- The Washington Times - Friday, February 22, 2002

ASSOCIATED PRESS
The sweeping tax law enacted last year is forcing taxpayers to grapple with dozens of changes. One new line alone has caused more than 1 million errors.
Even with the tax relief President Bush signed, the tax laws are "an abomination" and new government reports will illustrate the "absurdities," Treasury Secretary Paul H. O'Neill said yesterday. He pledged anew to try to simplify tax laws, but the White House could make his job more difficult: Mr. Bush is proposing new tax credits that would add more complexity.
The 10-year, $1.35 trillion tax cut passed by Congress and signed by Mr. Bush in June made 441 tax-law changes, according to H&R; Block Inc. Most will be phased in gradually over the decade, but some important ones are in effect.
The Internal Revenue Service expects about 132 million individual returns this year, including a projected 45 million to be filed electronically. The deadline is midnight April 15 in most of the country. Procrastinators can request an automatic four-month extension to file the forms but any taxes owed must be paid on time to avoid penalties.
Through Feb. 15, average refunds were $2,210, almost 12 percent more compared with the like period last year, mainly because of the lower tax rates and a bigger child tax credit, according to statistics released yesterday. Electronic filing by people using home computers is running 38 percent ahead of last year.
Due to extra mailroom precautions resulting from last year's anthrax scare, IRS Commissioner Charles Rossotti said more taxpayers should give computer electronic filing a fresh look to reduce the chance for paperwork delays and to cut the agency's costs.
"The less paper we get, the better off we're going to be," Mr. Rossotti said.
Millions of taxpayers got some benefit of the big tax cut in the form of rebate checks of up to $300 for individuals and $600 for married couples that were mailed out over the summer and fall.
But Congress, seeking to spread the wealth, authorized a new line on this year's tax forms for people to claim a credit if they got no check or received less than the full amount. This credit is sowing widespread confusion; the IRS has received more than 1 million returns with errors related to it.
The upshot is that people who got a check in the full amount cannot claim the credit, and those who got nothing or got less than the full amount might be eligible. That includes people claimed as dependents in 2000 but not in 2001. Consult the 1040 Form instructions carefully to find out.
Other important changes affecting 2001 returns:
The child tax credit for eligible families rises from $500 to $600.
Alternative minimum tax exemptions rise by $4,000 for married couples filing jointly, $2,000 for individuals and heads of households.
Income tax rates, except the 15 percent rate, were reduced by 1 percentage point on July 1, 2001.

Copyright © 2018 The Washington Times, LLC. Click here for reprint permission.

The Washington Times Comment Policy

The Washington Times is switching its third-party commenting system from Disqus to Spot.IM. You will need to either create an account with Spot.im or if you wish to use your Disqus account look under the Conversation for the link "Have a Disqus Account?". Please read our Comment Policy before commenting.

 

Click to Read More and View Comments

Click to Hide