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The Internal Revenue Service has published eleven new Fact Sheets covering a range of filing and payment related matters, as follows:
Changes made to the tax law in 2005 may affect your tax situation
A new uniform definition of a qualifying child, special rules for car donations, higher standard mileage rates and expanded retirement savings incentives are among the changes individual taxpayers will find when they sit down to prepare their 2005 federal income tax return.
Highlights of 2005 Tax Law Changes
The IRS offers free assistance to taxpayers through a variety of means
The IRS offers free assistance by computer and telephone and in person. The IRS can help taxpayers get forms and publications and answer a wide range of tax questions. The IRS can also help find free tax preparation services for those who qualify.
Free Tax Help Available
IRS sending tax packages, computer filing post cards, brochures on electronic filing and Form 1040-V payment vouchers
The Internal Revenue Service will send taxpayers almost 17.7 million tax packages and 15.5 million computer filing post cards this year. The tax packages cost nearly $6 million for printing and $5.1 million for postage for an average overall cost of 63 cents per tax package. The 4-page post cards describe the advantages of e-filing and cost about 20 cents each. For all products, the average overall cost is 42 cents per piece. Most people will get their tax packages in early January. The IRS expects to receive about 135 million individual tax returns in 2006.
Tax Packages for the 2006 Filing Season
Good reasons for taxpayers for electronically filing their tax returns
More and more Americans are choosing e-file, which lets them electronically file an accurate tax return or get an extension of time to file without sending any paper to the Internal Revenue Service.
2006 IRS E-file
Electronic filing and payment options
Taxpayers can pay taxes electronically by authorizing an e-pay option such as an electronic funds withdrawal from a checking or savings account or by paying with a credit card. Taxpayers making more than one estimated tax payment may want to enroll in EFTPS.
Electronic Payment Options for 2006
Toll-free number and other resources for hurricane victims
For hurricane victims who need help with tax matters, the IRS has a dedicated toll free number to call, 1-866-562-5227. The IRS Web site also features a special section with the new tax laws and resources for hurricane victims, including answers to frequently asked questions.
IRS Offers Filing Season Assistance to Hurricane Victims
Tips on how to reconstruct tax and financial records that were destroyed in a disaster
Reconstructing records after a disaster may be essential for tax purposes, getting federal assistance or insurance reimbursement. Records that you need to prove your loss may have been damaged or destroyed in a disaster. While it may not be easy, reconstructing your records may be essential.
Reconstructing Your Records
Options for hurricane victims who have difficulty obtaining documents
Some taxpayers affected by Hurricanes Katrina, Rita and Wilma may have difficulty obtaining 2005 Form W-2, Wage and Tax Statement, and other 2005 information documents.
Substitute Forms W-2 for Hurricane Victims
Claiming either state and local income taxes or state and local general sales taxes
Under the American Jobs Creation Act of 2004, taxpayers who itemize their deductions have the option of claiming either state and local income taxes or state and local general sales taxes. Tax Year 2005 is the last year that the law allows taxpayers the option to deduct state and local general sales taxes, although pending legislation may extend this option to future years.
Taxpayers Can Claim General Sales Taxes Instead of Income Taxes as Itemized Deduction
IRS audits to verify that tax returns are correct
Selecting a return for examination does not always suggest that the taxpayer has either made an error or been dishonest. Some examinations result in a refund to the taxpayer or acceptance of the return without change.
The Examination (Audit) Process
Collection proceedings against taxpayers who do not pay the taxes they owe
If a taxpayer does not pay, the IRS sends the taxpayer a bill. This begins the collection process. Along with the notice, the IRS automatically sends Publication 1 Your Rights as a Taxpayer and Publication 594 Understanding the Collection Process.
The Collection Process
...back to 5 January 2006 |
For Payroll and Human Resource Professionals
