26 U.S.C. § 6050E — State and local income tax refunds

(a) Requirement of reporting. Suppose someone pays a person $10 or more in state or local income tax refunds during a calendar year. This includes tax credits or offsets. In that case, the payer must file a return with the Secretary. That return must state the total amount paid, credited, or offset. It must also give the name and address of the individual who received it. (b) Statements to be furnished to individuals with respect to whom information is required. Anyone who must file that return also has to send a written statement to each individual named in it. The statement must show the state or local government's name. It must also show the same refund information reported to the Secretary. It must be sent to the individual during January of the year after the refund year. No statement is required for someone who, under regulations, did not itemize deductions for the tax year that produced the refund. (c) Person defined. For this section, "person" means the officer or employee who controls paying out the refunds, credits, or offsets. It can also mean whoever else is designated for this purpose.

The record. According to the source credit, this section was added to the Internal Revenue Code by Public Law 97-248, title III, § 313(a), enacted September 3, 1982, and published at 96 Stat. 603. The credit indicates the section has since been amended twice: by Public Law 98-369, division A, title I, § 151(a), July 18, 1984, and by Public Law 99-514, title XV, § 1501(c)(8), October 22, 1986. These amendments suggest ongoing legislative refinement of the reporting requirements over the following four years, though the source credit does not detail the substance of each change. Historical context. Public Law 97-248 is commonly known as the Tax Equity and Fiscal Responsibility Act of 1982 (TEFRA). TEFRA is generally understood to have been enacted amid concerns over federal revenue shortfalls and a desire to improve tax compliance, and it included a range of provisions expanding information-reporting requirements to reduce the "tax gap"—the difference between taxes owed and taxes actually collected. Information-reporting provisions of this kind are typically associated with efforts to give the Internal Revenue Service better means of verifying income and deductions claimed by taxpayers, in this instance state and local tax refunds that may affect the itemized deduction computation. Public Law 99-514, cited in the amendment history, is the Tax Reform Act of 1986, a major overhaul of the federal tax code; its amendment here likely reflects conforming or technical changes tied to that broader reform. The specific legislative purpose behind each individual amendment, however, is not established by the record supplied here.