last year at this time. Taxpayers who file electronically can e-file and e-pay in a single step by authorizing an electronic funds withdrawal or making a credit card payment. The IRS does not charge a fee for processing an electronic funds withdrawal. However, credit-card payments are subject to convenience fees charged by the authorized service providers. Paper filers, as well as electronic filers, who cannot pay what they owe, may be able to set up a payment agreement with the IRS. Check out the Online Payment Agreement section on IRS.gov for more information. Anyone expecting a refund can get it sooner by choosing direct deposit. Nearly three in five refunds have been direct-deposited this year, a new record. This year for the first time, taxpayers can choose to have their refunds deposited into as many as three accounts. Before filing, the IRS urges taxpayers to take a moment to check out these often-overlooked tax breaks:
Businesses that are eligible to elect S corporation tax treatment now have a simpler process for requesting relief for late elections under a change announced by the Internal Revenue Service today. Revenue Procedure 2007-62 allows small businesses that missed filing Form 2553, Election by a Small Business Corporation, before filing their first Form 1120S, U.S. Income Tax Return for an S Corporation, to file both forms simultaneously. The change is effective for taxable years that end on or after Dec. 31, 2007. Internal Revenue Bulletin 2007-41, published on Oct. 9, 2007, includes this new guidance. The IRS cautioned that the requirement for filing Form 2553 to establish the election in advance of filing the initial Form 1120S remains in effect. However, the new process will save time and effort for those taxpayers who can establish reasonable cause for making a late election. Form 2553 will be updated to reflect the new rules, so taxpayers filing paper Forms 2553 should download the most recent revision from IRS.gov. Form 2553 can also be submitted electronically as an attachment to an e-filed Form 1120S. There is relief under earlier guidance for late elections for taxpayers who meet certain conditions. Previously, taxpayers had to submit Form 2553 along with a statement explaining the reasons for the late election. The new guidance provides a simplified method to request relief by permitting taxpayers to file their first Form 1120S along with Form 2553 and include the statement on the form. Small business corporations that are eligible for tax treatment under Subchapter S of the Internal Revenue Code enjoy the advantages of the corporate structure while being taxed similarly to a partnership or sole proprietorship. The new procedure will reduce taxpayer burden by allowing the agency to process a properly completed tax return and its corresponding election without delays or additional contacts with taxpayers to resolve the issue of a missing election. The change, based on suggestions from tax professionals and small business owners, resulted from the work of an IRS process improvement team led by the Office of Taxpayer Burden Reduction.
Jump In E-filed Corporate Tax Returns Produces Record WASHINGTON – The Internal Revenue Service announced today that more than 800,000 of the nation’s Even though they have no electronic filing requirement, more than 780,000 small businesses have opted to e-file their tax returns this year, up more than 50 percent from last year. Many large corporations are voluntarily e-filing as well. The more than 42,000 large corporations that e-filed far exceeded the approximately 22,000 that were required to file by the Sept. 17 deadline. “This is a record-breaking year for electronically filed returns by corporations and businesses,” said Acting IRS Commissioner Linda Stiff. “We will continue to work with the business community, tax practitioners and the software industry to improve this important program.” Starting in 2006, certain corporations with assets of more than $50 million were required to file their Form 1120 and 1120-S electronically. Approximately 15,500 of these corporations filed their returns electronically last year. Starting in 2007, certain corporations with assets of more than $10 million were required to file electronically. “Corporations of all sizes are seeing the long range advantages of integrating their tax filing in an electronic environment along with their tax and financial accounting,” said IRS Treaty Administration Director Elvin Hedgpeth, who led the implementation of e-filing for large corporations. “While large and mid-size corporations are required to e-file, many small corporations are seeing the advantages of e-filing voluntarily.” The collaboration with corporate practitioner, software development and technology stakeholder groups has facilitated the growth in corporate e-filing,” Hedgpeth went on to say. “Software and e-filing support services have become readily available to all corporations that want to transition their tax filing from paper to electronic,” he said.
WASHINGTON — Taxpayers can now request an Employer Identification Number (EIN) through a Web-based system that instantly processes requests and generates identification numbers in real time, the Internal Revenue Service announced today. "This new and improved online application will reduce the time it takes taxpayers to get an EIN," said Richard Morgante, Commissioner of the IRS Wage & Investment Division. "Essentially they can get one while they wait –– within minutes." Here's how it works. A taxpayer accesses the Internet EIN system through IRS.gov and enters the required information. If the information passes the automatic validity checks, the IRS issues a permanent EIN to the taxpayer. If the information does not pass the validity checks, it is rejected. The taxpayer then has an opportunity to correct the information and resubmit the application. The Internet EIN application is interactive and asks questions tailored to the type of entity the taxpayer is establishing. This is similar to popular tax processing software packages on the market. The system provides "help" screens throughout the application process. This means taxpayers will no longer have to print the EIN instructions and separately search for answers while requesting an EIN. When the EIN application process is complete, a taxpayer has the option to view, print and save his or her confirmation notice, as opposed to waiting for the IRS to mail it. Third parties authorized by the taxpayer can also be provided with the EIN, but the third party cannot view, print or save the confirmation notice. Instead, the confirmation notice is mailed to the taxpayer. An EIN assigned through Internet submission is immediately recognized by IRS systems. Taxpayers can begin using the EIN immediately for most business purposes.
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small businesses and large corporations have electronically filed their tax returns so far this year, a 60 percent increase from last year.