Federal/State E-Filing Up Sharply

WASHINGTON - More taxpayers are filing their federal and state income tax returns in one action when they file electronically. With Federal/State e-filing, one transmission carries the taxpayer's federal and state information to the Internal Revenue Service. The state tax agencies then retrieve the state tax return data from the IRS for processing.

As of Feb. 20, nearly 3.7 million taxpayers -- over one-third of the 10.7 million who used standard, or computer-based, e-filing -- included a state return, up 32 percent from the same period last year. The IRS TeleFile system does not include state returns, but 19 states have their own file-by-phone systems.

Thirty-two states allow all taxpayers to use the IRS e-filing system to file their state returns. In addition, Arizona and the District of Columbia are conducting limited tests of the IRS program. Three other states -- California, Massachusetts and Minnesota -- have independent e- filing programs for state returns but do not participate in the federal program. Only five states with income taxes have no e-filing option for state returns -- Hawaii, Maine, North Dakota, Ohio and Vermont -- but North Dakota and Ohio will participate in the IRS program next year.

E-filing offers an earlier refund, greater accuracy, and acknowledgment from IRS and the state agency that they accepted the returns.

EDITORS: The 32 states fully participating in the Federal/State
e-filing program are:

Alabama       Indiana       Missouri       Oregon
Arkansas      Iowa          Montana        Pennsylvania
Colorado      Kansas        Nebraska       Rhode Island
Connecticut   Kentucky      New Jersey     South Carolina
Delaware      Louisiana     New Mexico     Utah
Georgia       Maryland      New York       Virginia
Idaho         Michigan      North Carolina West Virginia
Illinois      Mississippi   Oklahoma       Wisconsin

Nine states have no state income tax: Alaska, Florida, Nevada, New
Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming.


1998 FILING SEASON STATISTICS
Cumulative through the week ending 2/21/97 and 2/20/98

                           1997           1998      % Change  
Individual Income Tax Returns:   
Total Receipts          32,036,000      31,582,000    - 1.4
Total Processed         18,514,000      20,530,000     10.9

E-filing -- Total Receipts:   
Standard E-file          9,058,000      10,739,000     18.6
TeleFile                 3,003,000       3,750,000     24.9

Refunds Certified by the Martinsburg Computing Center:
Number                  17,030,000      18,933,000     11.2
Amount of principal    $25.951 bil.    $29.388 bil.    13.2

Average refund           $1524           $1552          1.9

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