Paying Taxes Still Tough, But Filing Them Needn't Be

Filing a tax return is now as easy as making a phone call, ringing up a computer line, or visiting your local tax preparer's office.

You can also do it the old-fashioned way: plop your return into the mail box.

Tim Justin, a New Jersey college student says it took him all of 10 minutes to file his taxes under the new TeleFile system.

Since he uses the 1040 short form, he merely dialed up a special IRS phone number and read his earnings statement into a computer tape. "I did it late at night, around 11 p.m. The call went right through. And I had my refund in just a few weeks. Talk about simple!" he says.

Some 26 million Americans have received a special tax package for using the TeleFile system.

For most, however, tax time proves more difficult.

Complicated laws will send millions of taxpayers out for last-minute forms - or a session with a tax specialist.

Four filing formats

But the IRS says it is working to ease such woes.

Most tax filings this year will be handled quickly, says an IRS spokesman, despite the agency's admitted failure to modernize its computers.

The agency now has four basic filing methods, says spokesman Anthony Burke. "We've really tried to simplify matters," he says.

If you have a simple return, use the TeleFile phone service, as Mr. Justin did. The technology is simple: just a touch-tone phone.

Or you can have your forms delivered electronically by a third-party transmitter, such as a local tax preparation service.

Such companies usually advertise in local phone books.

For the computer literate, tax forms can zip to the IRS via PC. To find out how, ring up www.ustreas.gov. on the Internet.

Of course, a computer filing also requires tax preparation software. More than a dozen such packages are available.

Or just mail the forms.

For most taxpayers, there are four basic forms:

*Form 1040 EZ. Use it if your taxable income is less than $50,000, you are single or married and filing jointly, and you only receive wages or unemployment and bank interest.

*Form 1040A, the short form. There is still a limit of $50,000 for taxable income. But you can also list dividends, individual retirement accounts, Social Security, unemployment payments, annuities, or other retirement income.

*Form 1040, the long form. You file this form if you want to list deductions. You have to use this form if you list capital gains or sold your house. You must also file this form if you file a separate return and your spouse itemizes his or her returns.

*Form 1040 PC. This is the computerized form. It requires special software and, of course, a computer.

Faster refunds

Filing by computer has some real advantages. Burke says it is usually more accurate because the software programs catch errors.

And refunds arrive faster: in about three weeks, compared with up to 40 days for the stamp-and-post method.

What if you need special help or forms?

Just the fax

For forms, call 800-TAX FORM. You can also request forms by fax: Call (703) 487-4160, using the voice unit of your fax. The only expense is the call.

If you need personal tax assistance from the IRS, call 800-TAX 1040.

If you have a computer, and you want to look up a tax question or order a special form, slip onto the Internet and go to www.ustreas.gov.

Forms can be downloaded to you. You can also get a list of on-line transmission firms.

The IRS Web site has received more than 58 million visits this year, Burke says.

HELP IF YOU CAN'T PAY

What if you can't pay your taxes?

1. File your return on time, even if you can't pay. Include partial payment, if possible.

2. If you receive a delinquency notice, respond immediately. Ask the IRS if you can pay over time.

3. If you know before you file that you cannot pay, call 1-800-TAX FORM and request Form 9465.

This is the installment agreement. If approved, you will be charged interest and perhaps a late penalty on unpaid taxes.

4. Installment agreements must be honored monthly. Otherwise the IRS can recall the agreement and take more severe measures, such as garnishing your paycheck.

Remember, the agency prefers an amicable but reasonable agreement.

5. Never, never ignore the IRS. Always respond to notices and deadlines. If you miss deadlines, then ask for help, you'll face penalties.

6. If you are late and the IRS has become threatening, call an attorney. Negotiated settlements are possible.