Renacci, Carney Introduce Bill to Simplify Tax Information Reporting

Statement

Today, U.S. Rep. Jim Renacci (R-OH) and U.S. Rep. John Carney (D-DE) introduced bipartisan legislation -- Information Reporting Simplification Act of 2015 -- to provide a safe harbor eliminating the need to correct small dollar errors made on information returns and payee statements.

Under current law, unnecessary burdens are placed on taxpayers, the IRS, and businesses in correcting minor errors on information returns and payee statements. Generally, if a reported amount is incorrect by any dollar amount -- even as little as $1 - an information-return filer must issue a corrected return or statement and may be subject to a penalty, a taxpayer must file an amended tax return if he or she already has filed, and the IRS is burdened with processing the amended return. According to the National Taxpayer Advocate, without a safe harbor, there were over 90 million corrected or amended Forms W-2 and 1099 filed in 2011 alone. These corrections are often immaterial with little to no impact on the recipient's tax liability.

"As a CPA and former business owner, I understand that this safe harbor is not only a win for taxpayers, but also benefits the IRS and businesses that file information returns," Renacci said. "Our bill relieves the burden on taxpayers who face new costs in preparing and filing amended returns as a result of receiving amended statements with small dollar corrections; on the IRS who must process all of the minimal corrections and amended returns; and on businesses which must reprocess forms, print and mail new statements, and submit new forms to taxpayers and the IRS."

"Making our tax system simpler and more efficient is something we can all agree on. This legislation not only helps taxpayers, but also lessens the burden on the IRS. Passing this bill is one small step we can take towards a better system for both the taxpayers and the government," Carney said.

As a CPA, Renacci has represented the 16th district of Ohio since 2011 and sits on the Ways and Means Committee. Carney has served as Delaware's lone member of Congress since 2011 and sits on the Financial Services Committee.

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