TaxProf Blog

Editor: Paul L. Caron
Pepperdine University School of Law

A Member of the Law Professor Blogs Network

Saturday, March 17, 2012

GAO: IRS Continues to Put Taxpayer Information at Risk; 89 of 105 Internal Control Weaknesses Remain

GAO LogoThe Government Accountability Office yesterday released IRS Needs to Further Enhance Internal Control Over Financial Reporting and Taxpayer Data (GAO-12-393):

IRS implemented numerous controls and procedures intended to protect key financial and tax-processing systems; nevertheless, control weaknesses in these systems continue to jeopardize the confidentiality, integrity, and availability of the financial and sensitive taxpayer information processed by IRS’s systems. Specifically, the agency continues to face challenges in controlling access to its information resources. For example, it had not always (1) implemented controls for identifying and authenticating users, such as requiring users to set new passwords after a prescribed period of time; (2) appropriately restricted access to certain servers; (3) ensured that sensitive data were encrypted when transmitted; (4) audited and monitored systems to ensure that unauthorized activities would be detected; or (5) ensured management validation of access to restricted areas. In addition, unpatched and outdated software exposed IRS to known vulnerabilities, and the agency had not enforced backup procedures for a key system.

An underlying reason for these weaknesses is that IRS has not fully implemented a comprehensive information security program. IRS has established a comprehensive framework for such a program, and has made strides to address control deficiencies—such as establishing working groups to identify and remediate specific at-risk control areas; however, it has not fully implemented all key components of its program. For example, IRS’s security testing and monitoring continued to not detect many of the vulnerabilities GAO identified during this audit. IRS also did not promptly correct known vulnerabilities. For example, the agency indicated that 76 of the 105 previously reported weaknesses open at the end of GAO’s prior year audit had not yet been corrected. In addition, IRS did not always validate that its actions to resolve known weaknesses were effectively implemented. Although IRS had a process in place for verifying whether each weakness had been corrected, this process was not always working as intended. Of the 29 weaknesses IRS indicated were corrected, GAO determined that 13 (about 45 percent) had not yet been fully addressed.

Considered collectively, these deficiencies, both new and unresolved from previous GAO audits, along with a lack of fully effective compensating and mitigating controls, impair IRS's ability to ensure that its financial and taxpayer information is secure from internal threats. This reduces IRS's assurance that its financial statements and other financial information are fairly presented or reliable and that sensitive IRS and taxpayer information is being sufficiently safeguarded from unauthorized disclosure or modification. These deficiencies are the basis of GAO’s determination that IRS had a material weakness in internal control over financial reporting related to information security in fiscal year 2011.

Update:

March 17, 2012 in Gov't Reports, Tax | Permalink | Comments (0) | TrackBack (0)

Monday, February 27, 2012

CBO: Choices for Federal Spending and Taxes

Douglas W. Elmendorf CBO(Director, Congressional Budget Office), Choices for Federal Spending and Taxes (Presentation at Harvard University) (Feb. 24, 2012):

By the end of the coming decade, unless we cut federal spending apart from Social Security and the major health care programs below the unusually low share of GDP it is already projected to reach, stabilizing federal debt relative to GDP will require us to cut spending on Social Security and federal health care programs by about one-quarter, raise taxes by about one-sixth, or do some combination of those approaches. That’s the fundamental choice we face.

February 27, 2012 in Gov't Reports, Tax | Permalink | Comments (0) | TrackBack (1)

Friday, February 24, 2012

GAO Seeks to Hire Director of Tax Policy and Administration

GAO LogoThe Government Accountability Office seeks to hire a new Director of Tax Policy and Administration:

This individual will be responsible for leading GAO reviews of tax policy and tax administration, specifically analyzing whether specific provisions of the tax code are achieving their purpose and whether those involved in tax administration are efficiently meeting their responsibilities. To qualify, you must have:

  • A broad knowledge of federal tax policy and tax administration, including tax legislation and IRS processes/operations
  • The ability to leverage knowledge of tax policy and administration to produce reports and testimonies that assist Congress in its decision-making
  • M.S. Taxation and/or Ph.D. in Economics/Public Finance is preferred
Compensation: To $174,000 + bonus eligibility (Senior Executive Service)
Deadline: To be considered, application packages (resume/CV and responses to the PTQs and ECQs) must be received by midnight, March 15, 2012.

February 24, 2012 in Gov't Reports, Tax | Permalink | Comments (0) | TrackBack (0)

Tuesday, January 31, 2012

CBO: Tax Revenues to 'Shoot Up' 30% by 2014

Congressional Budget Office, The Budget and Economic Outlook: Fiscal Years 2012 to 2022:

[U]nder current law, revenues will rise considerably as a share of GDP—from 16.3% in 2012 to 20.0% in 2014 and 21.0% in 2022. In particular, between 2012 and 2014, revenues in CBO’s baseline shoot up by more than 30%, mostly because of the recent or scheduled expirations of tax provisions, such as those that lower income tax rates and limit the reach of the AMT, and the imposition of new taxes, fees, and penalties that are scheduled to go into effect. Revenues continue to rise relative to GDP after 2014 largely because increases in taxpayers’ real (inflation-adjusted) income are projected to push more of them into higher tax brackets and because more taxpayers become subject to the AMT.

CBO

January 31, 2012 in Congressional News, Gov't Reports, Tax | Permalink | Comments (2) | TrackBack (1)

Tuesday, January 17, 2012

GAO: IRS Needs to Enhance Taxpayer Self-Service Tools

GAO LogoThe Government Accountability Office yesterday released Processing Gains, but Taxpayer Assistance Could Be Enhanced by More Self-Service Tools (GAO-12-176):

GAO recommends that IRS develop a new refund timeliness performance measure to better reflect current capabilities, create an automated telephone line for taxpayers seeking information about amended returns unless IRS has a convincing costbenefit analysis suggesting the costs exceed the benefits, assess the costs and benefits of automating a TAC/VITA locator line, and finalize a strategy for determining which self-service tools to provide on its website.

January 17, 2012 in Gov't Reports, Tax | Permalink | Comments (0) | TrackBack (0)

Joint Tax Committee Releases Tax Expenditure Estimates for 2011-15

The Joint Committee on Taxation today released Estimates of Federal Tax Expenditures for Fiscal Years 2011-2015 (JCS-1-12):

Tax expenditure analysis can help both policymakers and the public to understand the actual size of government, the uses to which government resources are put, and the tax and economic policy consequences that follow from the implicit or explicit choices made in fashioning legislation. This report on tax expenditures for fiscal years 2011-2015 is prepared by the staff of the Joint Committee on Taxation. ...As in the case of earlier reports, the estimates of tax expenditures in this report were prepared in consultation with the staff of the Office of Tax Analysis in the Department of the Treasury.

The Joint Committee staff has made its estimates (as shown in Table 1) based on the provisions in Federal tax law as enacted through January 10, 2011. Expired or repealed provisions are not listed unless they have continuing revenue effects that are associated with ongoing taxpayer activity. Proposed extensions or modifications of expiring provisions are not included until they have been enacted into law. The tax expenditure calculations in this report are based on the January 2011 Congressional Budget Office revenue baseline and Joint Committee staff projections of the gross income, deductions, and expenditures of individuals and corporations for calendar years 2010-2015.

