This is the accessible text file for GAO report number GAO-02-638R entitled 'Income Ranges of Taxpayers Who May Have Overpaid Federal Taxes by Not Itemizing' which was released on April 11, 2002. This text file was formatted by the U.S. General Accounting Office (GAO) to be accessible to users with visual impairments, as part of a longer term project to improve GAO products' accessibility. Every attempt has been made to maintain the structural and data integrity of the original printed product. Accessibility features, such as text descriptions of tables, consecutively numbered footnotes placed at the end of the file, and the text of agency comment letters, are provided but may not exactly duplicate the presentation or format of the printed version. The portable document format (PDF) file is an exact electronic replica of the printed version. We welcome your feedback. Please E-mail your comments regarding the contents or accessibility features of this document to Webmaster@gao.gov. This is a work of the U.S. government and is not subject to copyright protection in the United States. It may be reproduced and distributed in its entirety without further permission from GAO. Because this work may contain copyrighted images or other material, permission from the copyright holder may be necessary if you wish to reproduce this material separately. GAO-02-638R: United States General Accounting Office: Washington, DC 20548: April 11, 2002 The Honorable Dick Armey: Majority Leader: House of Representatives: Subject: Income Ranges of Taxpayers Who May Have Overpaid Federal Taxes by Not Itemizing: Dear Mr. Armey: As was discussed with your staff, this letter provides some information on the income ranges of taxpayers who may have overpaid federal taxes by not itemizing. This information relates to our March 29, 2002, report Tax Deductions: Further Estimates of Taxpayers Who May Have Overpaid Federal Taxes by Not Itemizing (GAO-02-509) and was developed in accordance with generally accepted government auditing standards. As shown in table 1, we estimate that of the returns filed for tax year 1998 by taxpayers who may have overpaid federal taxes by not itemizing, 53 percent showed adjusted gross incomes of $50,000 or less. Eleven percent of the returns showed adjusted gross incomes of more than $75,000. Table 1: Distribution of Returns, by Adjusted Gross Income, on Which Taxpayers May Have Overpaid Taxes because Itemizable Deductions May Have Exceeded the Standard Deduction, Tax Year 1998 Returns on which mortgage interest and points and state and local income tax plus imputed charitable contributions, real estate and personal property taxes exceeded the standard deduction: Adjusted gross income range: Less than or equal to $25,000; Estimated returns: 288,000; 95% confidence interval: 198,000-401,000; Percentage of returns: 13%. Adjusted gross income range: $25,001–$50,000; Estimated returns: 853,000; 95% confidence interval: 588,000–1,177,000; Percentage of returns: 40%. Adjusted gross income range: $50,001–$75,000; Estimated returns: 774,000; 95% confidence interval: 456,000–1,140,000; Percentage of returns: 36%. Adjusted gross income range: $75,001–$100,000; Estimated returns: 179,000; 95% confidence interval: 119,000–257,000; Percentage of returns: 8%. Adjusted gross income range: Greater than $100,000; Estimated returns: 62,000; 95% confidence interval: 37,000–98,000; Percentage of returns: 3%. Total: Estimated returns: 2,157,000; 95% confidence interval: 1,60,0002–2,838,000; Percentage of returns: 100%. Note: Totals may not sum because of rounding. Source: GAO analysis of Statistics of Income and other IRS data and Department of Labor consumer expenditure survey data. [End of table] The median adjusted gross income for these returns was about $47,000 (with a 95 percent confidence interval of $35,000 to $58,000). The median adjusted gross income for all returns in tax year 1998 was about $27,000. We are sending copies of this letter to Representative William Thomas, chairman, and Representative Charles B. Rangel, ranking minority member, House Committee on Ways and Means; Senator Max Baucus, chairman, and Senator Charles E. Grassley, ranking member, Senate Finance Committee; Representative Amo Houghton, chairman, and Representative William J. Coyne, ranking minority member, Subcommittee on Oversight, House Committee on Ways and Means; and the Honorable Charles O. Rossotti, commissioner of internal revenue. We will make copies available to others on request. This letter will also be available on GAO’s home page at [hyperlink, http://www.gao.gov]. If you have any questions, please contact me on (202) 512-9110 or Assistant Director Ralph Block on (415) 904-2150. Sincerely yours, Signed by: James R. White: Director, Tax Issues: [End of document]