President Obama's tax reform task force on October 16 heard from a proponent of creating IRS-prepared tentative tax returns, an idea that some say could inexpensively make a significant dent in the tax gap.

Stanford Law School Prof. Joseph Bankman, speaking during a discussion of tax simplification at the task force's second public information-gathering webcast, argued that a federal version of California's ReadyReturn pilot program could target lower-income taxpayers, who tend to file simpler returns.

Any ReadyReturn system is bound to produce mistakes, Bankman said, but at lower income levels, "you can live with the errors you may make." The simplified filing process could encourage significant numbers of nonfilers to submit their tax information.

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Barry Melancon, president and CEO of the American Institute of Certified Public Accountants,...called for tax simplification for small businesses, stressing that simplification should go beyond clearer forms or regulations to include more predictable and more broadly applicable tax laws... [and] urged the task force to consider raising and indexing the exemption level for the estate tax in order to focus the tax on only the wealthiest taxpayers.

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Chuck Marr of the Center on Budget and Policy Priorities...  said policymakers should take advantage of what he called the "built-in process" that occurs every year when lobbyists pressure Congress to renew expiring targeted tax incentives. The annual "extenders" bill could include base-broadening measures as offsets, Marr said, allowing tax simplification to benefit from that political momentum.

PERAB is scheduled to meet next on November 2, according to a White House statement. Video of the October 16 panel is expected to be posted to the White House Web site in the coming days. 
 
View the complete article at TAX.com.