
                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: FRIDAY, February 24, 1995                   TAG: 9502240109
SECTION: NATIONAL/INTERNATIONAL                    PAGE: A1   EDITION: METRO 
SOURCE: THE WASHINGTON POST
DATELINE: WASHINGTON                                 LENGTH: Medium

IRS DELAYS IRRITATE TAXPAYERS

Six weeks into this year's tax-filing season, the Internal Revenue Service's anti-fraud efforts have held up refunds to more than 800,000 people and caused filing problems for hundreds of thousands, perhaps millions, of others, according to the agency and angry tax preparers around the country.

The delays are widespread among low-income taxpayers seeking extra refunds under programs such as the earned income tax credit, which is meant to boost the income of poor working families. In many cases, these credits are being held as long as two months or more.

And when the IRS does pay the refund, it does so with a regular paper check rather than a direct deposit into the taxpayer's bank, ignoring requests for the quick electronic transfer because of computer programming problems.

``We are seeing angry people, we are seeing disappointed people, we are seeing desperate people,'' said Harry W. Buckley, chief executive of H&R Block Tax Services Inc. in Kansas City, Mo.

He and other tax professionals say frustrated taxpayers are venting their wrath on preparers, demanding to know why their refunds have been held up, and the companies say they don't know what to tell them.

``I've been in this business 26 years and I've never seen so much abuse - abuse of our receptionists, preparers and supervisors - as I have this year,'' said John T. Hewitt, chief executive of Jackson Hewitt Tax Service in Virginia Beach, Va.

Buckley said 15 percent to 20 percent of the returns his company files are being rejected because of Social Security number problems, and 30 percent of returns involving the earned income credit are being held up. Hewitt said he is seeing as many as half of those returns held up.

The IRS has been under heavy pressure to cut down on fraud . It is checking all Social Security numbers on every return, including spouses and dependents, and will reject any in which there is a mismatch. The IRS also has developed computer programs that scan returns for signs of fraud schemes and will delay refunds if anything suspicious turns up, agency officials said.

by CNB