For the thousands of taxpayers preparing to file their income-tax returns this season, Jim Colahan has some simple advice for avoiding mistakes, cashing in on opportunities and otherwise escaping the potential wrath of a dreaded IRS “notice.”

Lose the pencil. Unplug the calculator.

File electronically.

“It simplifies a lot of things,” said Colahan, a certified public accountant and director of the tax department for SS&C Business & Tax Services, which has offices in Lawrence, Topeka, Overland Park and Meriden. “Whether it’s with a professional or using software that’s off a bookshelf or doing it yourself, it’s best to e-file. :

“It used to be that you’d put the numbers down, add them up and go to a tax table and that’s the answer. Now I would be scared to do a return by hand because of all the calculations.”

The Internal Revenue Service is counting on millions of Americans to share Colahan’s opinion.

This year the IRS expects to receive 136 million individual tax returns, including 1.262 million from Kansas. Statewide, the IRS projects receiving 778,000 returns electronically, for a rate of 61.67 percent.

The increase in electronic use – last year’s electronic filing rate was 56 percent – will be expected to cut down on the number of mistakes entered by taxpayers.

A return filed electronically – whether it’s by a professional tax preparer or individuals using off-the-shelf software or the IRS’ Free File service – has about a 1 percent chance of having a mistake that could trigger a hold-up in processing, said Michael Devine, an IRS spokesman for Kansas. Returns mailed in as paper documents carry an error rate 20 times higher.

Two categories of mistakes stand out as especially common, Devine said: entering a Social Security Number or an Individual Taxpayer Identification Number improperly, and mistakenly adding, subtracting or otherwise calculating numbers that may or may not have been entered correctly.

E-filing errors away

Using a computer essentially eliminates math mistakes, Devine said, by doing all the calculations and prompting the taxpayer to enter the correct information from appropriate forms.

Reducing the likelihood for errors is important not only for the IRS but also especially for taxpayers themselves. Such problems do more than trip up a federal employee at a processing center.

“It’s something that will generate a notice from the IRS,” Devine said. “It could be as simple as saying, ‘You were wrong, we recalculated it and you’re getting a bigger return.’ Or the other side is, ‘You made an error, and you owe more,’ or, ‘You forgot to attach something, and we’re holding your return until you get this other document to us.’

“If you e-file, that’s not going to happen.”

Other errors that commonly occur on tax returns:

¢ Not attaching required forms.

¢ Claiming dependents who were listed on another person’s return.

¢ Various difficulties claiming the Earned Income Tax Credit or the Child Care Credit.

¢ Claiming deductions that are not allowed.

¢ Using the incorrect filing status.

Take notice

Injecting delays into the form-processing system triggers delays, Devine said.

A taxpayer receiving a refund and filing electronically, using direct deposit, can expect to have the refund posted in the identified account within 10 business days, Devine said.

Someone filing a paper return, and requesting a paper check, could expect to wait two months – and that’s assuming the return is filed early in the season, well before the April 17 filing deadline.

Errors simply lengthen processing times. The IRS can’t follow through with a return until the taxpayer contacts the IRS to remedy the situation, whether it’s by phone or through the mail.

“And if we’re waiting for you to do something, you’re in control,” Devine said. “Don’t procrastinate.”

Proof in place

Colahan, a Lawrence resident whose department prepares more than 300 individual tax returns at SS&C’s office in Lawrence, said that businesses almost exclusively rely on electronic filing to deal with tax issues.

Not only is it more accurate, convenient and cost-effective, he said, but having all the information on file allows taxpayers to access the data easily when applying for loans at banks or satisfying other business needs.

And that’s not all.

“You’ve got proof that it was sent. You’ve got proof they received it. There’s no question anymore about when it was filed,” he said. “We don’t even have to print a paper copy anymore.”