It's tax return time again and the forms are more complicated than ever before because of revisions in the tax law ordered last year by Congress.
This year, as in the past, the Internal Revenue Service is ready to help ease the April 15 blues. Workers will help you prepare your federal return at any one of three IRS offices in the District of Columbia.There is no charge for the service.
You can also call a local toll-free number - 488-3100 - for tax advice. There is a special toll-free number - .800-428-4732 - for deaf taxpayers who have access to a TV-phone/teletypewriter (TTY).
Faced with more complicated forms, people are pouring into IRS offices for help this tax season the agency reports. In one local office, the number has already jumped 51 per cent over the same period last year. While there are peak-hour, standing room-only crowds at some offices, taxpayers who plan ahead can still get help with little delay. Service is faster on Wednesdays through Fridays, before 9:30 a.m. and after 3:30 p.m. The same applies to telephone help.
While the IRS tries to make sure its tax advice is correct, its employees can and do make mistakes. Nevertheless, taxpayers are responsible for their own returns regardless of who prepares them, and may have to pay additional taxes if they are audited. There is one exception to this rule. The Tax Reform Act of 1976 provides that if the IRS makes a mathematical error in preparing a return, it may not charge the taxpayer interest on any additional tax that results from the error.
WHERE TO GO FOR HELP
Here are IRS recommendations on where to go for help, documents to bring with you, free tax pulications to ask for, steps to take if you have trouble with your refund, or if the agency audits your return and sends you a bill.
The IRS has three taxpayers assistance offices in D.C. The largest and only permanent one is downtown at 1201 E St. NW (seventh floor). There is public parking across the street ($1.05 an hour). The office is spruced up this year, with comfortable new chairs and colorful room dividers for tax-payer privacy. There are racks of tax forms downstairs in the lobby and upstairs in the waiting room. IRS forms and publications are also available on the seventh floor in a room just to the right of the elevator.
A receptionist in the taxpayer service office will take your name if you want help preparing your return. She will give you a number if you have questions for one of the three employees stationed at counters in the waiting area. Plan to spend an hour, not counting waiting time, with your helper if you want in-depth assistance in preparing an itemized return. The employee will seat you at a private table away from the crowd, help you complete your return and have it double-checked by someone else before you leave.
If you do not understand the advice you receive, or sense uncertainty on the part of the adviser, ask to have the matter checked with a specialist. You should also ask the employee to cite law or regulation that applies. The law is complex, and IRS employees can make mistakes.It's your money, so speak up if you have doubts.
There are 12 taxpayer service employees at 1201 E Street, and another 12 tax auditors or revenue agents who can help when necessary.
The other two D.C. offices are on Capitol Hill, in Room 24 of the Russell Senate Building and Room 321 of the Cannon House Building.
The quality of tax assistance in these two temporary offices is topnotch because it is intended mainly for members of Congress and other Capitol Hill employees.However, the service is also open to the public. There are two highly skilled revenue agents in each office. They ordinarily spend their time auditing complex returns, but shift to tax help during the filing season. This is your best bet for getting correct answers to complicated questions. You can get ordinary tax forms in these offices, but you must go to 1201 E St. NW for most other IRS publications.
Parking on Capitol Hill is difficult. Plan to take the bus or subway. TAX FORMS AND PUBLICATIONS
The IRS puts out 354 different tax forms and 79 free publications to clarify the law.They are available at all offices except Capitol Hill, where there is only a limited assortment. You can also order IRS publications by calling the toll-free number - 488-3100. If you are in a hurry go to an IRS office. The agency has to mail telephone orders to a distribution center in Richmond, Va.
IRS publications are helpful because they explain the agency's view of the law. The most popular and comprehensive is a 192-page tax guide, "Your Federal Income Tax," (Publication 17).
You can compare your situation to the examples in the guide. You can also study filled-in tax forms, and gas and sales tax tables. This guide compares favorably with commercial ones available at newsstands, and it is free. However, it does not describe situations where courts have taken positions more advantageous to taxpayers than the IRS has. You also may not rely on IRS publications as authority for the tax treatment you get. Although you follow the official guide, you can still be challenged by the IRS, go to court, and lose. The same is true of commercial guides.
One warning: This year the guide contains some errors. Be sure you get a one-page correction sheet with your copy.
Other publications put out by the IRS cover a wide range of tax matters, and should be consulted if something unusual occurs during the year. For instance, there are bulletins on taking deductions for bad debts (Pub. 548), income averaging (Pub. 567). You can find out about recent changes in the law by reading Pub. 553. Another pamphlet, Pub. 586, "The Collection Process," explains your rights and IRS procedures if you fail to pay our taxes.
