IRS Debunks Tax Myths

WASHINGTON - There's just one problem with some of the "tax wisdom" you may hear each filing season -- it's dead wrong, according to the Internal Revenue Service.

For example, some people claim that early filers are more likely to be audited, but, in fact, when you file has no effect on your tax return's chances for being audited. IRS computers score every return based on the various entries and their relationship to one another. These scores are the primary means of selecting returns for examination. Programmers develop the formulas for this system before the tax year starts and apply them to all returns that year. A return filed in February gets the same score as it would get if filed in June.

Last year, less than half of the returns had the name label from the filer's tax package attached. In some cases, this may have resulted from a mistaken belief that the label is linked to audit selection. Infact, the label has no secret codes -- the tax instructions even have an illustration explaining all the label's contents. Use of the label helps reduce the chance for error and cuts the processing cost.

Some say that tax law is so complex that most people need professional help. In fact, just over half of all taxpayers prepare their own returns. IRS efforts to simplify the forms made the short form 1040A available to senior citizens in 1991 and this year offered Form C-EZ for qualifying small business owners to report their profits. For those doing their own returns, the IRS offers both live assistance and recorded tax tapes -- check the tax form instructions for details.

Another myth is that calling the IRS tax help line will make the agency look closer at your return. In fact, IRS assistors do not ask callers their names or social security numbers, unless needed to resolve a tax account matter.

Some think that you must be a minimum age before you file a tax return, or that once you reach a certain age you can stop filing. Still others think that once you file, you must keep filing if you have any income. In fact, there are specific income thresholds that determine whether you must file, depending on your filing status. The amounts change each year because of inflation adjustments and are higher for those 65 or over. Over a million low income tax returns are filed unnecessarily each year, with the largest group coming from 65 or older.

As of Feb. 12, the IRS had received nearly 24 million returns, down 10 percent from the same time last year, and had sent out over 6 million refunds. At $1,140, the average refund is up 1.6 percent.

                     1993 FILING SEASON STATISTICS

         Cumulative through the week ending 2/14/92 and 2/12/93

                    1992                 1993              % Change


Individual Income Tax Returns

Receipts            26,439,000           23,707,000        -10.3
Processed           14,098,000           13,229,000         -6.2


Filing Alternatives  -- Total Receipts:

Electronic Filing    6,229,000            7,019,000          12.7
1040PC Format          183,000              529,000         189.9
Telefile                88,000               97,000          10.2


Refunds Certified by the NAtional Computing Center:

Number               6,513,000            6,304,000         -3.2
Amount of principle   $7.305 billion       $7.186 billion   -1.6
Average Refund        $1,122               $1,140            1.6

    (NOTE:  these amount should NOT be compared to the "processed"
            numbers above, since those figures reflect Service
            Center processing, which is completed at least a week
            before refunds are certified at the Computing Center)


Taxpayer Service Filing Season Statistics

                          through 2/15/92       through 2/13/93

Toll free calls
  answered                6,400,327             6,199,287

Tele-Tax calls            4,604,598             5,037,603
  Technical tapes         1,743,997             1,845,416
  Refund Info.            2,860,601             3,192,187

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