Everything You Wanted to Know
About the IRS Tax Forms
Composition Process But Were
Afraid to Ask
Session 50
Karen L. Gill Visual Information Specialist Composition and PSD Section Publishing Division Media and Publications Internal Revenue Service
The Media and Publications organization within the Internal Revenue Service is
responsible for approximately 500 tax forms, 200 separate instructions, and 120 taxpayer information publications. There are also a variety of internal products and other public use products that may originate from other areas of the IRS organization, but get reviewed and published by the Media and Publications organization.
Tax forms are usually the result of legislation enacted by Congress, but their
development is a joint effort of many people and organizations. Congress may explicitly state in a bill what information needs to be on a form or other tax product. The White House, the Treasury Department, and other Government agencies may have information needs that the IRS has to incorporate into the design of the tax product. Various
segments of the IRS, like the Collection organization or the Electronic Tax
Administration, also have information needs that need to be incorporated. There are also external stakeholders that have input into the development of a tax form. There are employee suggestions, focus group studies, taxpayer letters, taxpayer groups, tax practitioner groups, software vendors, employer groups, and a variety of other special interest groups. Developing a tax form can be just like doing a jigsaw puzzle. All of the pieces must fit in their place.
How we got to this place…
Even before we became a nation, there were taxes. Indeed one of the main reasons the Revolutionary War was fought was because taxes had been imposed on the colonies and the colonists had no voice in Parliament to object to the taxes. “No taxation without representation” became a battle cry. Taxation has been a touchy subject ever since. The original Articles of Confederation did not include the power to levy taxes. The
Government would request donations from the States to finance operations. By the time of the Constitutional Convention in 1787, the founding fathers realized that there needed to be a better way to finance Government operations and pay back foreign debt. Article 1, Section 8, of the new U.S. Constitution gave Congress the authority to levy and collect taxes to pay debts and provide for the common defense.
In September of 1789, Tench Coxe assumed the duties of Assistant to the Secretary of Treasury. In 1792 the position was redesignated as Commissioner of Revenue. The Revenue Act of 1791 established an excise tax on distilled spirits and tobacco products. This led to the first assault on a Revenue Officer later that year, and ultimately to the famed Whiskey Rebellion of 1794. After that, the U.S. Government relied mainly on excise taxes, tariffs and other duties, lotteries, and land sales to fund governmental activities. Pennsylvania was the first state to enact an income tax in 1840.
The financial demands of the Civil War led to the first Federal income tax imposed on U.S. citizens. A year later the Bureau of Internal Revenue was established for the
collection of taxes. The income tax was intended to be a temporary revenue raising measure and was a progressive tax of 3 to 5% on incomes above $600. In its first year of operation, the Bureau of Internal Revenue collected $39.1 million, and there were 3,882
employees. The income tax expired in 1866 and revenue was once again raised by other means.
The economic demands of the Spanish American War caused Congress to re-examine the need for an income tax. A Constitutional Amendment was proposed, and in 1913 the 16th Amendment was added to the Constitution. This amendment allowed Congress to levy and collect income taxes imposed on individuals and corporations. Up until World War II, paying income taxes was a sign that you were a person of wealth and high social status. During and after World War II, Congress began to lower the threshold on income subject to taxation and by the late 1940s most citizens were paying an income tax. In 1943, the Current Tax Payment Act established a 20% withholding of taxes from paychecks and created the “pay as you go” system. In 1952, the Bureau of Internal Revenue was reorganized and became the Internal Revenue Service. That was also the first year that a tax package was created, a combination of forms and instructions sent out as a single mailing unit.
How tax law becomes a tax form
Ideas for tax legislation may be proposed by any Member of Congress, or it may be proposed by State legislatures or Executive Branch agencies. Citizens may also petition their representatives to initiate legislation. All bills for raising revenue originate in the House of Representatives, but the Senate may propose or concur with amendments. House and Senate committees help to shape the legislation. A bill that has been agreed to in identical form by both the House and Senate goes to the President for signature.
The Office of Chief Counsel within the IRS monitors all legislative developments and works with the Tax Law Specialists within the Tax Forms and Publications Division of the Media and Publications organization to interpret the legislation. There is usually one Tax Law Specialist (TLS) responsible for coordinating the activities surrounding the development of a tax form. The TLS reviews the pertinent legislation or part of the US Tax Code to determine what legally needs to be on the form. The Chief Counsel
organization is consulted to clear up any ambiguities with the law or the Internal Revenue Code. Internal and external stakeholders are also consulted to determine their
information needs.
The TLS will usually start the development process by getting a first draft of the form created by the Composition Specialists in the Publishing Division. The Composition Specialist will consult with a Printing Specialist who is responsible for the printing contracts to develop the form’s specifications. The Composition Specialist will apply typographic and forms design standards, and ensure that all publishing requirements are met, in addition to making the changes requested by the TLS. There may be several composition cycles of a form, and different versions may be created based on whether new legislation may be enacted.
The TLS will circulate drafts of the form among the various stakeholders within the IRS to ensure that all IRS functional needs have been met. A publicly released draft of the form is posted on the IRS web site so that taxpayer groups, tax practitioners, software vendors, etc., can comment on the form. There may also be focus group studies done, especially if it is a new form or the form has been redesigned. Various design teams may be established to look at a particular tax form. Feedback on the form may also come from taxpayer letters and employee suggestions. There is also a Tax Products
Coordinating Committee that meets to discuss the information collection and processing needs of the various IRS functions and how they will impact on the design of a form. Once the design has been approved by the TLS and his Reviewer, the TLS gives an Ok-to-Print Authorization to the Publishing Division. The Composition Specialists will create the press optimized PDFs for print vendors and fillable PDFs for posting to the IRS web site. These products get a final quality review and various Publishing and Distribution stakeholders are notified that the product is ready to distribute among the various publishing venues. A Tax Products CD-ROM is developed as well as Braille or large print versions of tax products and html versions of publications and instructions. The printed products are either produced by a print vendor or through our on-demand printing program.