"Your Federal Income Tax," has a complete list of the publications on page 192. There is a shorter list on page 39 of the Form 1040 instructions. FILLING OUT YOUR TAX FORMS
The IRS will help you prepare your return without charge but you must make some careful preparations. First, read the instructions for the form (1040 or 1040A) and study the form itself. Make a list of all of the information needed to complete your return, including your social security number, number of dependents, types and amounts of income, and expenses incurred during the year.
Take the list and your W-2 form (wage and tax statement provided by employer) to the IRS office. Do not take a shopping bag full of bank statements, canceled checks, stock certificates or receipts. The IRS helper will explain the law and use the list to help you fill out each line of your return. If you are clearly unable to do it yourself, the employee will complete the return for you. In either case, your helper must sign the return as the preparer. This does not mean that he or she is responsible for errors. If the IRS audits your return and assess more tax, you can't escape payment because the agency made a mistake. However, you do not have to pay interest if the IRS makes a mathematical error on your return.
Errors are common because the law is complex. An IRS study of returns filed in 1972 shows that the agency's employees made mistakes on 15 per cent of the standard deduction returns and 74 per cent of the itemized returns prepared for people with adjusted gross incomes of less than $10,000. However, error rates for commercial prepares were even higher - 30 per cent for standard deduction returns and 78 per cent on itemized returns in the under $10,000 category. The mistakes involved incorrect applications of the tax law, not mathematical errors.
Once your return is filled out, check it for mistakes and make a copy for your files. You can use the copy as a guide next year, and you will need it if your return is questioned or lost.
Mail the original to the IRS Service Center for your area. Sea Form 1040 or 1040A instructions if you did not receive a return envelope in the mail. Make a note of the date you mailed your tax return. This will be important if you have trouble getting your refund. IF YOU DO NOT RECEIVE YOUR REFUND
You should receive your refund four to six weeks after filing your return. If the IRS does not mail it by May 31, it must pay 7 per cent interest on the amount it owes you.
The IRS mails out 68 million refund checks each year. Not surprisingly, it sometimes makes mistakes. The check may be larger or smaller than you expected, or it may not arrive at all. If the check seems wrong, be patient. You should get an explanatory notice within two weeks. If you do not receive such a notice or if your refund does not arrive at all, the IRS recommends that you take the following steps.
1. Call the toll-free number - 483-3100.Keep a record of the date, time and name of the employee you speak to, and copies of any documents you are asked to send to the agency. Explain the problem and tell the employee your name, address, social security number, telephone number and the date you mailed your return. If the employee does not aks for this information, nothing is likely to be done about your complaint. Find out when the employee intends to return your call. If you do not receive a return call, or the response is unsatisfactory, take step two.
2. Call the toll-free number and ask for the taxpayer service group supervisor, Regina Knight. If you are not satisfied with the response, take step three.
3. Call the toll-free number and ask for the chief of the taxpayer service division, Charles W. Brooks. If your problem is not solved at this level, take step four.
4. Write to the district director, the top IRS official in your area. Explain the problem, and each step you have taken to solve it. Send your letter by registered mail, and request a receipt. Write to: Gerald Portney, IRS District Director, 31 Hopkins Plaza, Baltimore, Md. 21201. IF YOU ARE AUDITED
If you receive a refund do not assume that the IRS has accepted your return as correct. It has three years to examine it after you file - forever if it believes fraud has occurred. IRS TAXPAYER SERVICES(TABLE) LOCATION(COLUMN)HOURS(COLUMN)SPECIAL (COLUMN)(COLUMN)HOURS D.C.(COLUMN)(COLUMN) Russell Senate Office Building(COLUMN)8:30 a.m.-4 p.m.(COLUMN)None Room 24(COLUMN)(COLUMN) Constitution & First Street SE(COLUMN)Mon.-Fri.(COLUMN) Cannon House Office Building(COLUMN)8:30 a.m.-4 p.m.(COLUMN)None Independence & First Street SE(COLUMN)(COLUMN) Room 321(COLUMN)Mon.-Fri.(COLUMN) 1201 E St. NW.(COLUMN)8:30 a.m.-4:45 p.m.(COLUMN)April 15 (COLUMN)Mon.-Fri.(COLUMN)8:30 a.m.-7 p.m. IRS TELEPHONE NUMBERS(COLUMN)(COLUMN) (Information, forms)(COLUMN)(COLUMN) D.C. - 488-3100(COLUMN)8:45 a.m.-7 p.m.(COLUMN)April 15 (COLUMN)Monday(COLUMN)8:30 a.m.-7 p.m. (COLUMN)8:45 a.m.-5 p.m.(COLUMN) (COLUMN)Tues.-Fri.(COLUMN) TV-phone/Teletypewriter (TTY)(COLUMN)8:30 a.m.-5:45 p.m.(COLUMN) Number (information, forms)(COLUMN)Mon.-Fri.(COLUMN) 800-428-4732(COLUMN)(COLUMN)(END TABLE)