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Jan 14

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IRS report provides candid assessment of major problems

Nina E. Olson is the current head of the U.S. Taxpayer Advocate.  This is a government office dedicated to helping taxpayers solve their problems with the Internal Revenue Service (IRS).  On January 5, 2011, she issued her required annual report to Congress. 

The report is exceptionally long.  We summarize the major components and themes in this article.  But for purposes of this post, the Taxpayer Advocate also describes (i) the overwhelming complexity of the tax code, and (ii) why this complexity is a major problem in terms of both wasted effort and fairness.  Her observations in many respects mirror this site’s January 4, 2011 post on consolidating the tax code and setting tax rates

But the IRS Advocate also takes to task all of us for causing and keeping the problem.  Here are two related quotes:

 But if we all agree that tax reform is necessary, why hasn’t it happened?  Well, our answer to this question is that we are all unwilling to acknowledge the strong vested interests each of us has in the current structure.  Tax complexity doesn’t occur just because of “big money” special interests.  It occurs because of the tax provisions that benefit each one of us.  We are the special interests. And until we acknowledge that, tax reform discussions will deteriorate into shouting matches and finger pointing about cutting “their” special tax breaks and not “ours.”…

 There is a widespread belief that the influence of “special interests” is the biggest roadblock to comprehensive tax reform. There is no doubt that many provisions in the tax code benefit narrow groups of taxpayers, including several described above. But the dirty little secret is that the largest special interests are us – the vast majority of U.S. taxpayers.”

About the author

David Nolte

I am a founding principal of Fulcrum Inquiry, an accounting and economic consulting firm that performs damage analysis for commercial litigation, forensic accountings, financial investigations, and business valuations. I am a Certified Public Accountant (CPA) and an Accredited Senior Appraiser (ASA), as well as having other professional credentials. I regularly serve as an expert witness involving damages measurement. My litigation-oriented resume is on Fulcrum's website.

Permanent link to this article: http://betweenthenumbers.net/2011/01/irs-report-provides-candid-assessment-of-major-problems-2/

2 comments

  1. Beastly

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  2. Watch Beastly

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