Part I of this report contains a discussion of the concept of tax expenditures. Part II is a discussion of the measurement of tax expenditures. Estimates of tax expenditures for fiscal years 20112015 are presented in Table 1 in Part III. Table 2 shows the distribution of tax returns by income class, and Table 3 presents distributions of selected individual tax expenditures by income class.

January 17, 2012 in Gov't Reports, IRS News, Tax | Permalink | Comments (0) | TrackBack (0)

Friday, January 13, 2012

GAO: Guide to Disclosure of Confidential Taxpayer Information

GAO LogoThe Government Accountability Office today released A Guide for Screening and Assessing Proposals to Disclose Confidential Tax Information to Specific Parties for Specific Purposes (GAO-12-231SP):

The IRS receives a great deal of personal information about individuals and businesses. While taxpayers are required to provide this information to IRS under penalty of fine or imprisonment, confidentiality of information reported to IRS is widely held to be a critical element of taxpayers’ willingness to provide information to IRS and comply with the tax laws. As a general rule, anything reported to IRS is held in strict confidence—Internal Revenue Code Section 6103 provides that federal tax information is confidential and to be used to administer federal tax laws except as otherwise specifically authorized by law.

Although tax information is confidential, nondisclosure of such information is not absolute. Section 6103 contains some statutory exceptions, including instances where Congress determined that the value of using tax information for nontax purposes outweighs the general policy of confidentiality. Since making amendments to Section 6103 in 1976, Congress has expanded the statutory exceptions under which specified taxpayer information can be disclosed to specific parties for specific purposes. Today, Section 6103 exceptions enable law enforcement agencies to use relevant tax information to investigate and prosecute tax and nontax crimes and allow federal and state agencies to use it to verify eligibility for need-based programs and collect child support, among other uses.

Periodically, new exceptions to the general confidentiality rule are proposed, and some in the tax community have expressed concern that allowing more disclosures would significantly erode privacy and could compromise taxpayer compliance. In evaluating such proposals, it is important that Congress consider both the benefits expected from a disclosure of federal tax information and the expected costs, including reduced taxpayer privacy, risk of inappropriate disclosure, and negative effects on tax compliance and tax-system administration. This guide is intended to facilitate consistent assessment of proposals to grant or modify Section 6103 exceptions. This guide consists of key questions that can help in (1) screening a proposal for basic facts and (2) identifying policy factors to consider.

January 13, 2012 in Gov't Reports, Tax | Permalink | Comments (0) | TrackBack (0)

Wednesday, October 26, 2011

CBO: Trends in the Distribution of Household Income, 1979-2007

Congressional Budget Office, Trends in the Distribution of Household Income Between 1979 and 2007 (Oct. 2011):

After-tax income for the highest-income households grew more than it did for any other group. (After-tax income is income after federal taxes have been deducted and government transfers—which are payments to people through such programs as Social Security and Unemployment Insurance—have been added.) CBO finds that, between 1979 and 2007, income grew by:

  • 275% for the top 1% of households
  • 65% for the next 19%
  • 40% for the next 60%
  • 18% for the bottom 20%
Chart 1

October 26, 2011 in Gov't Reports, Tax | Permalink | Comments (5) | TrackBack (0)

Friday, October 21, 2011

GAO Report on Taxation of Financial Derivatives

GAO Logo The Government Accountability Office yesterday released Financial Derivatives: Disparate Tax Treatment and Information Gaps Create Uncertainty and Potential Abuse (GAO-11-750):

Recently, concerns have arisen about the use of certain financial derivatives to avoid or evade tax obligations. As requested, this report (1) identifies and evaluates how financial derivatives can be used to avoid or evade tax liability or achieve differing tax results in economically similar situations, (2) evaluates IRS actions to address the tax effects of investments in financial derivatives through guidance, and (3) evaluates IRS actions to identify financial derivative products and trends through information from other agencies. GAO reviewed research and IRS documents and interviewed IRS and Treasury officials and other experts. GAO analyzed the completion of financial derivative projects on the agencies’ Priority Guidance Plans (PGP) from 1996 to 2010.

GAO recommends that (1) Treasury determine whether alternatives to the current approach to taxing financial derivatives would promote consistent treatment of economically similar positions and be beneficial, that (2) Treasury and IRS provide more public information on the status of PGP projects, including those related to financial derivatives, and that (3) IRS strengthen information-sharing partnerships with relevant agencies.

October 21, 2011 in Gov't Reports, Tax | Permalink | Comments (0) | TrackBack (0)

Wednesday, June 29, 2011

National Taxpayer Advocate Releases Report to Congress

Taxpayer Advocate National Taxpayer Advocate Nina E. Olson today released (IR-2011-71) her mid-year report to Congress, Fiscal Year 2012 Objectives:

The report expresses particular concern about the impact of IRS budget cuts on taxpayer service and tax compliance and about IRS lien filing practices. ...

Impact of Possible Budget Cuts on Taxpayer Service and Compliance.  ...  “In recent years, the IRS has been given more and more tasks, but it is not receiving the resources it needs to fulfill these tasks without cutting corners,” the report says.  “And when the IRS cuts corners, taxpayers can be harmed and revenue collection may suffer.” The National Taxpayer Advocate has previously suggested that the IRS generally be exempt from budget caps or reductions.  She has noted that the “tax gap” (i.e., the amount of tax due but not paid voluntarily and timely) is estimated to be about $345 billion a year.  ... On a budget of about $12.1 billion, the IRS collected $2.35 trillion in FY 2010, or about $194 in federal revenue for each dollar it spent. ...

IRS Collection Practices.  The National Taxpayer Advocate has expressed concern about IRS collection practices in prior reports and has, in particular, made recommendations to reduce the harm that unproductive liens can inflict on taxpayers.  This report praises several recent changes the IRS has announced, including making lien withdrawals available to taxpayers in a wider range of cases.  However, the report expresses continuing concern about the IRS’s practice of automatically filing tax liens based on a dollar threshold instead of basing lien-filing decisions on an analysis of the taxpayer’s financial situation.  The National Taxpayer Advocate believes that such an analysis “should balance the need to protect the government’s interests in the taxpayer’s assets with a corresponding concern for the financial harm the lien will create for that taxpayer.”

In cases where the IRS has determined a taxpayer is suffering an economic hardship or possesses no significant assets, the filing of a lien is unlikely to further tax collection but will further damage a taxpayer’s credit rating, thus harming the taxpayer, increasing the taxpayer’s cost of living, and reducing the chance the taxpayer will be able to obtain a job and pay off the tax debt. ...

