Tax Administration:
Information Returns Should Increase Proper Reporting of Farm Income
GGD-86-69: Published: Jul 22, 1986. Publicly Released: Jul 22, 1986.
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Pursuant to a congressional request, GAO studied the need to improve taxpayer compliance in reporting taxable commodity credit loan and crop insurance income, specifically ways in which the Internal Revenue Service (IRS) could better detect unreported income.
GAO found that, in 1982: (1) 7 percent of crop loan and insurance income recipients failed to file federal income tax returns; (2) 77 percent of the taxpayers whose returns GAO reviewed failed to properly report their income; (3) computer matching of information returns with tax returns should help IRS to determine whether income was properly reported and the applicable taxes were assessed; and (4) IRS should improve its forms, filing instructions, and computer programs.
Recommendations for Executive Action
Status: Closed - Implemented
Comments: IRS clarified the forms and instructions for commodity credit loan and crop insurance information returns. IRS clarified tax year 1986 instructions by instructing taxpayers to report crop insurance payments in box 7 of Form 1099MISC. For tax year 1987, IRS revised Schedule F and Form 4835 to include boxes to check indicating optional year reporting elections.
Recommendation: The Commissioner of Internal Revenue should clarify instructions and forms concerning commodity credit loan and crop insurance income so that taxpayers and IRS can more efficiently and effectively use information returns.
Agency Affected: Department of the Treasury: Internal Revenue Service
Status: Closed - Not Implemented
Comments: IRS plans to rely on its examination approach by which it will match information returns to income reported on tax returns only when taxpayers are selected for audit. This will satisfy, in part, the intent of this recommendation, but, since IRS plans to do no more, GAO might was well close this recommendation.
Recommendation: The Commissioner of Internal Revenue should incorporate commodity credit loan and crop insurance income into the IRS document matching program.
Agency Affected: Department of the Treasury: Internal Revenue Service
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Explore the full database of GAO's Open Recommendations
Jan 14, 2021
Tax Administration:
Better Coordination Could Improve IRS's Use of Third-Party Information Reporting to Help Reduce the Tax GapGAO-21-102: Published: Dec 15, 2020. Publicly Released: Jan 14, 2021.
Nov 18, 2020
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IRS Reorganization:
Planning Addressed Key Reform Practices, but Goals and Measures for the Plan Have Not Been FinalizedGAO-21-18: Published: Oct 19, 2020. Publicly Released: Nov 18, 2020.
Nov 9, 2020
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Opportunity Zones:
Improved Oversight Needed to Evaluate Tax Expenditure PerformanceGAO-21-30: Published: Oct 8, 2020. Publicly Released: Nov 9, 2020.
Oct 19, 2020
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Tax Administration:
Opportunities Exist to Improve Oversight of Hospitals' Tax-Exempt StatusGAO-20-679: Published: Sep 17, 2020. Publicly Released: Oct 19, 2020.
Sep 23, 2020
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Taxpayer Service:
IRS Could Improve the Taxpayer Experience by Using Better Service Performance MeasuresGAO-20-656: Published: Sep 23, 2020. Publicly Released: Sep 23, 2020.
Aug 31, 2020
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Abusive Tax Schemes:
Offshore Insurance Products and Associated Compliance RisksGAO-20-589: Published: Jul 30, 2020. Publicly Released: Aug 31, 2020.
Jun 29, 2020
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Taxpayer Compliance:
More Income Reporting Needed for Taxpayers Working through Online PlatformsGAO-20-366: Published: May 28, 2020. Publicly Released: Jun 29, 2020.
Jun 16, 2020
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Tax Exempt Organizations:
IRS Increasingly Uses Data in Examination Selection, but Could Further Improve Selection ProcessesGAO-20-454: Published: Jun 16, 2020. Publicly Released: Jun 16, 2020.
May 1, 2020
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Management Report:
Improvements Are Needed to Enhance the Internal Revenue Service's Internal Control over Financial ReportingGAO-20-480R: Published: May 1, 2020. Publicly Released: May 1, 2020.
Apr 30, 2020
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Priority Open Recommendations:
Internal Revenue ServiceGAO-20-548PR: Published: Apr 23, 2020. Publicly Released: Apr 30, 2020.
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