IRS News Release  
March 03, 1995

The Internal Revenue Service Called

WASHINGTON - The Internal Revenue Service called today's announcement by Beneficial National Bank and Beneficial Tax Masters, Inc., of their decision to discontinue their lawsuit an "appropriate decision."

In their suit, the Beneficial National Bank and Beneficial Tax Masters, Inc., had sought to force the IRS to discontinue mailing paper refund checks to some taxpayers who had requested a direct deposit of their refunds.

During the current filing season, in some circumstances, the IRS is delaying part of a taxpayer's refund in that the taxpayer is entitled to the refund. If the taxpayer has requested that a refund be deposited directly, the first refund check is deposited into the taxpayer's account. However, the IRS was unable to complete the programming changes necessary to avoid the mailing of a paper check for the remainder of the refund.

The IRS further indicated that it expects to complete by the 1996 filing season the necessary programming changes to provide the ability to directly deposit the second refund checks in those the taxpayer requests a direct deposit.

The IRS said that it confirmed its long standing plan to maximize the number of refunds that are issued electronically as part of the agency's plans to eliminate paper and increase electronic filing and payments.

In confirming the change for next year, the IRS indicated that, as in the past, it would continue to exercise its right to issue paper checks in appropriate circumstances, even if the taxpayer requests a direct deposit.

This year the Internal Revenue Service has increased its screening and review of all returns to ensure that only those taxpayers entitled to refunds receive them. The IRS urges all taxpayers to take time to check and make sure they file accurate returns this year.

"I cannot emphasize enough how essential it is for taxpayers to have complete and accurate information on their returns," said Margaret Milner Richardson, Commissioner of Internal Revenue. "Taxpayers should double check the accuracy of their social security numbers."

The IRS also suggests that taxpayers who are eligible for the Earned Income Tax Credit should apply for the Advanced Earned Income Tax Credit. By applying for the advanced credit, eligible workers can receive up to 60 percent of their credit in their paychecks during the year. For taxpayers who qualify for the maximum credit in 1995, the advanced credit could increase their monthly take-home pay by $105.

The IRS advised taxpayers receiving large refunds to review the withholding certificates they have filed with their employers to ensure that they claim all the withholding allowances to which they might be entitled.

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