Other Areas of Focus.  Additional areas on which the National Taxpayer Advocate intends to focus in the coming year include the following:

  • Taxpayer Impact of Possible Government Shutdown
  • Tax Reform and Tax Complexity
  • Earned Income Tax Credit (EITC) Improvements
  • Tax-Related Identity Theft
  • Innocent Spouse Relief

Media and blogosphere coverage:

June 29, 2011 in Gov't Reports, IRS News, Tax | Permalink | Comments (0) | TrackBack (0)

Tuesday, June 21, 2011

GAO Identifies 29 Deficiencies in IRS's Internal Controls

GAO Logo The Government Accountability Office yesterday released Management Report: Improvements Are Needed to Enhance the Internal Revenue Service's Internal Controls and Operating Effectiveness (GAO-11-494R):

During our audit of IRS's fiscal year 2010 financial statements, we identified [15] internal control issues for which we do not already have recommendations outstanding. ...These issues increase the risk that IRS may not prevent or promptly detect and correct (1) unauthorized or improper refunds, purchases, or promotions; (2) errors in the hours credited or amounts paid to staff; (3) loss or theft of cash receipts or taxpayer information; (4) security and control deficiencies at its SCCs and processing facilities; (5) data errors in its property records; and (6) improper disclosure of taxpayer and other sensitive data.. ... This report provides 29 recommendations to address the internal control issues we identified. These recommendations are intended to bring IRS into conformance with its own policies, the Standards for Internal Control in the Federal Government, or both.

June 21, 2011 in Gov't Reports, IRS News, Tax | Permalink | Comments (0) | TrackBack (0)

TIGTA: IRS Is Not Doing Enough to Ensure its Employees Are Paying Their Taxes

TIGTA The Treasury Inspector General for Tax Administration today released Employees Are Provided Sufficient Information on Their Tax Responsibilities, but Additional Actions Are Needed to Detect All Noncompliant Employees (2011-10-047):

The IRS redesigned and centralized the Employee Tax Compliance (ETC) Program in Calendar Year 1995 to ensure that employees are held to a high standard of compliance with the tax laws. The IRS has developed processes to educate employees on their tax responsibilities and detect employees who may not have timely filed or timely paid their taxes; however, not all potential employee misconduct concerning noncompliance with tax laws is being assessed, and additional analyses are needed to periodically reevaluate the direction of the Program.  ...

TIGTA independently reviewed IRS computer files over a 2-year period and identified 133 employees who were potentially noncompliant with their taxes and were not detected by the ETC computer application. ... TIGTA determined the IRS significantly reduced the focus of the ETC Program from its original mission and goals partially based on a study it conducted showing that IRS employees were more compliant compared to the general taxpaying public. While TIGTA understands the IRS’s decision to use resources as efficiently as possible, the IRS should document this change and conduct three additional analyses to periodically reevaluate the Program’s direction to ensure proper oversight of employees’ compliance with their tax obligations.

June 21, 2011 in Gov't Reports, IRS News, Tax | Permalink | Comments (0) | TrackBack (0)

Thursday, June 16, 2011

TIGTA: IRS Did Not Follow Law in 38% of Seizures of Taxpayer Property

TIGTA The Treasury Inspector General for Tax Administration yesterday released Fiscal Year 2011 Review of Compliance With Legal Guidelines When Conducting Seizures of Taxpayers’ Property (2011-30-049):

In conducting its statutory review, TIGTA reviewed a random sample of 50 of the 578 seizures conducted from July 1, 2009 through June 30, 2010, to determine whether the IRS is complying with all requirements and guidelines when conducting each seizure. In the majority of seizures, the IRS followed all guidelines, and TIGTA did not identify any instances in which the taxpayers were adversely affected. However, ... TIGTA identified 25 instances in which the IRS did not comply with a particular I.R.C. requirement, involving 19 of the 50 seizures reviewed.

June 16, 2011 in Gov't Reports, IRS News, Tax | Permalink | Comments (5) | TrackBack (0)

Wednesday, June 15, 2011

Joint Tax Committee: Description of Tax Portions of Obama's 2012 Budget

The Joint Committee on Taxation yesterday released Description of Revenue Provisions Contained in the President’s Fiscal Year 2012 Budget Proposal (JCS-3-11) (647 pages):

This document ... provides a description and analysis of the revenue provisions modifying the Internal Revenue Code of 1986 that are included in the President's fiscal year 2012 budget proposal, as submitted to the Congress on February 14, 2011. The document generally follows the order of the proposals as included in the Department of the Treasury’s explanation of the President’s budget proposals. For each provision, there is a description of present law and the proposal (including effective date), an analysis of policy issues related to the proposal, and a reference to relevant prior budget proposals or recent legislative action.

June 15, 2011 in Congressional News, Gov't Reports, Tax | Permalink | Comments (0) | TrackBack (0)

Thursday, June 9, 2011

IRS Allows Millions in Erroneous Car Deductions to Prisoners, Dead People, Kids

TIGTA The Treasury Inspector General for Tax Administration yesterday released Millions of Dollars in Questionable Qualified Motor Vehicle Deductions Are Being Allowed (2011-41-037):

The American Recovery and Reinvestment Act of 2009 (Recovery Act) provides individuals with a Qualified Motor Vehicle (QMV) deduction, which is an additional deduction for State sales tax and excise tax on the purchase of certain motor vehicles. The amount of the QMV deduction reduces an individual’s taxable income and taxes owed.  The QMV deduction is phased out for individuals with a modified AGI between $125,000 and $135,000 for single individuals and between $250,000 and $260,000 for married individuals filing a joint tax return.  Individuals with modified adjusted gross income equal to or above the phase-out amounts are not eligible for the QMV deduction.  Figure 1 shows the number of individuals claiming the QMV deduction by schedule type and the amounts allowed through November 12, 2010.

Figure 1: QMV Deductions for Tax Year 2009

Schedule

Tax Returns

Total QMV Deductions

Schedule A

2,268,421

$3,846,317,037

Schedule L

2,104,677

$3,383,703,052

Totals

4,373,098

$7,230,020,089

The IRS cannot verify whether individuals claiming a QMV deduction are entitled to the deduction at the time their tax returns are processed.  The reason is that individuals do not have to provide any third-party documentation to support that they actually purchased a qualified motor vehicle and, if a qualified vehicle was purchased, the amount paid in sales and excise taxes. Based on our review of a statistically valid sample of 150 individuals allowed a QMV deduction of less than the amount the IRS considers excessive, it appears that some individuals may have erroneously been allowed QMV deductions for vehicles that were not purchased.

In addition, the process to identify potentially erroneous QMV deductions is not effective.  The IRS failed to identify 4,257 individuals claiming what the IRS defines as an excessive QMV deduction during tax return processing so it could hold and prevent the possible issuance of erroneous tax refunds.  These individuals claimed a total of more than $151.1 million in QMV deductions.  TIGTA also identified 473 cases for which information that the IRS maintains identifies the individuals as ineligible to claim about $1.02 million in QMV deductions they were allowed.  These individuals were in prison, deceased, or underage.

June 9, 2011 in Gov't Reports, IRS News, Tax | Permalink | Comments (3) | TrackBack (0)

Tuesday, June 7, 2011

Open CRS Releases Tax Reports

Friday, June 3, 2011

Taxpayer ID Theft Has Increased 400% in 2 Years; IRS Apologizes to 3 Victims

The House Committee on Oversight & Government Reform yesterday held a hearing on IRS E-File and Identity Theft. Jim White (Director of Strategic Issues, Government Accountability Office) testified at the hearing, Status of IRS Initiatives to Help Victimized Taxpayers (GAO-11-721T):

My testimony today will cover (1) when IRS detects identity theft-based refund and employment fraud, (2) the steps IRS has taken to resolve, detect, and prevent innocent taxpayers’ identity theft-related problems, (3) constraints that hinder IRS’s ability to address these issues, and (4) the potential for more rigorous screening to prevent refund or employment fraud now and in the future. ...

