TAX LAW SPECIAL REPORT
January 2010
BREAKING NEWS JUST IN TIME FOR TAX
SEASON: THE TAX CODE IS COMPLEX
By Nathan Hannah
The task of preparing an individual federal income tax return is burdensome enough that even the boss of the IRS, Commissioner Douglas Shulman, hires a tax preparer to prepare his return. He says that he finds the tax code “complex.” That news, coming on the heels of the recent release of the National Taxpayer Advocate’s 2009 Report to Congress with its pointed criticism of the IRS’ performance, is just what taxpayers needed to get in the mood for tax season.
Here are a few highlights just from the preface of the Advocate’s Report (in the Advocate’s own words):
The IRS does not adequately or accurately track the source of collection payments, so it has no empirical basis upon which to formulate collection policies. The IRS simply does not know with statistical accuracy what collection actions – if any – result in additional tax collection revenue for the government.
In several prior reports, I have designated the complexity of the tax code as the most serious problem facing taxpayers and the IRS alike. The need for tax simplification is not highlighted as a separate discussion in this year’s report to avoid repetition, but the omission of a detailed discussion in no way suggests the lessening of its importance.
As I see it, the IRS is subject to three diverging forces – increased responsibility for non-core tax administration duties, increasing demand for taxpayer service (including telephone assistance) and declining resources for that demand, and collection policies that mask a laissez faire attitude to taxpayer harm under the guise of “efficiency.”
So, the complexity of the tax code is the single biggest problem for both taxpayers and the IRS, the IRS doesn’t know what it could do to improve its performance, and the IRS doesn’t care about serving you, the taxpayer. Other than those little problems, everything’s just great, eh? Have fun preparing your tax return!
Oh wait, I forgot, only about one in five of us is brave enough, or demented enough, to do it themselves (this includes yours truly). Anyway, happy tax season!
QUOTE OF THE MONTH
The mystery of government is not how Washington works but how to make it stop.
P. J. O'Rourke
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