National Taxpayer Advocate Service – FY 2002 Annual Report To Congress

Washington, D.C. – Jan. 2003 – The IRS is currently exploring the use of publicly available software that will help determine the cost basis for securities transactions. Such technology can reduce taxpayer burden by streamlining documentation of cost basis calculations during audits and can create a reliable standard for taxpayers, preparer, and the IRS.

The National Taxpayer Advocate encourages the IRS to continue it efforts to reduce taxpayer burden regarding capital gain and loss issues, and supports all education and assistance efforts that are currently in place. Our office is particularly interested in the computer software that the IRS is testing regarding the computation of basis. It appears this initiative would not only significantly reduce taxpayer burden in preparing tax returns, but would also impact the number of audits, administrative appeals, and litigated cases that result in a disagreement between taxpayers and the IRS regard.