The number of tax-related identity theft incidents (primarily refund or employment fraud attempts) identified by IRS has grown:

  • 51,702 incidents in 2008
  • 169,087 incidents in 2009
  • 248,357 incidents in 2010.

After three victims of identity theft at the hands of the IRS testified (Lori PetracoLavonda Thompson, and Sharon Hawa), IRS Commissioner Douglas Shulman apologized in his testimony.

June 3, 2011 in Congressional News, Gov't Reports, IRS News, Tax | Permalink | Comments (0) | TrackBack (0)

Thursday, June 2, 2011

House Holds Hearing Today on Business Tax Reform and Job Creation

House Logo The House Ways & Means Committee held a hearing this morning on How Business Tax Reform Can Encourage Job Creation:

The hearing will inquire about the potential benefits to companies and workers of lowering marginal tax rates on business income, and the trade-offs that such companies might be willing to make given current fiscal constraints. The hearing also will examine major elements of business and corporate taxation in anticipation of future efforts to evaluate policy options that might encourage job creation in the United States.

Here is the list of witnesses with links to their testimony:

In coinnection with the hearing, the Joint Committee on Taxation released Present Law and Background Relating to Selected Business Income Tax Provisions (JCX-34-11):

This document ... describes present Federal income tax rules applicable to businesses with respect to capital expenditures, capital cost recovery, other types of cost recovery, tax accounting methods, general business credits, the corporate alternative minimum tax, and differences between tax accounting and financial accounting for selected items of expense of businesses.

June 2, 2011 in Congressional News, Gov't Reports, Tax | Permalink | Comments (0) | TrackBack (0)

TIGTA Submits Semiannual Report to Congress

TIGTA The Treasury Inspector General for Tax Administration today submitted its Semiannual Report to Congress:

It gives me great pleasure to submit this Semiannual Report to Congress summarizing the accomplishments of the TIGTA for the reporting period of October 1, 2010 through March 31, 2011. This report highlights the most notable audits, investigations, and inspections and evaluations performed by TIGTA as we have continued to work diligently to provide oversight of the IRS and protect the integrity of the Federal system of tax administration.

During this reporting period, TIGTA’s combined audit and investigative efforts has recovered, protected, and identified monetary benefits totaling $2.08 billion. Our Office of Audit has completed 33 audits and the Office of Investigations has closed 1,823 investigations over the past six months. In this time of continuing economic challenge, all Americans are being asked to do more with less. American citizens and their Government must work smarter, harder, and better, with fewer resources and greater purpose. Against this backdrop, TIGTA must redouble its efforts to promote economy, efficiency, and integrity in the administration of the Internal Revenue laws. We have never felt the need for greater commitment to our oversight of the IRS, nor has it ever been more important to improve compliance and reduce the Tax Gap – the $345 billion difference between what taxpayers owe and what they pay timely. Underreporting of taxes constitutes over 70% of the Tax Gap.

June 2, 2011 in Gov't Reports, IRS News, Tax | Permalink | Comments (1) | TrackBack (0)

Friday, May 27, 2011

GAO Releases Two Tax Reports

Tuesday, May 24, 2011

GAO: Contractors Receiving $24b in Stimulus Funds Owe $750m in Back Taxes

GAO Logo In conjunction with today's  Senate Permanent Subcommittee on Investigations hearing on Stimulus Contractors Who Cheat on Their Taxes: What Happened?, the Government Accountability Office released Thousands of Recovery Act Contract and Grant Recipients Owe Hundreds of Millions in Federal Taxes (GAO-11-485):
At least 3,700 Recovery Act contract and grant recipients—including prime recipients, subrecipients, and vendors—are estimated to owe more than $750 million in known unpaid federal taxes as of September 30, 2009, and received over $24 billion in Recovery Act funds. This represented nearly 5% of the approximately 80,000 contractors and grant recipients in the data from www.Recovery.gov as of July 2010 that GAO reviewed.
(Hat Tip: Bob Kamman.)

May 24, 2011 in Gov't Reports, Tax | Permalink | Comments (0) | TrackBack (0)

Friday, May 13, 2011

CBO: Our 2001 Ten-Year Budget Projection Was Off by $11.8 Trillion

CBO The Congressional Budget Office yesterday released Changes in CBO’s Baseline Projections Since January 2001:

Each year, the CBO issues baseline projections of federal spending and revenues for the following 10 years. Those projections are not intended as a forecast of future outcomes; rather, they are estimates of spending and revenues under the laws that are in effect at that time and are designed to provide a benchmark against which to measure future policy changes.

In January 2001, CBO’s baseline projections showed a cumulative surplus of $5.6 trillion for the 2002-2011 period. The actual results have differed from those projections because of subsequent policy changes, economic developments that differed from CBO’s forecast, and other factors. As a result, the federal government actually ran deficits from 2002 through 2010 and will incur a deficit in 2011 as well. The cumulative deficit over the 10-year period will amount to $6.2 trillion, CBO estimates—a swing of $11.8 trillion from the January 2001 projections.

The table below summarizes the differences between CBO’s baseline projections in January 2001 and the actual or currently projected results for each of the years over the 2002-2011 period.

May 13, 2011 in Gov't Reports, Tax | Permalink | Comments (15) | TrackBack (0)

Thursday, May 5, 2011

Joint Tax Committee Releases IRS Disclosures of Tax Return Information, 2010

The Joint Committee on Taxation today released Disclosure Report for Public Inspection Pursuant to Internal Revenue Code Section 6103(p)(3)(C) for Calendar Year 2010 (JCX-26-11):

Section 6103(p)(3)(C) provides that the Secretary of the Treasury shall, within 90 days after the close of each calendar year, furnish to the Joint Committee on Taxation for disclosure to the public a report which provides, with respect to each Federal agency and certain other entities, the number of: (1) requests for disclosure of returns and return information (as such terms are defined in § 6103(b)); (2) instances in which returns and return information were disclosed pursuant to such requests or otherwise; and (3) taxpayers whose returns, or return information with respect to whom, were disclosed pursuant to such requests.In addition, the report must describe the general purposes for which such requests were made.

Pursuant to § 6103(p)(3)(C), the IRS prepared a disclosure report for public inspection covering calendar year 2010. This document sets forth the report of the IRS.

