Electronic tax filings rise sharply Effect of rule change and outreach efforts by state officials

Many happier returns

It means faster refunds and a reduction in processing costs

Maryland taxes

April 08, 1996|By Timothy J. Mullaney | Timothy J. Mullaney,SUN STAFF

The percentage of Marylanders who file their tax returns electronically is up more than 15 percent this year, reflecting the state's outreach efforts among tax preparers and a rule change to let people who owe additional taxes file electronically.

With a little more than a week to go, almost 115,000 Maryland tax returns had been filed electronically by Friday, said Marvin Bond, spokesman for state Comptroller Louis L. Goldstein. Only about 98,000 used electronic filing during last year's tax season.

For consumers, the big difference was the state's decision to drop the rule that only returns due a refund could be filed electronically. Now, Maryland lets people who owe additional taxes file their information electronically, then the comptroller's office sends the taxpayer a bill for what's owed. The bill is payable April 15.

"The electronic filing is such a saving to us that it really is no different than if you had filed a paper return and sent in a check," Mr. Bond said. "The bottom-line processing cost is about the same."

He added that the new system lets the state even out its work flow by encouraging people who owe money to file early. Before the rule change, people who owed money with their return would do their paperwork as early as February, then sit on their returns until the deadline in order to hang on to their money as long as possible, he said.

Also, tax preparers no longer need separate software to file state and federal returns electronically. Mr. Bond said the added cost of state software kept some smaller preparers from offering electronic filing of Maryland returns.

Now, preparers send both returns to the federal Internal Revenue Service, and the state downloads state tax returns from the IRS computer.

Both state and federal tax authorities encourage electronic filing because it cuts processing costs. The big inducement to consumers is that their refunds can be processed much faster if they file electronically, since it cuts out the labor-intensive task of data entry.

At the federal level also, electronic filing is growing quickly this year.

Through March 31, the number of electronic returns filed through tax preparers is up 7.2 percent to about 10.7 million, said Domenic LaPonzina, spokesman for the IRS district office in Baltimore. On top of that, 2.5 million people have used the IRS' telephone filing system, called TeleFile, which became available nationally this year after being tested in selected cities in the past. The system guides taxpayers through a series of questions that they answer by pressing keys on a Touch-Tone phone.

TeleFile is open to taxpayers who are single, earn less than $50,000 annually, can use the ultra-simple Form 1040EZ to file their returns and live at the same address they reported on last year's taxes. The IRS estimated last year that up to 23 million Americans would be eligible to use TeleFile.

Mr. LaPonzina said that by March 31 the IRS had received 61.1 million returns, out of an expected 115 million. Almost 42 million refunds had been sent out, with the average refund at $1,250.

He said the district office, which serves Maryland, Delaware and the District of Columbia, expects to get 700,000 to 800,000 of its 2.9 million returns in its last week.

Mr. Bond said the state has received 1.4 million of the 2.25 million returns it expects, and mailed its millionth refund Tuesday. The average refund is about $450.

Pub Date: 4/08/96

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