An article Friday gave the incorrect number for the new IRS tax form for calculating the mortgage interest deduction,. The form is number 8598. (Published 8/17/87)

The Internal Revenue Service yesterday introduced three new tax forms, covering home mortgages, individual retirement accounts and tax-shelter losses, that tens of millions of Americans will have to fill out next year.

Tax experts said they conveyed one message: Get an accountant.

"I guarantee you if you give a form like this {the mortgage form} to most people, they are going to roll their eyeballs back in their sockets and go running for help," said Stephen G. Corrick of the accounting firm Arthur Andersen & Co.

"The rules are different, and taxpayers are going to have to contend with that," sighed Arthur Altman, chairman of the IRS's tax-forms coordinating committee. "We all know that change ... represents difficulty for some people." As he has done every time the IRS has released a batch of new forms this year, Altman said yesterday that the IRS merely is translating into tax forms Congress' rewriting of the tax code, not making taxpayers' lives miserable on its own.

More than 13 million people will have to fill out the home-mortgage interest form as part of filing their tax returns by April 15, 1988. Anyone who took out a home mortgage after Aug. 16, 1986, for a purpose other than buying a house must file the new form, number 8606. In other words, anyone who obtained a second mortgage, took out a home-equity loan or refinanced a house after that date needs to fill it out next year.

The IRS estimates that filling out the mortgage form will take each taxpayer an hour and 24 minutes. However, Altman said, many taxpayers will be able to stop after filling out only four lines of the new form. Only if the amount of outstanding debt on the house is greater than the original cost of the home plus improvements must the taxpayer make further calculations, to see whether all the interest on the loan is deductible under the new tax law. It is, for instance, if the loan proceeds are used to pay for educational and medical costs.

Altman said the IRS still is looking for ways to simplify the mortgage form, which like the others is subject to revision before being printed in October.

The IRS also released the worksheets to be used in calculating how much, if any, of a taxpayer's IRA contribution is deductible this year.

The law ended deductible IRAs for Americans covered by any kind of company pension plan, unless their adjusted gross income is less than $25,000 for a single person or $40,000 for a married couple.

Taxpayers with incomes up to $10,000 greater than those limits can make deductible contributions to an IRA of less than the full $2,000.

Along with the worksheet, the IRS issued a form taxpayers can use if they choose to make nondeductible IRA contributions, so that they will not pay taxes on the money again when it is distributed after they retire.

Filling out the IRA form -- only one-third of the 13 million Americans who contributed to IRAs in 1985 are expected to do so this year -- will take about 20 minutes to complete, the IRS estimates.

A third form, for investors in businesses they do not actively manage, will have to be filled out by an estimated 15 million taxpayers, who will take an average of an hour and 12 minutes to do the form. The provision restricting losses from so-called "passive" investments, such as rental real estate, is one of the law's more complex ones, but Altman said many of the taxpayers who will be covered by it are likely to have their own accountants.

Hypothetically, a taxpayer who has to fill out all three of the new forms as well as the basic tax return and related schedules -- which the IRS says will consume an average of nearly three hours -- could spend nearly six hours on taxes for 1987, by the IRS' figures. The time estimates, submitted by the IRS to the Office of Management and Budget as part of OMB's paperwork-clearance process, are based on statistical methods the IRS itself admits are outmoded.

To ensure that taxpayers learn what is in the new law as soon as possible, the IRS is undertaking a massive publicity campaign, including television and radio advertising and a 90-page summary of the law that will be published in the next two weeks.

For the first time, tax "packages" that include all the relevant forms and returns will be mailed to every taxpayer for whom the IRS has an address, about 90 million people. In the past, those packages have not been sent to the 44 percent of taxpayers who have someone else prepare their return.

But some taxpayers may not take the trouble to understand the details before they face the complex new forms, experts fear.

None of the forms is shorter than five pages, including instructions that are crucial to using them.

Gerald G. Portney of the accounting firm of Peat Marwick pointed out that the "passive-loss" form itself covers only one side of one piece of paper, but nearly all of the figures that it requests can be arrived at only by extensive wrestling with the accompanying four pages of instructions.

Despite the complexity of the forms and instructions, accountants found little fault yesterday with the ways the IRS had chosen to implement the highly complex provisions of the new tax law.

"As the saying goes, you can't make chicken salad without a chicken," Corrick said. "If you want a simple form, you need a simple law."

The IRS also released final versions of the basic tax returns that must be filed by all eligible Americans; the 1040EZ (the simplest form), the 1040A (the short form) and the 1040 (the long form). The only major changes were to clarify calculation of the personal exemption and standard deduction, Altman said.

The IRS also rewrote entirely its new version of the form used by employes who are not reimbursed by their employers for all of their business expenses, in order to make clearer that only 80 percent of the cost of business meals and entertainment can now be deducted