The report reveals that the IRS made 7.1 billion disclosures of tax return information to federal and state agencies. Here are the Top 5 recipients of taxpayer information:

  1. States: 4.2 billion disclosures
  2. Congressional Committees: 1.5 billion disclosures
  3. Bureau of Census: 1.3 billion disclosures
  4. Medicare Premium Subsidy Adjustment: 39.0 million disclosures
  5. Child Support Enforcement Agencies: 13.6 million disclosures

May 5, 2011 in Congressional News, Gov't Reports, IRS News, Tax | Permalink | Comments (12) | TrackBack (0)

Tuesday, April 19, 2011

GAO: Improper EITC Payments Rose 37.6% in 2010, to $16.9 Billion

GAO Logo The Government Accountability Office has released Recent Efforts to Address Improper Payments and Remaining Challenges (GAO-11-575T):

Federal agencies reported an estimated $125.4 billion in improper payments for fiscal year 2010. The $125.4 billion estimate of improper payments federal agencies reported in fiscal year 2010 was attributable to over 70 programs spread among 20 agencies. Federal agencies’ fiscal year 2010 estimated improper payment amount is an increase of $16.2 billion from federal agencies’ prior year reported estimate of $109.2 billion.

The report named the Earned Income Tax Credit as the federal government program with the fourth highest amount of overpayments in FY 2010 (after Medicare, Medicare, and Unemployment Insurance) -- $16.9 billion, a 37.6% increase over FY 2009. The report lists as the primary causes of the improper EITC payments:  "High turnover of eligible claimants, confusion among eligible claimants, complexity of the law, structure of the program, unscrupulous return preparers, and fraud."

April 19, 2011 in Gov't Reports, IRS News, Tax | Permalink | Comments (1) | TrackBack (0)

Monday, April 11, 2011

GAO: 224,000 Passport Recipients Failed to Pay $5.8 Billion in Taxes

GAO Logo The Government Accountability Office yesterday released Federal Tax Collection: Potential for Using Passport Issuance to Increase Collection of Unpaid Taxes  (GAO-11-272):

State issued passports to about 16 million individuals during fiscal year 2008; of these, over 224,000 individuals (over 1%) owed over $5.8 billion in unpaid federal taxes as of September 30, 2008. State is not authorized to restrict the issuance of passports to individuals because they owe federal taxes. In addition, federal law does not permit IRS to disclose taxpayer information, including unpaid federal taxes, to State officials unless the taxpayer consents. In contrast, federal law permits certain restrictions on the issuance of passports to individuals, such as individuals owing child support debts over $2,500. For 2008, the estimated amount of unpaid federal taxes is likely understated because it excludes individuals who have not filed tax returns or underreported income. In addition, according to State officials, State cannot compel a passport applicant to provide a Social Security Number (SSN). As a result, State’s records sometimes did not contain a valid SSN, which is necessary to match passport data to IRS data. Also, the number of passport holders and dollars owed only includes 1 year of passports that were issued, substantially understating the total tax debt for all passport holders.

April 11, 2011 in Congressional News, Gov't Reports, Tax | Permalink | Comments (2) | TrackBack (0)

Friday, April 1, 2011

GAO Releases Two Tax Reports

Thursday, March 24, 2011

CBO Evaluates VMT (Vehicle Miles Traveled) Tax

CBO The Hill, CBO: Taxing Mileage a 'Practical Option' for Revenue Enhancement:

The CBO this week released a report that said taxing people based on how many miles they drive is a possible option for raising new revenues and that these taxes could be used to offset the costs of highway maintenance at a time when federal funds are short.

The report discussed the proposal in great detail, including the development of technology that would allow total vehicle miles traveled (VMT) to be tracked, reported and taxed, as well as the pros and cons of mandating the installation of this technology in all vehicles.

March 24, 2011 in Congressional News, Gov't Reports, Tax | Permalink | Comments (3) | TrackBack (0)

Wednesday, March 16, 2011

GAO: IRS's Lack of Internal Controls Puts Confidential Taxpayer Info at Risk

GAO Logo The Government Accountability Office yesterday released IRS Needs to Enhance Internal Control over Financial Reporting and Taxpayer Data (GAO-11-308):

Although IRS made progress in correcting previously reported information security weaknesses, control weaknesses over key financial and tax processing systems continue to jeopardize the confidentiality, integrity, and availability of financial and sensitive taxpayer information. Specifically, IRS did not consistently implement controls that were intended to prevent, limit, and detect unauthorized access to its financial systems and information. For example, the agency did not sufficiently (1) restrict users’ access to databases to only the access needed to perform their jobs; (2) secure the system it uses to support and manage its computer access request, approval, and review processes; (3) update database software residing on servers that support its general ledger system; and (4) enable certain auditing features on databases supporting several key systems. In addition, 65 of 88—about 74%—of previously reported weaknesses remain unresolved or unmitigated.

March 16, 2011 in Gov't Reports, IRS News, Tax | Permalink | Comments (0) | TrackBack (0)

Friday, March 11, 2011

CBO Releases Tax Revenue Options

CBO The Congressional Budget Budget Office yesterday released Reducing the Deficit: Spending and Revenue Options:

The CBO regularly issues a compendium of budget options to help inform federal lawmakers about the implications of possible policy choices. This volume—one of several reports that CBO produces regularly for the House and Senate Committees on the Budget—presents more than 100 options for altering federal spending and revenues. Nearly all of the options would reduce federal budget deficits. The report begins with an introductory chapter that describes the current budgetary picture and the uses and limitations of this volume. Chapters 2 and 3 present options that would reduce mandatory and discretionary spending, respectively. Chapter 4 contains options that would increase revenues from various kinds of taxes and fees.

Individual Income Tax Rates

 

Option 1 Increase Individual Income Tax Rates

 

Option 2 Raise Tax Rates on Capital Gains

 

Individual Income Tax Base

Option 3 Use an Alternative Measure of Inflation to Index Some Parameters of the Tax Code

 

Option 4 Gradually Eliminate the Mortgage Interest Deduction

 

Option 5 Limit or Eliminate the Deduction for State and Local Taxes

 

Option 6 Curtail the Deduction for Charitable Giving

 

Option 7 Limit the Tax Benefit of Itemized Deductions to 15 Percent

 

Option 8 Include Employer-Paid Premiums for Income Replacement Insurance in Employees' Taxable Income

 

Option 9 Include Investment Income from Life Insurance and Annuities in Taxable Income

 

Option 10 Tax Carried Interest as Ordinary Income

 

Option 11 Tax Social Security and Railroad Retirement Benefits in the Same Way That Distributions from Defined-Benefit Pensions Are Taxed

 

Option 12 Reduce Limits on Contributions to Retirement Plans

 

Option 13 Replace the Tax Exclusion for Interest Income on State and Local Bonds with a Direct Subsidy for the Issuer

 

Individual Income Tax Credits

 

Option 14 Modify or Eliminate the Child Tax Credit

 

Option 15 Eliminate Certain Tax Preferences for Education Expenses

 

Social Security Payroll Tax

 

Option 16 Increase the Maximum Taxable Earnings for the Social Security Payroll Tax

 

Option 17 Expand Social Security Coverage to Include Newly Hired State and

Local Government Employees

 

Corporate Income Tax Rates

 

Option 18 Increase Corporate Income Tax Rates by 1 Percentage Point

 

Option 19 Set the Corporate Income Tax Rate at 35 Percent for All Corporations

 

Taxation of Income from Businesses and Other Entities

 

Option 20 Repeal the "LIFO" and "Lower of Cost or Market" Inventory Accounting Methods

