C. Eugene Steuerle The nonpartisan Urban Institute publishes studies, reports, and books on timely topics worthy of public consideration. The views expressed are those of the authors and should not be attributed to the Urban Institute, its trustees, or its funders.
© TAX ANALYSTS. Reprinted with permission.Note: This report is available in its entirety in the Portable Document Format (PDF).
The tax reform commission has not been afraid to tackle some fairly big and controversial tax issues, including reform of many of the deductions, exclusions, credits, and other tax preferences in the tax code. One less exciting but clearly relevant issue deserves its attention as well. Even when tax preferences make sense, and options for alternative ways of calculating net income are reasonable, maintaining them should be dependent on the ability of the IRS to administer them. Not only has the agency been assigned far more to do than is humanly possible, but in many cases compliance could be improved and taxpayer burdens lowered with better reporting systems in place. The reform commission, therefore, should consider making recommendations for improved information reporting wherever it deems private costs are reasonable relative to the improved compliance and taxpayer simplification that would result. Where time constraints are binding, it should at least suggest that the IRS formally be tasked with making recommendations in this area on a regular basis. In this note, I suggest one ripe area for expanded reporting involves capital gains, particularly from mutual funds and brokerage houses.
Note: This report is available in its entirety in the Portable Document Format (PDF).
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