A bill to amend the Internal Revenue Code of 1954 to improve the collection of federal income taxes imposed on dividend and interest income.

Summary

Amends the Internal Revenue Code to require the Internal Revenue Service (IRS) to compare quarterly tax returns filed on July 15 of each calendar year with dividend and interest income informational returns (form 1099) filed by corporations and financial institutions for the preceding calendar year to determine whether a taxpayer is fully complying with reporting requirements for dividend and interest income. Requires the IRS, in the case of unreported dividend and interest income, to mail a notice to a noncomplying taxpayer within 60 days of a determination of tax deficiency. Requires such notice to state: (1) that the IRS has determined that there is unreported dividend or interest income and the amount of the tax deficiency; and (2) that failure to pay such tax deficiency within 45 days will result in a tax penalty equal to 100 percent of the deficiency unless the taxpayer proves that the tax deficiency does not exist. Requires the IRS, in the case of taxpayers with unreported dividend and interest income who have not filed a timely return, to mail a notice to such taxpayer stating: (1) that the IRS has received informational returns indicating that the taxpayer has received dividend and interest income; (2) that failure to pay tax on such income within 45 days will result in a tax penalty equal to 100 percent of the tax deficiency; and (3) failure to file an income tax return or an exemption certificate within 45 days will result in an addition to tax equal to 14 percent of the unreported dividend and interest income. Expresses the sense of Congress that: (1) the procedures for monitoring dividend and interest income established by this Act, if adequately funded, will substantially improve compliance with the income tax imposed on such income; and (2) adequate funding of such procedures is necessary to maintain the existing high level of voluntary compliance with the Federal income tax.

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Documents

1 official file

• Introduced in House

  summary · EN · 12 June 1980

  Open at official source

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