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Washington (August 21, 2002) -- Senator Kit Bond has urged the Internal Revenue Service to modify Form 1040 to streamline matching of tax returns filed by partners and S-corporation shareholders with Schedule K-1s filed by the businesses they own.Bond says the change would help identify taxpayers who are under reporting income.
"The findings of the Inspector General's latest report only strengthen the case for modifying and improving the 1040 to reduce errors in the agency's matching process," said Bond, a member of the Senate Committee on Small Business and Entrepreneurship. "Although I applaud the agency's effort to crack down on taxpayers failing to pay their fair share, the success of this effort is called into question if it results in forcing more honest taxpayers to prove they filed accurate returns in the first place."
"Modifying the individual tax return to improve computer processing just makes sense," Bond said. "The last thing small business owners need is to spin their wheels proving their returns are accurate simply because the IRS and its computers do not have the data to explain a mismatch. That is a heavy burden that amounts to an unnecessary, virtual audit."
The IRS began the matching initiative to identify taxpayers who may be skirting the law by under reporting income. While the agency has announced that the matching of 2000 tax returns has concluded, the IRS is expected to begin matching 2001 tax returns to Schedule K-1s sometime next year.
-- Electronic Accountant Newswire staff