The Distribution Division analyzes the various needs of taxpayers and determines the best methods of getting a tax product to a taxpayer. There is a National Distribution Center that fulfills orders for forms and other tax products, and also houses the on-demand printing program. Tax products are shipped to Post Offices and Libraries, as well as to Taxpayer Assistance sites.
Tax packages, various combinations of forms, instructions, and publications, are also mailed out to taxpayers and businesses. Most people are familiar with the 1040 tax package, but don’t realize that there are 10 different versions of that package. Which package a taxpayer receives is based on what they filed last year. Package 1040-1 is sent to individuals or couples who itemize deductions and may have some deductions or credits for things like child care. Taxpayers who have rental properties, self-employment income, other investment income, are farmers or fishermen, or live overseas, receive some of the other 1040 tax package configurations. There is a Package 1040-EZ for people with very simple tax situations, and two variations of Package 1040A. There are also tax packages for partnerships (Package 1065), corporations (Package 1120),
employers (Package 940), and other taxpayer groups.
How are tax products created
There are two main composition systems for creating tax products:
(1) There is an SGML composition system for creating instruction products and taxpayer information publications. The TLS edits the SGML (or XML) file and an SGML team of programmers supports them if they need assistance with coding. The composition engine is the Pager Composition System by Datalogics, and the
TLS uses the Arbortext Epic Editor to edit the SGML files. The TLS does not need to think about how the text will be formatted because that is all controlled by a DTD (document type definition) that identifies the various properties of each component of the document (heading, paragraph, bulleted list, etc.). Once the TLS has finished editing the file, they compose it and a PDF is generated for their review.
(2) Tax forms and other non-SGML products are created on the Tax Forms
Automated Composition System (TFACS). The main software used is OneForm Designer Plus by Amgraf, but other software packages are used to support the production of the final product. Composition Specialists lay out the design of the form and generate fillable PDFs. The Composition Specialist will also create graphics for SGML products, usually things that the TLS cannot easily code in SGML like formulas and tables or filled-in samples of tax forms.
What does the Future Hold
Every few years, someone will recommend a complete overhaul of the tax system. The most recent effort happened last year with the President’s Tax Panel. This Panel looked at ways to simply the tax code and reducing the taxpayer’s filing burden, while still trying to encourage some behaviors (e,g, saving, home buying, giving to charities, etc.). The Panel’s recommendations were published last Fall and immediately drew both criticism and praise from various special interest groups. Whether anything will come of the Panel’s work is up to Congress.
There has also been a call to go to some form of flat tax or value added tax. Both types of taxes would probably eliminate many of the tax forms that are needed to collect taxes, but would not do away with tax forms altogether.
One trend that has been ongoing over the past few years is that more taxpayers are filing electronically. This is causing print volumes to go down and fewer taxpayers are now receiving a tax package in the mail. The IRS has not yet reached the goal of 80% of the returns filed electronically, but we are getting close. More taxpayers are also getting their forms from the internet and mailing them in rather than getting them from their local library or Post Office. The Distribution Division is constantly looking at the different methods taxpayers are using to get the forms and revamping their distribution programs. Just within the past year, the Distribution Division eliminated the Tax Fax program. The TeleFile program was also eliminated as a way for taxpayers to file their taxes. Both Tax Fax and TeleFile were expensive programs to develop and maintain, and both were seeing fewer taxpayers using that method each year.
Some of the initiatives that the Publishing Division will be looking at in the next year or so include XML versions of tax forms for the Electronic Tax Administration’s e-file programs. We are also creating fillable PDFs of forms with 2-D barcodes so the data on the form can be easily extracted if the taxpayer mails or faxes the form to the IRS. The Composition Specialists are also trying to incorporate Section 508 accessibility features
in the source files of tax forms so that when a tax form goes ok-to-print it is fully accessible and fillable. This will eliminate some of the post processing that is done to PDFs and reduce the time it takes to post a tax form to the IRS web site. This also eliminates duplication of work if for some reason the form needs to be reissued.
Challenges
The past several years have seen Congress pass late tax legislation about the same time the tax forms would be going ok-to-print. The normal development cycle of a tax form starts in January or February and the individual tax forms will usually go ok-to-print in October followed by the business tax products in November. This ensures that the form is fully developed and reviewed by all stakeholders, and that print vendors can produce the forms, instructions, and publications in time for the filing season to start on January 1. The 2005 tax product production season was particularly difficult because there was late tax legislation due to Hurricane Katrina and the storms that followed it. Congress passed the last piece of Hurricane Katrina related tax legislation the week before Christmas. Several new forms were created, including a jobs credit form for employers affected by Hurricane Katrina, and almost all of the tax forms were affected by the legislation in one way or another. Needless to say, the Fall production season for tax products can be very stressful.
Other challenges include keeping up with the changing technical demands of the Publishing industry and educating ourselves and our customers. Computer skills are a valuable commodity. Design skills, attention to detail, diplomacy, etc., are all needed in order to get these forms developed. There are a lot of people who have their fingers in the development of most of the tax forms. Juggling the needs of the various IRS
functions and other stakeholders can result in some difficult designs. Indeed, you need to like doing jigsaw puzzles to keep all of the pieces together.
