Additional Actions Are Needed to Reduce Alimony Reporting Discrepancies on Income Tax Returns

The Commissioner, Small Business/Self-Employed Division, should modify the IRS's existing compliance strategy to include specific actions to be taken to reduce the billions of dollars associated with alimony reporting discrepancies.

The Commissioner, Wage and Investment Division, should include the validation of the alimony recipient TINs as part of IRS's tax return processing systemic TIN validation process. For those TINs identified as not being issued by the SSA or the IRS, reject the e-filed tax returns.

The Commissioner, Wage and Investment Division, should modify ERS programming to send both e-filed and paper tax returns that contain an invalid recipient TIN to the Error Resolution function for review and correspondence with the taxpayer.

The Commissioner, Wage and Investment Division, should ensure that IRS employees understand and comply with procedures to assess a penalty on taxpayers who do not provide a valid recipient TIN when they claim an alimony deduction.