Pursuant to a congressional request, GAO reviewed the Internal Revenue Service's (IRS) use of actuarial tables, focusing on: (1) the fairness of those tables in computing taxable pension income; and (2) an alternative income computation method that takes into account occupations and other factors.
Recommendations for Executive Action
|Internal Revenue Service||1. The Commissioner of Internal Revenue should revise IRS Publication 575 to clarify when retirees can use the simplified general rule to their advantage. If retirees do know their contributions made before and after July 1986, they should be instructed that the use of the simplified general rule may or may not be to their advantage. The publication should also instruct retirees, whose employers cannot separate the contributions they made, to use the simplified general rule because it is always to their advantage to do so.|