 

Option 21 End the Expensing of Exploration and Development Costs for Extractive Industries

 

Option 22 Extend the Period for Depreciating the Cost of Certain Investments

 

Option 23 Repeal the Deduction for Domestic Production Activities

 

Taxation of Income from Worldwide Business Activity

 

Option 24 Eliminate the Source-Rules Exception for Exports

 

Option 25 Tax the Worldwide Income of U.S. Corporations As It Is Earned

 

Option 26 Exempt Active Foreign Dividends from U.S. Taxation and Change the Tax Treatment of Overhead Expenses

 

Consumption Taxes and Excise Taxes

 

Option 27 Impose a 5 Percent Value-Added Tax

 

Option 28 Increase Excise Taxes on Motor Fuels by 25 Cents

 

Option 29 Increase All Taxes on Alcoholic Beverages to $16 per Proof Gallon

 

Health Care Provisions

 

Option 30 Accelerate and Modify the Excise Tax on High-Cost Health Care Coverage

 

Option 31 Increase the Payroll Tax Rate for Medicare Hospital Insurance by 1 Percentage Point

 

Option 32 Repeal the Individual Health Insurance Mandate

 

Other Taxes and Fees

Option 33 Impose a Fee on Large Financial Institutions

 

Option 34 Reinstate the Superfund Taxes

 

Option 35 Impose a Price on Emissions of Greenhouse Gases

 

Options That Would Increase the Deficit

 

Option A-1 Permanently Extend the Individual Income Tax Provisions of the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010

 

Option A-2 Provide Relief from the Individual Alternative Minimum Tax

 

Option A-3 Modify Estate and Gift Taxes

.

March 11, 2011 in Gov't Reports, Tax | Permalink | Comments (6) | TrackBack (0)

Monday, March 7, 2011

GAO Releases Two Tax Reports

Thursday, February 10, 2011

TIGTA: The IRS Pays $12 Billion/Year in Phony EITC Claims -- A 25% Error Rate

TIGTA The Treasury Inspector General for Tax Administration yesterday released  Reduction Targets and Strategies Have Not Been Established to Reduce the Billions of Dollars in Improper Earned Income Tax Credit Payments Each Year (2011-40-023):

The GAO has listed the Earned Income Tax Credit (EITC) Program as having the second highest dollar amount of improper payments of all Federal programs. The IRS has made little improvement in reducing EITC improper payments since 2002 when it was first required to report estimates of these payments to Congress. The IRS continues to report that 23% - 28% of EITC payments are issued improperly each year. In Fiscal Year 2009, this equated to $11 billion to $13 billion in EITC improper payments.

February 10, 2011 in Gov't Reports, IRS News, Tax | Permalink | Comments (9) | TrackBack (0)

Thursday, February 3, 2011

TIGTA: 20% Error Rate in Tax Credits Claimed for Electric and Hybrid Cars

TIGTA The Treasury Inspector General for Tax Administration today released Individuals Received Millions of Dollars in Erroneous Plug-in Electric and Alternative Motor Vehicle Credits (2011-41-011):

Approximately $33 million in credits for plug-in electric and alternative-fueled vehicles credits were erroneously claimed by at least 12,920 taxpayers through July 24, 2010. ... That means about 20% of the $163.9 million in credits claimed by taxpayers from January 1, 2010 to July 24, 2010 for plug-in electric and alternative motor vehicle credits were claimed in error. In the course of its review, TIGTA also found that 1,719 of the 12,920 individuals also erroneously reduced the amount of Alternative Minimum Tax they owed by almost $5.3 million.

According to TIGTA’s review, approximately 29 prisoners also received $49,926 in vehicle credits even though they were in prison all of Calendar Year 2009. The erroneous claims TIGTA identified resulted from inadequate IRS processes to ensure information reported by individuals claiming the credits met qualifying requirements for vehicle year, placed in-service date, and make and model. TIGTA’s review of electronically filed tax returns identified individuals who erroneously claimed the same vehicle for multiple plug-in electric and alternative motor vehicle credits or claimed an excessive number of vehicles for personal use credits. TIGTA also determined that the IRS cannot track and account for plug-in electric and alternative motor vehicle credits claimed by individuals on paper-filed tax returns because it has not established processes to capture this information from those returns.

February 3, 2011 in Gov't Reports, IRS News, Tax | Permalink | Comments (5) | TrackBack (1)

Friday, January 21, 2011

Joint Tax Committee Releases List of Expiring Federal Tax Provisions, 2010-2020

The Joint Committee on Taxation today released List of Expiring Federal Tax Provisions 2010-2020 (JCX-2-11):

This document ... provides a listing of Federal tax provisions (other than those providing time-limited transition relief after the repeal of an underlying rule) that are currently scheduled to expire in 2010-2020 (with references to the applicable section of the Internal Revenue Code of 1986 or other applicable law). Expiring Federal tax provisions providing temporary disaster relief are separately listed in Part II of the document.

For purposes of compiling this list, the staff of the Joint Committee on Taxation considers a provision to be expiring if, at a statutorily specified date, the provision expires completely or reverts to the law in effect before the present-law version of the provision. Certain provisions terminate on dates that refer to a taxpayer’s taxable year and not a calendar year. For these provisions, the expiration dates listed in this document apply with respect to calendar year taxpayers. The expiration dates of such provisions may differ, however, with respect to fiscal year taxpayers or taxpayers with short taxable years.

January 21, 2011 in Congressional News, Gov't Reports, Tax | Permalink | Comments (0) | TrackBack (0)

Tuesday, December 28, 2010

GAO Cannot Render Opinion on Government's Financial Statements

GAO Logo The Government Accountability Office has released A Citizen's Guide to the 2010 Financial Report of the U.S. Government (268 pages):

For FY 2010, the Government Accountability Office (GAO) issued a disclaimer of audit opinion on the accrual-based Governmentwide financial statements for the fourteenth consecutive year.

Accounting Today, GAO Sees Problems in Government’s Financial Management:

The U.S. Government Accountability Office said it could not render an opinion on the 2010 consolidated financial statements of the federal government, because of widespread material internal control weaknesses, significant uncertainties, and other limitations. ...

The main obstacles to a GAO opinion were: (1) serious financial management problems at the Department of Defense that made its financial statements unauditable, (2) the federal government’s inability to adequately account for and reconcile intragovernmental activity and balances between federal agencies, and (3) the federal government’s ineffective process for preparing the consolidated financial statements.

In addition, the GAO said last week it was unable to render an opinion on the 2010 Statement of Social Insurance because of significant uncertainties, primarily related to the achievement of projected reductions in Medicare cost growth. ...

“Given the federal government’s fiscal challenges, it’s imperative that Congress, the administration, and federal managers have reliable, useful, and timely financial and performance information,” [Acting Comptroller General Gene] Dodaro said. “Improved accuracy and transparency in financial reporting are urgently needed.”

(Hat Tip: InstaPundit.)

