For tax procrastinators, day of reckoning has arrived
WASHINGTON (AP) – The day of reckoning has arrived for the estimated 26 million taxpayers who have not finished their income tax forms.
The filing deadline for taxpayers in most parts of the country is midnight Monday. In parts of the Northeast, people have until midnight Tuesday because of the Patriot’s Day holiday in Massachusetts, home to an Internal Revenue Service center.
Getting that extra day are taxpayers in Massachusetts, Maine, New Hampshire, Vermont, Connecticut and Rhode Island, and in New York state north of Westchester and Rockland counties.
In their rush to file, tax procrastinators should double-check their math and take care to use the correct tax amount from the tax table, the IRS advises. One way to save possible headaches later on is to correctly list Social Security numbers, including those for dependents.
IRS spokesman Don Roberts estimated that roughly 37 million tax returns would be filed in the final two weeks before the deadline – 11 million last week and 26 million postmarked or electronically filed on Monday. About 130 million individual returns in all are expected this year.
Many post offices around the country will be open late to handle returns. The IRS accepts a postmark as proof the return was filed on time.
Taxpayers can request an automatic four-month extension, but they should pay their estimated taxes on time. Otherwise, the IRS will assess a late-payment penalty and interest currently running at 8 percent.
Extensions can be obtained by phone by calling (888) 796-1074 – some information from the 1999 return is needed to verify identity – or with Form 4868.
Those who owe money should mail a check or money order made out to ”United States Treasury,” rather than the IRS, and include a Social Security number, the year and the type of form filed. For most people this would be ”2000 Form 1040.”
For people facing a big tax bill they cannot pay all at once, the IRS offers several options. One is credit-card payment through one of the two toll-free numbers: (888) ALL-TAXX or (800) 2PAYTAX.
The call is free, but the companies that run the services for the IRS collect a convenience fee for the transaction. The IRS points out that it gets none of this money, nor does it collect and store credit-card numbers.
The IRS also will most likely approve a request for an installment payment plan if the taxpayer owes less than $25,000 and can pay within a five-year period. To obtain such a plan, attach Form 9465 to the front of the return; there is a $43 fee to set up an installment plan, which carries 8 percent interest and a penalty of 0.25 percent per month once it is approved by the IRS.
The IRS has a program for people with big debts they cannot possibly pay. Known as the offer-in-compromise program, it allows taxpayers to negotiate a lower settlement of their tax debt.
The program has become so popular that the IRS has a huge backlog. The General Accounting Office, which is the investigative arm of Congress, estimated that the number of offers grew from 32,300 in 1997 to 87,500 in 2000.
”That is actually one of our problem areas,” said IRS Commissioner Charles Rossotti. ”It’s going to take some time to get the backlog down.”
On the Net:
Internal Revenue Service: http://www.irs.gov
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