Paul L. Caron

Friday, November 6, 2020

Why You May Be Able To File Your Taxes On A Napkin In 2021

Sam Wice, The Paperwork Reduction Act and Why You May Be Able to File Your Taxes on a Napkin in 2021, Yale J. on Reg.: Notice & Comment (2020):

Yale Notice & CommentGiven the Paperwork Reduction Act’s (PRA) importance, it often does not get much attention. If the Office of Information and Regulatory Affairs (OIRA) is the most important office you’ve never heard of, then the PRA may be the most important function of OIRA you’ve never heard of. In addition to creating OIRA, the PRA requires that agencies (including independent agencies) follow the PRA process for collections of information from at least ten people. The PRA generally serves to (1) report the burdens associated with collections of information and (2) create a process for minimizing the burdens associated with collections of information.

Despite this review process being an excellent avenue for the public to provide input on potential regulatory impacts, when agencies publish collections of information in the Federal Register, they rarely get comments. For instance, nobody commented on the most recent information collection request from the Internal Review Service (IRS) on its individual income-tax forms and only two people commented on the IRS’s business income-tax forms, even though the IRS estimated that the combined 582 tax forms in both requests would impact 171.3 million people/entities.

Through this post, I hope to give a short overview of the PRA review process and use the IRS’s income-tax forms as an illustrative example of the importance of the PRA process, including how it provides for the regular review of existing collections of information. Specifically, given the delay in the IRS initiating the PRA process for the 2021 income-tax season, the IRS will likely struggle to comply with the PRA’s requirements, which could allow taxpayers a much greater latitude in how they file their income-tax returns. ...

The PRA requires 90 days of comment on the 2021 income-tax forms, which the IRS has not yet begun. Even under the rosiest of timelines, this 90-day period would extend beyond the usual beginning of tax season. As such, tax payers at the beginning of this upcoming tax season may have many options on how to file their taxes in a reasonable manner. However, I will note that the title of this post is a joke, and the IRS or a reviewing court would likely not find a napkin to be a reasonable manner to provide information to the IRS.

Nevertheless, those interested in potentially improving tax forms through non-napkin alternatives and/or wishing to provide information to the IRS regarding its estimates of how long each income-tax form takes to complete, should comment during the PRA process. The PRA process is the official avenue for the combined 171.3 million people/entities impacted by income-tax forms to comment upon the forms and influence the IRS’s collection of information.

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