Academic journal article Journal of Accountancy

Advocate Reports Taxpayer Concerns to Congress

Academic journal article Journal of Accountancy

Advocate Reports Taxpayer Concerns to Congress

Article excerpt

W. Val Oveson, CPA, has been very busy ferreting out tax policy and administrative problems that make compliance burdensome for taxpayers. In his annual report to Congress, Oveson, who has been National Taxpayer Advocate since 1998, identified the top seven issues that impede taxpayer compliance.

The earned income tax credit (EITC) led the list of issues. The EITC is a problem, particularly for the low-income taxpayers to which it is targeted, because it is difficult to calculate. Taxpayers trying to figure the credit must contend with a long list of eligibility tests, modifications to income and unique definitions.

"The earned income tax credit is one of the primary causes of advocate casework," Oveson said. "A great deal needs to be done to simplify it." In the report, he made the following recommendations to improve the way the EITC is administered:

* Simplify the definition of a qualifying child.

* Permit taxpayers who reside with another eligible adult to also claim the EITC.

* Eliminate the age requirement for the EITC.

* Make the EITC exempt from offsets for federal tax debt or other liabilities (for example, delinquent child support).

Six other areas identified as particular obstacles to taxpayer compliance, along with proposals to address each, follow:

* Business deductions: Correct inequitable treatment of business deductions for taxpayers whose expenses are not reimbursed by their employers and who do not itemize.

* Interest charged by the IRS: Broaden the interest abatement requirements and limit the assessment of interest on tax balances owed.

* Penalties: Eliminate the inequities in the assertions, abatements and computation of penalties. …

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