IRS causes taxpayer errors, says Treasury report

The Internal Revenue Service could help taxpayers reduce errors by clarifying instructions and improving the layout of Form 1040, a Treasury Department report released today charged.
JUN 15, 2009
The Internal Revenue Service could help taxpayers reduce errors by clarifying instructions and improving the layout of Form 1040, a Treasury Department report released today charged. The report, from the Treasury inspector general for tax administration, found that more than 2.3 million of the 7 million math errors taxpayers make each year in IRS filings could have resulted from unclear or inadequate forms. An analysis of taxpayer errors on returns filed in 2006 for the 2005 tax year showed that the most frequent errors made were in calculating deductions for personal tax exemptions, omitting Social Security numbers of dependents and mistakenly claiming children who exceeded the age limit for the Child Tax Credit. In fact, for taxes filed in 2006, taxpayers made more than 210,000 errors in computing their exemption amounts. Another 170,000 taxpayers failed to include a dependent’s identification number on Form 1040 and 137,000 taxpayers were denied the Child Tax Credit because the child claimed for the credit exceeded the age requirement. The report indicates that many of these mistakes wouldn’t have occurred had the IRS used clearer instructions on its forms. “Changes to tax forms and instructions could reduce some of the errors made by taxpayers on their individual income tax returns,” J. Russell George, the Treasury inspector general for tax administration, said in a statement. “Moreover, simplifying the filing process for taxpayers by clarifying forms and instructions increases compliance and reduces burden.”

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