Senate Finance Committee Chairman Max Baucus (D-Mont.) unveiled a tax reform discussion draft aimed at modernizing tax administration while minimizing compliance burden, reducing tax-related identity theft and reducing the tax gap. This discussion draft represents a combination of proposals offered by both Republican and Democratic members of the Senate Finance Committee. It includes:
- Simplifying the tax filing process and increasing the use of modern technology, including easier online filing of 1099s and scan-able information on computer generated returns; amending filing deadlines for information returns; and expanding electronic filing requirements to returns prepared by paid preparers and all M-3 and 990 forms.
- Combating tax-related identity theft by eliminating the use of the full social security numbers on W-2 forms; granting IRS access to the HHS’ Directory of New Hires to verify employment data; increasing criminal penalties for tax related identity theft; and requiring the IRS to notify taxpayers its believes have been victims of identity theft.
- Reducing the tax gap by increasing information reporting requirements relating to reporting the existence of bank accounts; reporting additional information for mortgages, including outstanding balance; reporting sales of life insurance; requiring colleges and universities to report tuition and expenses paid.
- Increasing collection tools by authorizing the IRS to impose a levy up to 100 percent on payments to Medicare providers delinquent in their taxes; revoking passports of taxpayers with tax delinquencies greater than $50,000; and authorizing the IRS to waive installment payment fees if the taxpayer agrees to automated withdrawals.
For more information the tax administration discussion draft see the links below: