Income taxes (41 - 50 of 239 items)
Tax Gap: Limiting Sole Proprietor Loss Deductions Could Improve Compliance but Would Also Limit Some Legitimate Losses
GAO-09-815: Published: Sep 10, 2009. Publicly Released: Oct 13, 2009.
Sole proprietors, who own unincorporated businesses by themselves, underreported their net income by 57 percent or $68 billion for 2001, according to the Internal Revenue Service's (IRS) most recent estimate. The underreporting includes both understated receipts and overstated expenses and may result in losses that can be deducted against income from other sources, such as wages. GAO was asked to...
Home Mortgage Interest Deduction: Despite Challenges Presented by Complex Tax Rules, IRS Could Enhance Enforcement and Guidance
GAO-09-769: Published: Jul 29, 2009. Publicly Released: Aug 31, 2009.
The home mortgage interest deduction is the third most expensive federal income tax expenditure, with the government expected to forgo about $80 billion of revenue for the deduction in 2009.1 Subject to various limitations, taxpayers may deduct interest on home-secured loans, such as mortgages, mortgage refinancings, and home equity loans, including those taken as lump sum amounts and home equity...
Tax Compliance: Opportunities Exist to Improve Tax Compliance of Applicants for State Business Licenses
GAO-09-569: Published: Jun 15, 2009. Publicly Released: Jul 16, 2009.
The California Department of Industrial Relations, Division of Labor Standards Enforcement (DLSE), requires applicants for California business licenses in three industries--farm labor contracting, garment manufacturing, and car washing and polishing--to be in compliance with federal employment tax obligations to qualify. Based on questions about whether the Internal Revenue Service (IRS) is fully...
Tax Administration: IRS Should Evaluate Penalties and Develop a Plan to Focus Its Efforts
GAO-09-567: Published: Jun 5, 2009. Publicly Released: Jul 6, 2009.
Civil tax penalties are an important tool for encouraging compliance with tax laws. It is important that the Internal Revenue Service (IRS) administers penalties properly and determines the effectiveness of penalties in encouraging compliance. In response to a congressional request, GAO determined (1) whether IRS is evaluating penalties in a manner that supports sound penalty administration and vo...
Tax Gap: Requiring Information Reporting for Charitable Cash Contributions May Not Be an Effective Way to Improve Compliance
GAO-09-555: Published: May 14, 2009. Publicly Released: Jun 15, 2009.
Individual taxpayers who misreport charitable cash contributions they deduct on their tax returns contribute to the tax gap, the difference between tax amounts taxpayers report and pay voluntarily and on time and the amounts they should pay under the law. The Internal Revenue Service (IRS) most recently estimated a gross tax gap of $345 billion for tax year 2001. One approach that tends to result...
Real Estate Tax Deduction: Taxpayers Face Challenges in Determining What Qualifies; Better Information Could Improve Compliance
GAO-09-521: Published: May 13, 2009. Publicly Released: Jun 12, 2009.
The Joint Committee on Taxation identified improved taxpayer compliance with the real-estate tax deduction as a way to reduce the federal tax gap--the difference between taxes owed and taxes voluntarily and timely paid. Regarding the deduction, GAO was asked to examine (1) factors that contribute to taxpayers including nondeductible charges, (2) the extent that taxpayers may be claiming such charg...
Tax Administration: Interim Results of IRS's 2009 Filing Season
GAO-09-640: Published: Jun 3, 2009. Publicly Released: Jun 4, 2009.
Every tax filing season, the Internal Revenue Service (IRS) must quickly and accurately process Americans' tax returns, issue refunds, and answer taxpayers' questions. The 2009 filing season, when 2008 tax returns are filed, was especially challenging because of stimulus-related tax law changes and IRS's expanded assistance to financially distressed taxpayers, such as adding flexibility for taxpay...
Tax Administration: Possible Implications of Expanding Refund Offset Provisions
GAO-09-571R: Published: May 7, 2009. Publicly Released: May 7, 2009.
Millions of federal taxpayers receive billions of dollars in income tax refunds every year. Many of these refunds are paid to taxpayers who owe money to the federal government or to their state or local government. The law allows certain types of debts to be collected through offsets of federal income tax refunds before payments are issued to taxpayers--in calendar year 2008, over $5 billion was d...
Tax Administration: Many Taxpayers Rely on Tax Software and IRS Needs to Assess Associated Risks
GAO-09-297: Published: Feb 25, 2009. Publicly Released: Apr 2, 2009.
Individual taxpayers used commercial tax software to prepare over 39 million tax returns in 2007, making it critical to the tax administration system. The majority were then filed electronically, resulting in fewer errors and reduced processing costs compared to paper returns. GAO was asked to assess what is known about how pricing of tax software influences electronic filing, the extent to which...
Tax Compliance: Offshore Financial Activity Creates Enforcement Issues for IRS
GAO-09-478T: Published: Mar 17, 2009. Publicly Released: Mar 17, 2009.
Much offshore financial activity by individual U.S. taxpayers is not illegal, but numerous schemes have been devised to hide the true ownership of funds held offshore and income moving between the United States and offshore jurisdictions. In recent years, GAO has reported on several aspects of offshore financial activity and the tax compliance and tax administration challenges such activity raises...