VOL. 115 | NO. 61 | Friday, March 30, 2001
The April 16 deadline for filing federal income tax returns is just around the corner, but dont panic
IRS phone line makes
filing extension easier
By JENNIFER MURLEY
The Daily News
The April 16 deadline for filing federal income tax returns is just around the corner, but dont panic. The Internal Revenue Service is making it easier than ever to get an extension.
Beginning Sunday, the IRS will open a toll free number, (888) 796-1074, specifically dedicated to granting extensions.
"Part of our overall plan is to move tax filing and tax payment in the electronic direction as much as possible, which is the way a lot of our business transactions are going, not just tax returns," said Dan Boone, IRS spokesperson for Alabama and Tennessee.
"This is one more step toward making it a little easier, and more simple to get an extension for filing."
Although Boone said practically anyone could use the new telephone service, consumers must have a Form 4868, which can be downloaded from www.irs.gov, and a copy of their 1999 tax return in front of them when making the call.
The Form 4868 will be helpful when answering questions, and the automated phone system will ask questions from the 1999 return to verify the callers identity.
"You dont have to have a reason for requesting an extension the first time," Boone said. "The first one is automatically granted as long as you have completed it correctly and filed it by midnight on April 16."
The extension will give consumers an additional four months, until Aug. 15, to file a return, but it does not extend the due date for payments.
"What the filing extension does is protect you from being charged the late filing penalty, thats 5 percent per month of whatever you owe for a maximum of five months," he said. "So, it could be up to 25 percent of what you owe, if it adds up for five months."
However, consumers who owe money will still be charged interest on the balance due. The interest is compounded daily at a rate of 8 percent, on top of a 0.5 percent failure to pay penalty.
Boone said in the wake of the looming deadline, he expects to see about 400,000 last-minute tax return filers in Tennessee. Added to that number, he expects about 90,000 people in Tennessee to file for an extension prior to the deadline.
In addition to the new telephone extension service, Boone said filers have three other extension options.
First, theres the electronic option. Either using purchased software, or through a paid preparer, consumers can submit an electronic extension via the Internet.
The IRS also has a direct debit system, which automatically grants consumers an extension when they make an automated payment. By dialing (800) 2PAYTAX or (888) ALLTAXX, filers can make payments by credit card, obtaining an automatic hassle-free extension without the involvement of paperwork.
Be warned the companies handling the payment transactions charge a convenience fee of around 2.5 percent of the total charge, in addition to normal credit card finance charges.
The third option is the old-fashioned method of completing a Form 4868 and having it postmarked by midnight April 16. The hard-copy forms can also be filed at any IRS office.