davecpa --
Thanks for your clarification. Based on the further information you
provided about the time frame and the focus of the report, I am
confident that I have found the document you are looking for. In the
hope of making this answer even more useful, I will also point you to
two other reports that bear on the issue that interests you.
I am confident that the report you are seeking is entitled "Tax
Deductions: Estimates of Taxpayers Who May Have Overpaid Federal Taxes
by Not Itemizing." It was prepared by the General Accounting Office
and first submitted, on April 12, 2001, to Dick Armey, then Majority
Leader of the House of Representatives.
The entire report is available in PDF format at this link:
General Accounting Office: GAO-01-529
http://www.gao.gov/new.items/d01529.pdf
(A PDF document requires Adobe Reader to access. In the unlikely event
that it is not installed on your computer, here is a link to a free
and convenient download: Adobe Reader: Download
http://www.adobe.co.uk/products/acrobat/readstep2.html )
This excerpt from the introduction to the 10-page report will give you
a thumbnail description of its scope, including its focus on the
mortgage interest deduction:
"This report is our initial response to your request for an estimate of the
number of taxpayers who may have overpaid their taxes by claiming the
standard deduction instead of itemizing their deductions, as well as the
amount of taxes they may have overpaid. For this report, we estimated the
number of returns where taxpayers who claimed the standard deduction
may have had deductible mortgage interest expense in excess of their
standard deduction. We developed our estimate by matching data from
different Internal Revenue Service (IRS) databases."
Source: Report No. GAO-01-529, at p. 1
And here is its ultimate conclusion:
"Mortgage Interest Payments Exceeded the Standard Deduction for Some
Taxpayers Who Did Not Itemize
"For tax year 1998, taxpayers filed over 124 million tax returns. On almost
86 million, or about 70 percent of these returns, taxpayers claimed the
standard deduction. On the remaining 38 million, or about 30 percent, they
itemized their deductions. Of the 86 million returns claiming the standard
deduction, we estimate that on about 510,000 returns, taxpayers may have
reduced their taxes if they had itemized deductions . . . .
"We estimated that these taxpayers may have overpaid their 1998 taxes by
about $311 million. The average overpaid tax amount is $610. On about 35
percent of returns, taxpayers may have overpaid their taxes by more than
$500 . . . ."
Source: Report No. GAO-01-529, at pp.6-7
On the assumption that you may be interested in obtaining hard copies
of the report, here, for your convenient reference, is ordering
information:
"The first copy of each GAO report is free. Additional copies of reports are
$2 each. A check or money order should be made out to the
Superintendent of Documents. VISA and MasterCard credit cards are also
accepted.
"Orders for 100 or more copies to be mailed to a single address are
discounted 25 percent.
"Orders by mail:
U.S. General Accounting Office
P.O. Box 37050
Washington, DC 20013
"Orders by visiting:
Room 1100
700 4th St., NW (corner of 4th and G Sts. NW)
Washington, DC 20013
"Orders by phone:
(202) 512-6000
fax: (202) 512-6061
TDD (202) 512-2537
Source: Report No. GAO-01-529, at p.9
Additional Information:
On March 29, 2002, the GAO submitted a second report to the House
Majority Leader Armey, which provided more information supporting and
further quantifying the proposition that many taxpayers overpay
because of a failure to itemize deductions. Here is a link to the
text of that report:
Uncle Fed: GAO Report: Tax Deductions: Further Estimates of Taxpayers
Who May Have Overpaid Federal Taxes by Not Itemizing (GAO-02-509,
March 29, 2002)
http://www.unclefed.com/GAOReports/gao02-509.pdf
For your convenient reference, I include here, as I did above, a key
excerpt from the introduction to the report and one from its
conclusion:
First, from the introduction:
"This is our second report in response to your request for an estimate of the
number of taxpayers who may have overpaid their taxes by claiming the
standard deduction instead of itemizing their deductions, as well as of the
amount of taxes that they may have overpaid. In our first report,1 we
estimated that on about 510,000 returns for tax year 1998, taxpayers who
claimed the standard deduction had deductible mortgage interest expense
in excess of their standard deduction and overpaid their taxes by about
$311 million.
"In this report, our estimates include payments not only for mortgage
interest but also for mortgage points, state and local income taxes,
charitable contributions, and real estate and personal property tax for tax
year 1998. We developed our estimate for mortgage interest payments,
mortgage points, and state and local income taxes by matching a sample of
tax year 1998 returns for individuals who did not claim itemized
deductions with information in other Internal Revenue Service (IRS)
databases. This information was supplied by lending institutions and
employers and consisted, respectively, of the mortgage interest and points
paid by each taxpayer and the wages paid to each taxpayer. Our estimates
for charitable contributions and real estate and personal property taxes
are averages for various income classes based on Department of Labor
data. We assigned (imputed) these class averages to each taxpayer in the
same income class in our sample. In this report, we also present
information on the proportion of returns prepared by a third party on
which taxpayers may have overpaid their taxes."
