Newspaper article St Louis Post-Dispatch (MO)

Uncle Sam Goes On-Line with Methods for Tax Filing

Newspaper article St Louis Post-Dispatch (MO)

Uncle Sam Goes On-Line with Methods for Tax Filing

Article excerpt

If you've wanted an up close and personal electronic mail relationship with the Internal Revenue Service, you may get your chance.

The IRS will soon announce procedures to allow 30,000 subscribers of CompuServe and America Online to send in their tax returns via modem.

It's the latest in a series of accommodations the IRS has made to tech up our taxes.

Over the past several years, the agency has approved electronic filing for most taxpayers and dabbled in telephone filing.

The IRS now accepts abbreviated computer-crafted tax forms, dispenses advice via voice mail and takes orders for booklets and forms through the major online services.

So, what good is all this modernization? Does it make filing taxes easier, quicker, cheaper or audit-proof?

Yes and no.

Taxpayers need to sort through each advancement to decide what works and what doesn't.

Think of software, modems and voice mail as hammers, wrenches and screwdrivers. You only want the ones that are right for the job.

Here's a brief guide to "techno-tax 1995."

Electronic filing: Last year, 13.5 million taxpayers thought this was right for them. Pay a preparer about $15 for the privilege, and your return gets wired directly into the IRS computer system.

The advantages are a quicker refund and protection against IRS re-typing errors.

Among its disadvantages: $15 may be a high price to pay, depending on amount you get back from the IRS. And taxpayers who pay a preparer for a "refund anticipation loan" are paying dearly for the money.

Some preparers believe electronic filing makes you more liable for an audit because the IRS already has your form in a database, searchable format, but this has never been proven.

FedState Filing: Some 29 states allow single transmission electronic filing of federal and state returns. No separate forms, no separate phone calls. This might be worth the $15. …

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