Tax Administration

Information Returns Should Increase Proper Reporting of Farm Income Gao ID: GGD-86-69 July 22, 1986

Pursuant to a congressional request, GAO studied the need to improve taxpayer compliance in reporting taxable commodity credit loan and crop insurance income, specifically ways in which the Internal Revenue Service (IRS) could better detect unreported income.

GAO found that, in 1982: (1) 7 percent of crop loan and insurance income recipients failed to file federal income tax returns; (2) 77 percent of the taxpayers whose returns GAO reviewed failed to properly report their income; (3) computer matching of information returns with tax returns should help IRS to determine whether income was properly reported and the applicable taxes were assessed; and (4) IRS should improve its forms, filing instructions, and computer programs.

Recommendations

Our recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.

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