Grassley Urges IRS To Simplify Tax Filing For Sole Proprietors

by Mike Godfrey, Tax-News.com, Washington

15 August 2007

Sen. Chuck Grassley (R - Iowa) has urged the Internal Revenue Service to simplify the tax filing process for US sole proprietorships, in response to a report which said that the majority of sole proprietors under-report their income.

“Compliance with federal tax laws is already a major expense and headache for America’s small businesses. So, the burden is on the IRS to streamline filing processes and demonstrate better use of information it has already about compliance problems before sole proprietors are asked to do more," Grassley commented in a statement.

The remarks of the Senate Finance Committee's ranking Republican were made after the publication of a report by the Government Accountability Office (GAO) which showed that six out of ten sole proprietors under-reported their income. However, the report concluded that only a small percentage of this group was responsible for the bulk of this tax loss.

According to Grassley, the report highlighted the need for the IRS to help sole proprietors to file correctly, by making the process much more simple.

"Today’s report points out common-sense fixes that ought to be made, including scrapping a form that is supposed to be submitted with a special red, magnetic ink so IRS scanners can more easily read it," he observed, concluding:

"I hope to get additional reality-based comments from taxpayers about other options put forward by the Government Accountability Office to increase compliance without overburdening small business owners. Honest taxpayers shouldn’t be forced to bear the brunt of IRS efforts to crack down on bad actors."

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