December 28, 2010 in Gov't Reports, Tax | Permalink | Comments (1) | TrackBack (0)

Wednesday, December 22, 2010

Joint Tax Committee Releases Tax Expenditure Estimates for 2010-14

The Joint Committee on Taxation yesterday released Estimates of Federal Tax Expenditures for Fiscal Years 2010-2014 (JCS-3-10):

Part I of this report contains a discussion of the concept of tax expenditures. Part II is a discussion of the measurement of tax expenditures. Estimates of tax expenditures for fiscal years 20102014 are presented in Table 1 in Part III. Table 2 shows the distribution of tax returns by income class, and Table 3 presents distributions of selected individual tax expenditures by income class.

Update: From Richard Kaplan (Illinois):

The Joint Committee on Taxation’s Tax Expenditures Report does not consider any of the tax extensions and other changes enacted by the Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act, Pub. L. No. 111-312, as signed by President Obama on December 17. Because every tax expenditure provision is reduced to a number using applicable income tax rates, virtually every number for 2011 and 2012 (as well as the resulting five-year totals) is seriously overstated.

December 22, 2010 in Gov't Reports, Tax | Permalink | Comments (1) | TrackBack (0)

Wednesday, December 1, 2010

53% of Economists Work for the Government

According to the Bureau of Labor Statistics' Occupational Outlook Handbook 2010-2011, 53% of all U.S. economists work for the government (31% in the federal government and 22% in state and local government). (Hat Tip: New York Times Economix.)

December 1, 2010 in Gov't Reports, Legal Education, Tax | Permalink | Comments (1) | TrackBack (0)

Tuesday, November 30, 2010

CBO: Tax Cuts Were Least Effective Stimulus in Recovery Act

The Congressional Budget Office has released Estimated Impact of the American Recovery and Reinvestment Act on Employment and Economic Output From July 2010 Through September 2010 (Nov. 2010), which reports that the tax relief included in the Recovery Act had less of a stimulative impact than either government purchases or transfer payments to individuals and governments.

CBO_Page_1 
CBO_Page_2 

Center on Budget and Policy Priorities, New CBO Report Finds up to 3.6 Million People Owe Their Jobs to the Recovery Act:

Among ARRA’s most effective provisions for saving and creating jobs, according to CBO’s estimates, are direct purchases of goods and services by the federal government, transfer payments to states (such as extra Medicaid funding), and transfer payments to individuals (such as increased food stamp benefits and additional weeks of unemployment benefits). CBO’s estimates indicate that tax cuts are less effective job producers, and tax cuts for higher-income people and corporations have very low bang for the buck.

November 30, 2010 in Congressional News, Gov't Reports, Tax, Think Tank Reports | Permalink | Comments (7) | TrackBack (0)

TIGTA: IRS Fails to Properly Utilize Currency Report Data to Catch Tax Cheats

TIGTA The Treasury Inspector General for Tax Administration today released Currency Report Data Can Be a Good Source for Audit Leads (2010-30-104):

Individuals who fail to file required returns or underreport their income can create unfair burdens on honest taxpayers and diminish the public’s respect for the tax system. While currency reports may be commonly associated with money laundering, TIGTA identified a number of individuals who have enough cash to engage in currency transactions totaling at least $20,000, but did not file tax returns even though they appeared to have a filing requirement.

A number of other individuals engaged in similar currency transactions filed tax returns, but reported income that does not appear sufficient to cover their basic living expenses.

November 30, 2010 in Gov't Reports, IRS News, Tax | Permalink | Comments (0) | TrackBack (0)

Wednesday, November 24, 2010

IRS Increases Scrutiny of Taxpayers With Foreign Assets

TIGTA The Treasury Inspector General for Tax Administration today released New Legislation Could Affect Filers of the Report of Foreign Bank and Financial Accounts, but Potential Issues Are Being Addressed (2010-30-125):

[T]he number of FBAR-related examinations increased 96 percent (from 334 to 656) from Fiscal Year (FY) 2004 to FY 2009. In addition, the number of FBAR penalty assessments grew from $4.2 million to $20.5 million, an increase of 388 % over the same period, while FBAR penalty collections grew from $1.8 million to $9.8 million, an increase of 444%. The IRS, in collaboration with the Department of the Treasury’s Financial Crimes Enforcement Network, has also revised the FBAR form and instructions and conducted education and outreach efforts on the filing of FBARs.

November 24, 2010 in Gov't Reports, Tax | Permalink | Comments (0) | TrackBack (0)

Friday, November 19, 2010

GAO: Compliance Costs of ObamaCare's 1099 Reporting Requirement Are Low

Gao_6At yesterday's hearing of the Senate Committee on Small Business and Entrepreneurship on Assessing the Regulatory and Administrative Burdens on America’s Small Businesses, James R. White, Director of Tax Issues at the Government Accountability Office, testified on Small Businesses: Tax Compliance Benefits and Opportunities to Mitigate Costs on Third Parties of Miscellaneous Income Reporting Requirements (GAO-11-218T):

Information reporting is a powerful tool for encouraging voluntary compliance by payees and helping IRS detect underreported income. Also, information reporting may sometimes reduce taxpayers’ costs of preparing their tax returns, although by how much is not known. IRS estimated that $68 billion of the annual $345 billion gross tax gap for 2001, the most current available estimate, was caused by sole proprietors underreporting their net business income. A key reason for this noncompliance was that sole proprietors were not subject to tax withholding and only a portion of their net business income was reported to IRS by third parties. The benefits from information reporting are affected by payers’ compliance with reporting requirements and IRS’s ability to use the information in its process that matches third-party data with tax returns. ...

Chart 2 
This testimony summarizes recent GAO reports and provides information on (1) benefits of the current requirements in terms of improved compliance by taxpayers and reduced taxpayer recordkeeping, (2) costs to the third-party businesses of the current 1099-MISC reporting requirement, and (3) options for mitigating the reporting burden for third-party businesses. GAO has not assessed the expansion of 1099-MISC reporting to payments for goods.

Current 1099-MISC requirements impose costs on the third parties required to file them. The magnitude of these costs is not easily estimated because payers generally do not track these costs separate from other accounting costs. In nongeneralizable case studies conducted in 2007 with four payers and five vendors that file information returns on behalf of their clients, GAO was told that existing information return costs were relatively low. One small business employing under five people told GAO of possibly spending 3 to 5 hours per year filing Form 1099 information returns manually, using an accounting package to gather the information. Two vendors reported prices for preparing and filing Forms 1099 of about $10 per form for 5 forms to about $2 per form for 100 forms, with one charging about $0.80 per form for 100,000 forms.

At yesterday's hearing, Winslow Sargeant, Chief Counsel for Advocacy U.S. Small Business Administration, testified on the regulatory and administrative burdens on small businesses and endorsed the repeal of the ObamaCare's 1099 reporting obligation:

CHART

November 19, 2010 in Congressional News, Gov't Reports, Tax | Permalink | Comments (1) | TrackBack (0)

Tuesday, November 2, 2010

TIGTA: IRS Needs to Better Protect Federal Tax Liens in Mortgage Foreclosures

TIGTA The Treasury Inspector General for Tax Administration today released Coordination and Procedures for Foreclosures Can Be Improved (2010-30-119):

The IRS was inconsistent in how it processed foreclosure cases and coordinated with local United States Attorneys' Offices (USAO). ...

