The efforts of the IRS to update its computer system have been fairly laughable for years. The website of the agency, however, is something to marvel at. More importantly, it keeps improving. The big move now is to give you, me and every taxpayer the ability to do many filings online. This, of course, reduces a bit of the panic factor.
The new IRS program is called FIRE. It doesn’t refer to audit techniques, but to “Filing Information Returns Electronically.” The name is still a bit misleading. You cannot actually file your 1099s, W-2s, etc, online. What you can do, however, is file your extension requests online and get a reply quickly.
In technical terms, the FIRE program can be used instead of the paper filing of form 8809, which is the time extension request form for most information returns. To take advantage of the program, you need to go to the IRS site. Once there, do a search for FIRE. If you have a user ID, you can file for and receive an automatic 30 day extension for your information returns. Ah, but what if you don’t have a user ID? You can go through a 5 to 10 minute sign up process on the same page.
The Internal Revenue Service is clearly making a major effort to switch to a digital format as much as possible. The downside of this is the giant database the agency will have will be scary. The upside is you will find tax filings less onerous. Of course, you need to make sure you print out every acknowledgement of your online filings so you can prove you have them should the IRS later claim they were never filed!
Richard A. Chapo is with BusinessTaxRecovery.com - providing information on federal income taxes for taxpayers.