Academic journal article Journal of Accountancy

GAO Studies Benefits of Alternative Tax System

Academic journal article Journal of Accountancy

GAO Studies Benefits of Alternative Tax System

Article excerpt

As many as 51 million taxpayers, or 45% of those who filed 1992 tax returns, no longer would have to prepare returns if the Internal Revenue Service adopted an alternative filing system, according to a report published by the General Accounting Office. Tax Administration: Alternative Filing Systems, published in October, examined the ramifications if the IRS prepared and mailed tax returns to taxpayers based on income reported by employers on form W-2 and the 1099 series information returns.

Not the best system for everyone

Under this alternative filing system, the IRS would mail returns and refunds or bills to taxpayers, who would then review the returns for accuracy and notify the IRS if they questioned the results. The GAO estimated that taxpayers could save up to 155 million hours on tax return preparation and the IRS could cut processing and compliance costs by as much as $37 million annually. However, professional tax preparers, financial institutions and employers could lose under this system. For example, the report said that preparers could 1ose millions of dollars in fees, and employers and financial institutions would be obligated to file information returns more quickly or electronically.

High hurdles remain

The IRS currently needs a long time to process information returns, so it is not likely that, under a tax reconciliation system in which the IRS would have to do even more return processing, taxpayers would receive their federal returns by the congressionally mandated April 15 deadline. …

Search by... Author
Show... All Results Primary Sources Peer-reviewed

Oops!

An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.