When a taxpayer fails to pay taxes owed, the IRS may attach a claim to a taxpayer's real property -- a claim known as a Federal Tax Lien. The IRS files a Notice of Federal Tax Lien (NFTL) in appropriate local government offices, notifying interested parties that a lien exists on the property. When property has a Federal Tax Lien attached, the IRS may collect proceeds from a foreclosure sale to cover the taxes owed.

A foreclosure is either judicial or non-judicial. The USAO is responsible for protecting the Federal Government's interest in judicial foreclosure sales, while the IRS is responsible for protecting the Federal Government's interest in non-judicial foreclosure sales. Although the IRS does not have the primary responsibility to protect the Federal Government's interest in judicial foreclosure proceedings, it must coordinate such proceedings with the USAO.

TIGTA reviewed whether the IRS effectively and efficiently protects the Federal Government's interest during foreclosure proceedings when an NFTL has been filed. TIGTA found that the IRS could improve its coordination with the USAO for judicial foreclosures. TIGTA also found that the information the IRS provided to the public for submitting a timely notice of sale for non-judicial foreclosures was inconsistent with the Internal Revenue Code.

November 2, 2010 in Gov't Reports, IRS News, Tax | Permalink | Comments (1) | TrackBack (0)

Saturday, October 30, 2010

CRS: Cost of Extending Bush Tax Cuts = $5 Trillion

CRS Logo BNA has made available a Congressional Research Service report, The Bush Tax Cuts and the Economy (R41393), by Thomas L. Hungerford. The report states that the total cost of extending all of the 2001 and 2003 Bush tax cuts would be $5.048 trillion over the next decade, when taking into account the cost of indexing the alternative minimum tax and the cost of debt service [click on chart to enlarge]CRS 

In September, the CRS had estimated the cost of extending the Bush tax cuts as $2.8 trillion over ten years.

October 30, 2010 in Congressional News, Gov't Reports, Tax | Permalink | Comments (3) | TrackBack (0)

Tuesday, October 26, 2010

GAO Releases Two Tax Reports

Tuesday, October 12, 2010

Open CRS Releases Tax Reports

Friday, October 1, 2010

GAO Releases Two Tax Gap Reports

Tuesday, September 28, 2010

Census Bureau Releases Income, Poverty Data

Census The U.S. Census Bureau today released the results of the 2009 American Community Survey. From the press release:

 Median Household Income

  • Real median household income in the United States fell between 2008 and 2009 — decreasing by 2.9 percent from $51,726 to $50,221.
  • Between 2008 and 2009, real median household income decreased in 34 states and increased in one: North Dakota.

 Poverty

  • Thirty-one states saw increases in both the number and percentage of people in poverty between 2008 and 2009.
  • No state had a statistically significant decline in either the number in poverty or the poverty rate.

Reports:

Press and blogosphere coverage:

September 28, 2010 in Gov't Reports, Tax | Permalink | Comments (0) | TrackBack (0)

Friday, August 27, 2010

President's Economic Recovery Advisory Board to Discuss Tax Options at Today's Meeting

White House The President’s Economic Recovery Advisory Board (PERAB) meets today at 2:00 p.m. EST via conference call (live webcast available here).  From the agenda:

The discussion will include Board review of a report by the Tax Reform subcommittee. The report discusses a spectrum of reform ideas relating to tax simplification, enforcement of existing tax laws, and reform of the corporate tax system, without considering policies that would raise taxes on families making less than $250,000. The PERAB is not tasked with providing its own policy recommendations for the Administration and the final report will be an almanac of options from a broad range of viewpoints. The PERAB will vote on presenting the report as formal advice to the President.

August 27, 2010 in Gov't Reports, News, Tax | Permalink | Comments (1) | TrackBack (0)

Wednesday, August 25, 2010

TIGTA: IRS Fails to Properly Monitor 25% of Section 527 Political Organizations

TIGTA The Treasury Inspector General for Tax Administration today released Improvements Have Been Made, but Additional Actions Could Ensure That Section 527 Political Organizations More Fully Disclose Financial Information (2010-10-018):

This report presents the result of our review of the filing compliance of Section 527 political organizations. ... The IRS has taken significant actions to improve its ability to identify political organizations that do not timely notify the IRS of their existence or timely submit reports of their contributions and expenditures. However, the IRS has not fully addressed noncompliance among political organizations. For example, one out of every four Political Organization Report of Contributions and Expenditures (Form 8872) that we reviewed had incomplete or missing contributor or recipient information. While some of these filings may later be deemed acceptable, we determined the IRS is not reviewing these filings to determine if they are complete or if penalties should be assessed. Also, the IRS is not always issuing notices at the appropriate time that include all information needed by political organizations to become compliant. Lastly, the IRS is not following up on information it has requested from political organizations to verify compliance. ...

Although the EO function has taken action to identify noncompliant political organizations, we believe EO function management should focus on addressing noncompliance through increased enforcement actions. The assessment of taxes and penalties for incomplete filings, when appropriate, could lead to increased accountability and disclosure by political organizations. Improvement in the notice process could also assist political organizations in complying with their responsibilities.

August 25, 2010 in Gov't Reports, IRS News, Tax | Permalink | Comments (0) | TrackBack (0)

Monday, August 23, 2010

TIGTA: IRS Lacks Adequate Internal Controls in Spending $203m in Stimulus Funds

TIGTA The Treasury Inspector General for Tax Administration today released Concerns About Contracting Officer’s Technical Representatives That Are Relevant to the American Recovery and Reinvestment Act of 2009 Procurements (2010-11-087):

Procurements that are both awarded and planned by the IRS as part of the American Recovery and Reinvestment Act of 2009 may be at risk due to inadequate oversight. ... The IRS received $203 million as part of the Recovery Act to reprogram its computer systems and to update tax forms, publications and customer services. As of April 2010, the IRS had initiated or was in the process of initiating 26 procurement actions on Recovery Act program initiatives with a total contract value of $81.9 million. Despite the influx of Recovery Act money, the IRS has not completed steps to improve contract oversight by its Contracting Officers' Technical Representatives, who administer the technical aspects of government contracts following their award. 

August 23, 2010 in Gov't Reports, IRS News, Tax | Permalink | Comments (0) | TrackBack (0)

Tuesday, August 17, 2010

Joint Tax Committee Releases Description of Tax Provisions in Obama's FY 2011 Budget

The Joint Committee on Taxation yesterday released Description of Revenue Provisions Contained in the President’s Fiscal Year 2011 Budget Proposal (JCS-2-10) (521 pages):

This document ... provides a description and analysis of the tax provisions that are included in the President’s fiscal year 2011 budget proposal, as submitted to the Congress on February 1, 2010. The document generally follows the order in which the provisions are set forth in the table providing estimates of the revenue effects of the revenue proposals contained in the President’s budget proposals. For each provision, there is a description of present law and the proposal (including effective date), a reference to relevant prior budget proposals or recent legislative action, and an analysis of policy issues related to the proposal.

August 17, 2010 in Gov't Reports, IRS News, Tax | Permalink | Comments (0) | TrackBack (0)