This testimony makes three main points about overstated deductions for
real estate tax payments. First, for the most part individual taxpayers
overstated their deductions for real estate tax payments by including
nondeductible payments, such as user fees. Second, confusion over which
payments were and were not deductible real estate taxes contributed to
taxpayer noncompliance. Third, the Internal Revenue Service can improve
compliance by simplifying tax documents and by redirecting its
enforcement efforts and cooperating with state and local officials.