Self-Employed FY Taxpayers Can Receive an Advantage Compared to Self-Employed Calendar Year Taxpayers at the Social Security Trust Funds' Expense

HRD-83-45: Published: Jun 30, 1983. Publicly Released: Jun 30, 1983.

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GAO reported on an inequity between the tax treatment of self-employed taxpayers reporting on a fiscal-year basis and those reporting on a calendar-year basis.

GAO found that, although the number of fiscal-year taxpayers is relatively small, they enjoy a slight financial advantage over calendar-year taxpayers. This advantage translates into about $7.7 million over the working and retirement lifetime of the fiscal-year taxpayers. GAO noted that, by amending the Social Security Act, the advantage could be eliminated. However, GAO concluded that, given the small number of taxpayers involved and the possible additional administrative burden placed on the Government, the inequity is too insignificant to require remedial action.

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