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GGD-80-61 1 (1980-05-08)

handle is hein.gao/gaobabaqd0001 and id is 1 raw text is: - Mot t,, bert~ noutside the4e ir A4Witing Office except 6, t,. Basis of Scific aproyaj [ 'I !fijcO of Congressiona Relations. COMPTROLLER GENERAL OF THE UNITED STATES 5; WASHINGTON, nC_ 20548 B-196969 MAY 8,1980 The Honorable Russell B. Long 1 Chairman, Joint Committee on F Taxation Congress of the United States Dear Mr. Chairman: Subject: /Legislative Change Needed To Eliminate the e qirement for a Declaration of Estimated Tax (GGD-80-61) By letter dated December 24, 1976, your Committee asked us to identify ways to simplify the individual income tax. This report, one in a series in response to that request, deals with the estimated tax requirements for individual taxpayers. The report discusses the need for a legislative change to reduce cost and paperwork burden both for taxpayers and the Internal Revenue Service (IRS). Section 6015 of the Code requires taxpayers to make a declaration of estimated tax if they meet certain eligibility requirements. IRS has developed a declaration-voucher (Form 1040-ES) for taxpayers to use in complying with this requirement. When IRS receives an estimated tax payment, it uses the information on the declaration-voucher to credit the taxpayer's account. If a taxpayer elects to use an over- payment of tax for the preceding year as a credit against cur- rent year tax pursuant to section 6513(d) of the Code, and if the amount of the credit equals or exceeds the estimated tax payment(s), the taxpayer must still file a declaration of estimated tax but does not have to enclose a remittance. Once a taxpayer makes a declaration of estimated tax by filing the first declaration-voucher, subsequent vouchers need be filed only when making installment payments of the tax. This apparently is confusing to many taxpayers because IRS regularly receives subsequent declaration-vouchers which are not accompanied by remittances. IRS has no need for, and thus routinely destroys, all declaration-vouchers which are not accompanied by remittances. IRS does not keep records concerning nonremittance declaration- vouchers but estimates that it received and destroyed about / 2 7/ (268070)

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