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IRS simplifies tax forms.

In its continuing effort to simplify filing and encourage compliance, the Internal Revenue Service has eliminated one form, given taxpayers fewer boxes to check on form 1040 and expanded the availability of a short form for reporting business profits.

Individuals who formerly filed form 8888 to have their refunds sent directly to their bank accounts now need only record their account information on forms 1040, 1040A or 1040EZ. Form 8888 has been dropped. Eliminated from the 1040 are the boxes for a filer's claim as a dependent, the tax computation method the filer used, form 1099 withholdings, and a line for recording recapture taxes. These deletions shorten the 1040 by three lines.

An additional 400,000 small business owners can file schedule C-EZ, a simplified form, to report their profits, because the IRS removed the $25,000 gross receipts limitation and increased the business expenses limit to $2,500.

The IRS issues advance proofs of some tax forms to give those interested the opportunity to comment or make suggestions on how to improve or simplify the forms. For a copy of Publication 1407, the advance forms package, write to the IRS, P.O. Box 25866, Richmond, Virginia 23289-5866, or contact the IRS home page at http://www.irs.ustreas.gov.
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Publication:Journal of Accountancy
Article Type:Brief Article
Date:Nov 1, 1996
Words:210
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