Tax Administration:

Benefits of a Corporate Document Matching Program Exceed the Costs

GGD-91-118: Published: Sep 27, 1991. Publicly Released: Oct 3, 1991.

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Jennie S. Stathis
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Pursuant to a congressional request, GAO analyzed issues on the feasibility of an Internal Revenue Service (IRS) document matching program for payments to corporations, focusing on: (1) what legislative actions Congress needs to take; and (2) how IRS can reduce the program's burden on the business community.

GAO believes that Congress: (1) and IRS could reduce the burden of a corporate matching system by phasing in the reporting requirement and document matching over several years and slowly expanding the program as both IRS and the business community learn from their initial experiences; and (2) needs to pass legislation that would authorize IRS to require payors to report payments to corporations, appropriate funds to cover additional IRS costs, and earmark such appropriations specifically for the corporate information returns and matching program.

Matter for Congressional Consideration

  1. Status: Closed - Not Implemented

    Comments: IRS is not pursuing this information reporting on payments to corporations for investment-type income, nor is Congress considering this recommendation any more.

    Matter: Congress should pass legislation that would require that payments to corporations be reported on information returns and to appropriate the necessary funds for IRS to implement a computer-matching program to identify noncompliance. The program could be phased in to reduce the burden on the business community.


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