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Issue 36654

1040SR - Let Seniors Use the Short Tax Form

Issue Statement: Determine if the Form 1040-SR: U.S. Tax Return for Seniors clearly communicates appropriate guidance to the public.

Goal Statement: The goal of this project is to review and make recommendations to the IRS that will enhance customer service and improve the taxpayer’s experience.

TAP RECOMMENDATION

ID 1633 Income Section, lines 1-6

Add a line for “Additional Income” and a reference to Schedule 1 Insofar as the taxpayer can itemize deductions, there may later arise, through the tax benefit rule, the need to add income back (such as in the case of a later recovered loss deducted the prior year). There should be a reference in this section to Schedule 1 for additional income, as there is at line 9 for Itemized Deductions. Further, under 10 different circumstances, the taxpayer may not use Schedule 1 and must refer to the 12 pages of calculation instructions in Publication 525 to identify and report additional income.

IRS Action:TAP reviewing IRS response

ID 1633 Unsure what is requested. Line 7a is “Other income from Schedule 1, line 9.”

TAP RECOMMENDATION

ID 1634 It is our understanding that the IRS intends to incorporate the Instructions to Form 1040 as the Instructions to Form 1040-SR. We suggest the Form 1040-SR include cross references for relevant form lines to their corresponding Form 1040 Instruction lines The Instructions for Form 1040 refer to line numbers in the Form 1040, both prospectively and retrospectively. The line numbers in Form 1040-SR do not match the Form 1040 Instructions.

IRS Action:TAP reviewing IRS response

ID 1633 Form 1040 and 1040-SR line numbers are the same. Form 1040-SR

TAP RECOMMENDATION

ID 1635 Utility of this form, apart from its enhanced font size, over Form 1040 is unclear. The Form 1040-SR implies the inclusion, or at least review, of 11 schedules and other forms, including Schedule A (Itemized Deductions), Schedule EIC (Earned Income Credit), Schedule 1 (Additional Income and Adjustment to Income), Schedule 2 (Tax), Schedule 3 (Nonrefundable Credits), Schedule 4 (Other Taxes), Schedule 5 (Other Payments and Refundable Credits), Form 4972 (Tax on Lump Sum Distributions), Schedule 8812 (Additional Child Tax Credit), Form 8814 (Parent’s Election to Report Child’s Interest and Dividends) , and Form 8863 (Education Credits).

Because many taxpayers filing this form may have income comprised mostly of passive investment income, they may also need Form 6251 (AMT) and Form 8962 (Premium Tax Credit). As well, we anticipate that many taxpayers using the Form 1040-SR will need Form D (Capital Gains and Losses) and Form 8949 (Sales and Other Dispositions of Capital Assets). There is, therefore, a good possibility the taxpayers will need 15 additional Forms and Schedules attached to Form 1040-SR.

IRS Action:Not adopted

ID 1635 Unclear what is requested. Non adopt. Form 1040-SR is legislatively mandated (P.L. 115-123, Div. D, Title II, sec. 41106). Because of last year’s Form 1040 redesign, both forms are similar.

TAP RECOMMENDATION

ID 1636 These two forms are identical except for the font size and the standard deduction information. On the 1040, the standard deduction information is in a balloon in the left-hand margin; and on the 1040-SR, it is in a box at the bottom of page 1. Rename the draft Form 1040-SR to Form 1040 and eliminate the current draft Form 1040 There is no reason to have two identical forms. One of the complaints taxpayers continue to make is the font size is too small and the form is difficult to read. The draft 1040-SR solves this problem. In addition, the draft Form 1040 is no longer a one-half page form so there is no reason to keep it.

IRS Action:Not adopted

ID 1636 NOTE: Also included in project #40751: 2019 F1040

Non adopt. Form 1040-SR is legislatively mandated (P.L. 115-123, Div. D, Title II, sec. 41106). Because of last year’s Form 1040 redesign, both forms are similar

TAP RECOMMENDATION

ID 1637 All three of these schedules use a type font that is smaller than used on the Form 1040-SR Increase the font size on all three of these forms so it matches the font size on the Form 1040- SR

One of the complaints taxpayers continue to make is the font size is too small and the form is difficult to read. The font size used on the Form 1040-SR is much easier to read. All three forms take up less than a page and there should be plenty of room to increase the font size, especially since they will be commonly used forms. Form 1040-SR, Third Party Designee section and Paid Preparer Use Only section

IRS Action:Not adopted

ID 1637 NOTE: Also included in project #40751: 2019 F1040

Non adopt. We are unable to make this change for 2019. Form 1040-SR, Third Party Designee section and Paid Preparer Use Only section

TAP RECOMMENDATION

ID 6 Third Party Designee (Other than paid preparer)

Do you want to allow another person (other than your paid preparer) to discuss this return with the IRS? See instructions.

?Yes. Complete below
?No

Paid Preparer Use Only

Check if:
? 3rd Party Designee

Third Party Designee
(Other than paid preparer)

Do you want to allow another person (other than your paid preparer) to discuss this return with the IRS? See instructions.
?Yes. Complete below
?No
? No
? Yes

? Paid preparer
-or-
? Other third party. Complete below

Paid Preparer Use Only

Check if:
? 3rd Party Designee

The addition of the “third party designee” section while leaving the checkbox on the “Paid preparer Use Only” section is confusing. The taxpayer has three choices: allow the paid preparer to be a third-party designee; selecting a person other than the paid preparer to be a third-party designee; or not having a third-party designee at all. Providing for all three alternatives and moving them all to the same section of the form will make it much easier for the taxpayer to understand their three alternatives and to indicate their choice.

IRS Action:Not adopted

ID 1637 Also included in project #40751: 2019 F1040

Non adopt. We will clarify the use of the check boxes in the instructions and consider for the next revision.

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2020 TAP Annual Report

The 2020 TAP Annual Report highlights our key recommendations to improve IRS customer service and summarizes our key accomplishments and activities, including the 237 recommendations submitted to the IRS in 2020.

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