Frequently Asked Questions
A: About 25 million individuals report some business income, 70% of whom have small amounts of income from home businesses, Uber driving and other such occasional occupations. The individual taxpayers with business income covered by this proposal have an average of over $95,000 reportable income. The passthrough businesses (S-Corporations and partnerships) covered by this proposal average about $400,000 reportable income.
Most of these businesses report their income and pay their taxes and would owe nothing more. Their income would simply be reported by third parties in the same way as almost all other taxpayers who receive W-2’s or 1099’s. Those who do not fully pay only increase the burden on everyone else.
A: As we note in the September Tax Notes article, the IRS has also had several major notable large technology project success, especially in recent years with the Return Review Program (RRP), the Foreign Account Tax Compliance Act (FATCA) program and the IRS responsibilities under the Affordable Care Act. Many of the unsuccessful projects in the past were those that tried to replace legacy systems in complex step-by-step ways. Our proposal tries to minimize its dependence on integration with the IRS’s legacy systems. Of course, some integration is essential, but in the main we envision standing up new systems that will eventually just replace current systems.