April 10,2003

Baucus and Grassley Release GAO Study


Baucus today released the findings of a General Accounting Office (GAO) investigationinto the Internal Revenue Service (IRS), reporting that millions of taxpayer and IRSdollars could be saved through more user- friendly tax forms.

The GAO investigation into the IRS forms and instructions was completed at the requestof Grassley and Baucus.

According to the GAO, between July 1997 and June 2002, the IRS used focus groupsmade up of individual taxpayers and its employees to critique revisions to only fiveindividual tax forms. According to IRS officials, the agency revised about 450 tax formsand instructions in 2001, many of which were for individual income tax returns.

Grassley said, "We just had a hearing showing that more than half of individual tax filerspay someone to do their taxes for them each year. They pay a lot of money -- $14.7billion -- for this service. Clearly many taxpayers find the paperwork of taxpayingfrustrating, and maybe even maddening. It's hard to see why the IRS doesn't spend moretime developing tax forms with real life taxpayers."

"With the tax filing deadline right around the corner, I'm disturbed by the GAO findingsproving that the complex IRS tax forms are causing unnecessary errors and costingthousands and thousands of dollars," Baucus said. "It's easy to see that by working moreclosely with taxpayers, the IRS can create filing forms that are based on common sense.

This is another example of how an ounce of prevention is worth a pound of cure."

The GAO found that had the IRS used focus groups for the instructions used to calculatethe rate reduction credit during the 2002 filing season, approximately two million errorscould have been eliminated, saving taxpayers and the IRS $1.5 million.

In comparison, it would cost the IRS only $56,000 to test the forms.