In the depths of the District's financial crisis, thousands of tax records were stacked in loose piles in a basement "file room," making it impossible for officials to keep track of how much money was coming in.

Today, the records are kept electronically by the city's tax and revenue agency, which has reversed course dramatically. The reforms are especially evident in the way taxes are being collected this year: The District is even offering to prepare income tax returns for free, an improvement that exceeds the level of service offered by many states.

In an effort to make filing taxes easier and faster, especially returns filed electronically, D.C. tax and revenue officials also announced this week that residents can pay their individual income taxes with a Discover, American Express or MasterCard credit card, although a processing fee ranging from $3 to $25 will be tacked on.

Flanked by Internal Revenue Service officials, D.C. Deputy Chief Financial Officer Natwar M. Gandhi said residents can file returns by telephone, by calling 800-743-3320, provided they are single, make less than $100,000 a year and have no dependents, among other conditions.

The tax filing changes are a contrast to the mid-1990s, when tens of millions of dollars in revenue was not collected because of agency-wide dysfunction.

Since then, Gandhi has led a vast reshaping of the department, which collects nearly $2.7 billion in taxes a year.

"There's a general feeling now the District's tax laws can't be taken lightly," Gandhi said.

He invited people to call 800-380-3495 if they know someone who has failed to file a D.C. return or is cheating on one.

Tax officials have set up a customer service center at 941 N. Capitol St. NE, a few blocks from Union Station, where individual, property and business tax-related issues can be resolved at one of 13 windows.

To take advantage of the free tax preparation, residents must bring their completed federal income tax return--including all documentation such as W-2 forms--to the customer service center. Separately, the IRS is offering free tax help to low-income and elderly residents throughout the Washington area.

Residents may continue to file taxes electronically, either through a tax preparer or a commercial online filing service such as Intuit. Nearly 16,000 D.C. residents filed returns by home computer last year.

District and IRS officials emphasized the advantage of filing electronically, not the least of which is receiving refunds faster. It takes an average of five weeks to receive a federal tax refund if the return is filled out by hand, compared with 2 1/2 weeks if the return is electronic, IRS officials said. The delay for hand-written returns grows to seven weeks in April, but the 2 1/2-week turnaround on electronic filings does not change, officials said.

"What we're trying to do is move away from paper as much as possible," Gandhi said.