Week Ending June 4

TheWeekInCongress.com

Week Ending June 4, 2004

HR 4109 Simple Senior Tax Form

BRIEF

The bill would provide a form on which seniors with Social Security and pension incomes could quickly file their yearly income tax. According to bill supporter Representative Mark Foley (R-FL) America’s taxpayers 65 or older can not to use the one-page form 1040EZ, even if they have a simple return and choose not to itemize deductions, but must use the more complicated 1040 form. The new form, unlike 1040A and 1040EZ would not have a $50,000 income cap.

10 million taxpayers over the age of 65 file the standard forms each year and that number is expected to rise to 12.5 million by 2010 and even greater numbers as more ‘Baby Boomers’ reach age 65.

According to Rep. Foley the IRS has tested the new form on a focus group of seniors but has not finally decided to implement the new form. The bill would assure that the IRS revises the form for the 2005 tax return period, he said.

Nevertheless the bill was not without a bit of controversy from Representative Earl Pomeroy (D-ND) who noted that the new forms would probably be put into use with or without HR 4109 but Congress would like to see itself associated with a good idea, “To correct any misunderstandings, seniors are not presently precluded from using the 1040EZ form. On the other hand, it does not capture a senior citizen's deduction relevant to their needs. That is why seniors using simplified forms tend to use the form 1040A. It is a simplified form, 20 million Americans use it, a number of them seniors; but it includes items not relevant to seniors' taxable situations. Items like educator expenses, student loan interest, tuition and fees deductions, these are extra lines on here. They are very clear what they purport to mean, but they are irrelevant to a senior's considerations,” he said and added, “So the IRS, under the leadership of Commissioner Mark Everson, has developed a form that is simple, two pages, captures the sources of income commonly reported by seniors, including investment income, pension, interest, dividend income, capital gains and losses. It includes all of that, but still in a simplified form with a larger font to make it a little more readable for seniors. I commend the commissioner for his leadership of the IRS. I believe that he has taken steps to improve its service to taxpayers while improving compliance with the Tax Code by the taxpayers. I am very heartened about the stepped-up targeted audit activities geared toward large corporate concerns that have been routinely cheating on the Tax Code. I also commend him for this particular initiative simplifying the Tax Code for seniors. I guess we in Congress thought it was such a good idea we are scrambling to get a little bit of the credit ourselves.”

Rep. Foley continued after Rep. Pomeroy’s comments, “I would like to commend the majority. When we took control of Congress in 1994, we were very specific in sending a message to the IRS through hearings we held here in the Capitol that we wanted more simplified forms. So I do not agree to the notion that somehow we are trying to get ahead of the curve here or catch up with the IRS. It is after our pleadings with them to make the IRS more user friendly do we find ourselves now viewing the forms that they are testing. In fact, they have been tested in two locations, in Tampa and in Minneapolis, so we know that the tests are receiving very popular and positive acclamation. Our idea is that we now further define it so that the IRS, in fact, will make this available for all seniors who choose to use them.”

After comments from another supporter of the bill Rep. Pomeroy reiterated, “…back in North Dakota people chuckle about the story of the chicken who was absolutely convinced that dawn arrived as a consequence of his crowing. Well, we have heard some crowing today. And the reality is we are going to have a simplified tax form for seniors. In fact, the Treasury Department has published it, shown us what it is going to look like. All this without a congressional bill. But what the heck. It is a good idea so let us join the party and quickly pass this bill.”

And, of course, in an election year little goes by without an equalizing comment; “I would like to straighten out a couple of things,” Rep. Pomeroy said. “It is not, as my friend and colleague on the Committee on Ways and Means (Rep. Foley) said, that over the last 10 years of Republican majority in this House they have marched steadfastly towards the goal of tax simplification. Well, we all know the reality is a bit different. Hundreds of pages have been added to the Tax Code. It is more complex than ever. Things phase in; things phase out. It is a nightmare. And so I am really delighted to hear both sides of the aisle talking about tax simplification.”

Sponsor: Representative Max Burns (R-GA)

Vote: Passed House with no opposition.