Tax Administration

Providing taxpayers with easy-to-read forms and publications is a difficult task. The Internal Revenue Service (IRS) must strike a balance between the need for these documents to reflect a highly complex tax code and the need to make these documents understandable and easy-to-read. Although it faces many challenges in developing and revising forms and publications, IRS has instituted a process for doing so that includes reasonable components and is seeking ways to further improve it. IRS has begun a dialogue with groups representing tax professionals, but it has had problems in identifying and responding to the needs of individual taxpayers who are not represented by any professional organization. Because clear and understandable forms help to promote voluntary compliance, readability is a continuous concern. Thus, IRS should continue to seek ways to identify what individual taxpayers find most difficult to understand. IRS should also explore the use of potentially useful, but untapped, sources of information that may reveal points of taxpayer confusion and use existing information in new ways.

GAO found that: (1) IRS efforts to provide taxpayers with accurate and easy-to-read tax forms have been hampered by increasingly complex tax codes, frequent tax code revisions, and taxpayers' reading ability; (2) the IRS process for developing and revising its tax forms and publications appears reasonable and provides clear lines of responsibility and accountability, specific timeframes, adequate management oversight, sufficient opportunities to evaluate suggestions from internal and external sources, and appropriate strategies for coping with sudden tax law changes; (3) IRS periodically reviews and revises its publications and tax forms so that accurate forms and publications are available to taxpayers for each filing season; (4) IRS considers comments from taxpayers and tax preparers, payroll professionals, accountants, and lawyers regarding clarity improvements; (5) IRS has initiated several special projects to study taxpayer comprehension problems and to further improve its forms and publications; (6) despite its ongoing commitment to improvement, IRS does not have a systematic way to identify the specific areas that cause individual taxpayer confusion; and (7) IRS needs to find ways to readily identify the specific concerns of individual taxpayers.

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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