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Pursuant to a congressional request, GAO: (1) evaluated data that the Department of the Treasury used to assess the effect of section 127 of the Internal Revenue Code; and (2) assessed the availability and reliability of 11 data elements relating to section 127.

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Matter for Congressional Consideration

Matter Status Comments
Congress can decide to not reinstate the expired section 127 or to reinstate it permanently or temporarily. If the decision is to reinstate it, Congress may want to revise the reporting requirement to better assess the provision's effects. This could be done by requiring information on the salary level of participants and the average benefit at each salary level. To help make any further assessment of the section, Congress could also specify that the data be reported for a sufficient length of time to adequately measure any effects.
Closed - Implemented
Section 127 has been extended several times since GAO issued its report. In each case, nothing was done to revise the employer reporting requirement. It seems obvious that the recommendation has had no impact, and GAO sees no reason to keep it open any longer.

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