IRS Attempting to Reduce Form 1040 Red Tape

The Federal Government document that tens of millions of American love to hate is scheduled to get a face lift.

The IRS plans changes to Form 1040, which most taxpayers use to report their federal taxes, the agency said Tuesday. Taxpayers could begin using a revised form as soon as the 2009 tax filing season, said IRS senior spokesman Terry Lemons. "What we are shooting for is a form that is simplier and easier to use for taxpaers," said Lemons, confirming mentions of the anticipated revision in a recent Governmnet Accountability Office audit and a report by Tax Analysts, a non-profit organization that tracks tax issues.

As envisioned by the IRS, an as-yet-undertermined number of less-frequently used lines dealing with adjustments to income, credits, taxes and payments would be removed from the cover page of Form 1040 and relocated to a new Schedule 0. That would simplify the current 77-line form, and free up space for any future tax reporting changes that could conceivably be approved by congress and the White House.

Lemons said the changes are still evolving, explaining that "it's still really earling in the process."

Although Form 1040 typically undergoes virtually unnoticed revisions from year to year, it hasn't been subjected to a major overhaul since 1977. According to the IRS, that revision scrapped a two-column format at the top of the tax-filling form an moved the signature line from the cover page to the final entry.

Lemons stressed that the changes being planned are expected to be less radical. Taxpayers "are not going to get a surprise when the new form comes in the mailbox," he said.

Although the IRS tentatively plans to introduce the changes for the 2009 tax fling season, the start date could be delayed by agency funding issues and other logistics, lemons said.

Approximately 135 million federal tax returns are filed on Form 1040 or one of its variants each year, making it the IRS most frequently-used filing document. However, the filers who submitted more than 73 million federal tax returns electronically in 2006 typically typed datat into computer-generated boxes without ever actually seeing the Form 1040 that underlines the software.

That's a development the IRS makes clear it welcomes.

"We're hoping fewer and fewer people see the 1040 because they file electronically," said Lemons


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