Annual Report of the Social Security Board of Trustees Released

It contains some useful information.

Church Law and Tax 1991-09-01 Recent Developments

Internal Revenue Service – Administration

The IRS Commissioner has released his most recent annual report, and it contains some interesting and useful information. The report, which describes 1989 data (the most recent available), is a compendium of statistical data and tables. Here is a run-down of the information most useful to church leaders: (1) The IRS processed 199.6 million tax returns in 1989 (a 2.9% increase over 1988). About half of these returns were individual income tax returns. (2) $1.01 trillion in taxes was collected in 1989 (up 8.4% over 1988). These taxes consisted of personal income taxes ($515 billion), corporate income taxes ($117 billion), social security taxes ($345 billion), and excise taxes ($26 billion). (3) Taxpayers are encouraged by the IRS to contribute donations to reduce the federal deficit. For 1989, 529 taxpayers responded with total contributions of $204,000. (4) The IRS audited 1.07% of all individual income tax returns for 1989 (down from 1.26% in 1988, and 1.79% in 1987). The 1.2 million returns audited in 1989 resulted in additional taxes and penalties of $21 billion. (5) The new “Information Returns Program” (IRP), which matches individual tax returns with “payer statements” (e.g., W-2 and 1099 forms) detected more than 3.7 million apparent discrepancies. (6) What are a taxpayer’s chances of success in appealing an adverse IRS determination? The Commissioner’s report indicates that the chances are not good. Taxpayers prevailed 3.7% of the time before the Tax Court, 17.7% before the federal district courts, and 9.5% before the federal appeals courts. All taxpayers, including clergy, must consider this data when deciding whether or not to appeal an adverse IRS determination. (7) The Commissioner stated that one of the most vital issues facing the IRS today is the modernization of its computer systems. Pilot projects are underway to coordinate computer systems with image-reading technologies. There is little doubt that these efforts eventually will result in a much higher rate of taxpayer compliance.

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