The IRS Can Make the Estimated Tax Forms and Instructions Easier To Understand and Use

Each year, millions of taxpayers are required to make estimated tax payments because they have income that is not subject to withholding and/or from which not enough tax is withheld. The forms and instructions individual taxpayers use to comply with the estimated tax requirements are examined as part of a series presented in response to a request by the Joint Committee on Taxation.

Millions of taxpayers are penalized each year for not making adequate and/or timely payments of estimated tax, because the related forms and instructions are difficult to use and understand. Although the Internal Revenue Service (IRS) has made some recent improvements which should alleviate the problem somewhat, taxpayers could more easily understand the forms and instructions if: (1) a composite listing of pertinent references were available, or if the needed information were not scattered; (2) the instructions better explained the rationale for estimated tax; and (3) the forms and instructions were written more clearly, included more illustrations, and were better designed. Due to the number of taxpayers being affected, IRS should focus on this problem as quickly as possible. A good approach would be to specify these forms and instructions as part of the work to be done under the contract recently awarded to simplify the income tax forms and instructions for individual taxpayers.