What are the benefits and drawbacks of exact withholding? Q.What are the benefits and drawbacks of exact withholding? A.An exact-withholding system could ease the burden of tax compliance on many individuals, especially if it were accompanied by substantial simplifications to the tax code. Potential drawbacks include a heavier administrative burden for those charged with withholding income tax and for government collection agencies. Read more about What are the benefits and drawbacks of exact withholding?
How have cuts to the IRS’s appropriations affected its ability to administer the federal tax system? Q.How have cuts to the IRS’s appropriations affected its ability to administer the federal tax system? A.The IRS administers the federal tax laws that the Congress enacts. However, from 2010 through 2022, the IRS budget was cut by 24 percent, after accounting for inflation, leading to cutbacks in taxpayer services and enforcement. Read more about How have cuts to the IRS’s appropriations affected its ability to administer the federal tax system?
What are prepopulated tax returns? Q.What are prepopulated tax returns? A.Advancements in technology, greater availability of third-party information, and tax simplification have enabled tax authorities in many countries to “prepopulate” taxpayers’ returns—that is, the tax authorities at least partially complete tax returns before transmitting the forms to taxpayers. In the United States, however, the IRS does not prepopulate tax returns. Read more about What are prepopulated tax returns?