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Wednesday, February 20, 2019

Key House Democrats request answers from IRS over new tax forms

The letter, dated February 14, was sent to IRS commissioner Charles Rettig by Democratic Reps. Richard Neal of Massachusetts, the chair of the House Ways and Means Committee, and John Lewis of Georgia, the chair of the panel's oversight subcommittee.
Neal and Lewis say that they want to "better understand the full extent of any due diligence on the usability of the postcard by taxpayers."
The letter asks the IRS to provide information on any third party, including name and address, that "conducted reports, studies, surveys, or focus groups" looking into "the usability of the new postcard," including details on the scope of any such inquiry and if it resulted in any reports being issued.
Spokespersons for Treasury and the IRS did not immediately respond to CNN's request for comment.
The IRS and the Treasury Department announced last year that development was underway on a streamlined version of the form 1040 for individual income tax returns following the passage of the GOP's 2017 tax overhaul.
The Treasury Department and the IRS have described the redesign as a way to improve and streamline the forms.
"As part of the historic Tax Cuts and Jobs Act, this Administration committed to making taxes simple and fair for American families. We are delivering on this promise," Treasury Secretary Steven Mnuchin said in a statement at the time, describing the change.
"The new, postcard-size Form 1040 is designed to simplify and expedite filing tax returns, providing much-needed relief to hardworking taxpayers," Mnuchin said.
But a recent watchdog report suggests that the redesign may have increased the potential for error.
The National Taxpayer Advocate, an independent organization within the IRS, states in its annual report to Congress that "by reducing the 1040 to a postcard size, however, this redesign necessitated the creation of an additional six schedules, some containing only three lines of information. Thus, for approximately 70 percent of taxpayers - nearly 102 million - the six new schedules increase the number of already existing schedules, such as A, B, C, D or E, that taxpayers must complete."
The report says that "while many taxpayers will use software to complete the return, the new schedules will force some taxpayers to cross-reference and transfer data such as credits, deductions, and income, increasing the potential for errors to occur since the tax information is dispersed over many pages and needs to be tracked down and reported on different schedules and forms."
The letter from the pair of House Democrats makes a request for "any and all information related to any reports, studies, surveys, feedback, or focus groups requested by the Wage and Investment Division of the Internal Revenue Service from third parties," undertaken "to assess the usability of the new individual income tax return (IRS Form 1040) -- the "postcard" -- and its six schedules."
It also asks for "the name and title of any Treasury employee or official who was aware a third party was hired to review the usability of the postcard," as well as "a description of what was done with the findings or results upon receipt" and an explanation of "why any and all third-party results were not shared with the public."
The letter sets a deadline of February 27 for responses to the various requests.

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