-Just FYI

alledan

WASHINGTON (Reuters) - Treasury Secretary Paul O'Neill has declared the complex U.S. income tax code an "abomination." If the confusion surrounding a single line on tax return forms this year is any indication, he's not likely to change that opinion soon.The line that has already generated numerous headaches for the Internal Revenue Service and taxpayers has now moved on to become the center of a spat between the Treasury Department and a newspaper columnist.Late Friday, Treasury spokeswoman Michele Davis issued a tartly worded news release rebutting assertions by New York Times columnist Paul Krugman that line 47 on this year's Form 1040 tax returns -- which the IRS says is meant to provide a tax credit -- would result in a bigger tax bite.In his column, Krugman, a noted Princeton University economist, warned taxpayers that "they will discover that they owe $300 more in taxes than they expected" when they fill out their returns.The IRS says the line is a place for taxpayers who did not get the full benefit of last summer's advance tax rebates to claim a tax credit. Taxpayers who got the full rebates, $300 for individuals and $600 for a married couple filing jointly, are told to leave the line blank."Contrary to the column's assertion, last summer's checks did not reduce refunds or increase tax bills," Davis said in the release headlined "Line 47 exists to give more money back to taxpayers" and "Krugman got it backwards in today's New York Times."The line in question is Line 47 of IRS Form 1040, which parades as line 30 of Form 1040A and line 7 of Form 1040EZ. Earlier this month, the IRS said it had already seen more than 1 million erroneous returns filed because of the line and said the errors could delay refunds by a week or more.On Form 1040, line 47 is in the tax and credits section, nestled between line 46, "Education credits. Attach Form 8863," and line 48, "Child tax credit (see page 37)." It reads: "Rate reduction credit. See the worksheet on page 36."