IRS Offers Filing Extensions
to Those Who Can't Pay

WASHINGTON - April 15 is just around the corner and you realize that you'll never be ready to file by then. What's worse -- you know you owe money and don't have it. This year, the Internal Revenue Service has a new solution for you.

For the first time, the IRS will now accept an application for an automatic four-month extension of time to file, even if the taxpayer can't pay what's owed with the extension. In the past, if a taxpayer filed an extension, IRS would consider the request invalid and assess the failure-to-file penalty on the delinquent return. The failure-to-file penalty is 5 percent per month on the balance due on the return, not to exceed 25 percent.

To get an automatic four-month extension of time to file, taxpayers should file form 4868, Application for Automatic Extension of Time to File U.S. Individual Income Tax Return, and properly estimate their tax liability. Current instructions for Form 4868 and other IRS publications still state that all tax must be paid by April 15. The IRS will update these instructions for 1993 returns to reflect the new rules.

Even with the extension, there are interest charges on any taxes paid after April 15. If payments made by April 15 are less than 90 percent of the total tax, there is a late payment penalty of 0.5 percent of unpaid taxes per month. To keep these charges as low as possible, the IRS advises taxpayers to pay as much as as they can as soon as they can. Taxpayers may even make payments before they actually file their returns.

Any taxpayer making payments before filing should be sure to include on the checks all the information necessary to credit the money properly -- social security number (SSN), the tax year and the form number. Example: SSN 123-45-6789, Tax Year 1992, Form 1040. Joint filers should use the primary SSN -- that is, the number that will appear first on their return.

Taxpayers who still cannot pay the taxes owed by Aug. 15 extended due date should file their returns and attach Form 9465, Installment Agreement Request. This form allows taxpayers to request a monthly payment plan and specify the amounts they are able to pay each month.

It may be too late to call the IRS and get the extension form by mail but Forms 4868 and 9465 are available in local IRS offices. Some libraries have reference sets of forms for photocopying -- among them, Form 4868.

As of April 2, the Internal Revenue Service had received 62.8 million returns, nearly 7 percent fewer than for the same period last year. The IRS has sent 44 million refunds, worth a total of 42.75 billion. At $971, the average refund is down 0.6 percent.

             1993 FILING SEASON STATISTICS  
 Cumulative through the week ending 4/3/92 and 4/2/93

                         1992            1993    % Change
Individual Income Tax Returns
Total Receipts        67,432,000      62,825,000   -6.8
Total Processed       58,919,000      54,450,000   -7.6


Filing Alternatives -- Total Receipts:
Electronic Filing     10,122,000      11,379,000    12.4
1040PC Format            865,000       2,570,000   196.9
TeleFile                 119,000         138,000    16.0


Refunds Certified by the Martinsburg Computing Center:
Number                47,181,000      44,037,000    -6.7
Amount of Principal   $46.071 bil.   $42.751 bil.   -7.2
Average Refund          $976            $971        -0.6

(NOTE: these amounts 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 4/2/92         through 4/3/93
Toll-free phone
 calls answered       14,625,366              14,628,737

Tele-Tax calls        24,544,936              21,839,798
   Technical tapes     3,425,356               3,569,192
   Refund Info.       21,119,580              18,270,606

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