Source: Report No. GAO-02-509, at pp. 1-2
Now this, from the conclusion of the report:
"For tax year 1998, taxpayers filed more than 124 million tax returns. On
almost 86 million, or about 70 percent, of these returns, taxpayers claimed
the standard deduction. On the remaining 38 million, or about 30 percent,
taxpayers itemized their deductions. We estimate that on about 948,000 of
the returns claiming the standard deduction, taxpayers could have
reduced their taxes because of mortgage interest, mortgage points, and
state and local income tax payments that exceeded the standard
deduction. After imputing charitable contributions and real estate and
personal property tax payments to taxpayers, we estimate that the number
of returns on which payments for itemized deductions exceeded the
standard deduction could be as high as 2.2 million returns . . . .
"In addition, as shown in table 1, we estimated that taxpayers who could
have reduced their taxes by itemizing mortgage interest and points and
state and local income tax payments may have overpaid their 1998 taxes
by about $473 million. We estimated that if charitable contributions and
real estate and personal property tax payments are also imputed,
taxpayers may have overpaid taxes by as much as $945 million (or about
0.1 percent of all 1998 individual income tax paid). On the basis of this
$945 million estimate, the average estimated overpaid tax amount is
$438 . . . .
"We also estimated the number of returns with overpayments that were
prepared by third parties. Most of these third-party preparers were paid
preparers; less than 1 percent of the returns were prepared by IRS and
other noncommercial preparers. On the basis of the data in table 3, we
estimate that for about 50 percent of the taxpayers who might have
overpaid their taxes, the tax returns were prepared by a third party."
Source: Report No. GAO-02-509, at pp. 7-8.
With respect to the use that you intend to make of the information you
requested, note especially the last paragraph of the above excerpt,
which indicates many returns prepared by third-party preparers
overstated (not understated) the taxpayer's tax liability. This
finding seems to be inconsistent with a charge that third-party
preparers systematically aid and abet the taking of excess deductions.
Finally, for completeness, I want to give you a link to a copy of the
1998 GAO report that I referred to in my clarification request. This
report, to the leadership of the House and Senate Finance Committees,
has a much broader scope, but its discussion of the relative burdens
and complexities of the current income tax system may be of some use
to you, at least as background material:
Here is a link to a text file of that report. You should be able to
obtain a hard copy of it using the contact information supplied
earlier in this answer:
Government Printing Office: Tax Administration: Potential Impact of
Alternative Taxes on Taxpayers and Administrators (GAO/GGD-98-37,
1/14/98)
http://frwebgate.access.gpo.gov/cgi-bin/useftp.cgi?IPaddress=162.140.64.21&filename=gg98037.pdf&directory=/diskb/wais/data/gao
The following paragraph from the report may be particularly useful to
you in supporting the point that the complexity and burden of the
current tax system motivates many people to underreport their
legitimate deductions (or not itemize at all):
"Although in recent years over 100 million individuals filed income
tax returns annually, as table II.4 shows, most of them did not report
many common income, adjustment, deduction, and credit items every
year. For instance, for tax year 1993, most of the 114.6 million
individuals who filed did not claim such items as capital gains or
losses, rental income, itemized deductions, the earned income credit,
or the foreign tax credit, minimizing their compliance burden. And,
although almost 33 million individuals itemized their deductions and
included themselves in the millions of taxpayers filing supplemental
forms and schedules, relatively few of those itemized, for instance,
miscellaneous deductions that generally involve much taxpayer time and
recordkeeping whether claimed or not. Over a lifetime, of course,
circumstances could allow taxpayers to include many items on their
returns that do not show up every year. "
.
Source: Report No. GAO-GG-98-37, at pp. 37-38
Search Strategy:
I initially found the reports with the following Google search:
taxpayer itemize OR itemized deductions 1098 gsa OR gao
://www.google.com/search?hl=en&lr=&ie=UTF-8&q=taxpayer+itemize+OR+itemized++deductions+1098+gsa+OR+gao&btnG=
The remainder of this project was mainly concerned with conducting
searches within government websites and on the Web in general to give
me reasonable confidence that I had found the material you are seeking
and that I was not overlooking other promising information.
There is obviously a lot of information out there on tax reform and
taxpayer burdens of compliance, and I am happy to have been able to
help you zero in on the documents that most interest you.
If any of the above is unclear or in the unlikely (I think) event that
I have not provided you with the document you remember, please ask for
clarification before rating the answer, and I would be happy to assist
you further.
markj-ga |
,
0 Comments
)