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Complexity is Root of All Evil , At Least in Tax Code

Nina Olson, National Taxpayer Advocate, has an op-ed in the Wall Street Journal today (behind WSJ paywall). She argues that "as Congress takes up reform, it should consider radically simplifying the rules for individuals."

She opens the op-ed, writing:

"As the national taxpayer advocate, I oversee an independent unit within the Internal Revenue Service that has helped more than four million individual and business taxpayers resolve their IRS account problems, and I am required to report to Congress annually on the most serious problems encountered by U.S. taxpayers.

"If I had to distill everything I’ve learned into one sentence, it would be this: The root of all evil is the complexity of the tax code. (emphasis added)

"There is currently considerable support in Congress to take up corporate tax reform, and corporate reform is certainly needed. But I urge policy makers to remember that, as compared with about two million taxable corporations, there are 151 million individual taxpayers, including 27 million who report sole-proprietor or farm business income with their individual returns. There are also nearly nine million pass-through entities (S corporations and partnerships), the income from which is reported on individual income-tax returns. These taxpayers desperately need relief from the extraordinary compliance burdens the tax code imposes.

"I have long believed comprehensive tax simplification is achievable by following the model of the landmark Tax Reform Act of 1986 . . . ."

She also makes six core principles, starting by not making the tax code so complex that it creates traps for the unwary, or simple enough so that "most taxpayers can prepare their own returns . . . on a single form."

Olson concludes with the following advice:

"Streamline the penalty regime. In 1955, there were 14 civil penalties in the tax code. Today, there are more than 170, many of which are rarely assessed.

"U.S. taxpayers have been struggling under the weight of the current tax code for far too long. The Bush and Obama administrations both produced reports with many good simplification proposals, as have the House Ways and Means and Senate Finance committees and others. There is no shortage of good ideas. Now is the time for the administration and Congress to seize the moment and finally, this year, carry tax reform across the goal line."

Last Friday, we growled about the tax burden that results from tax complexity, citing the 2017 report of National Taxpayers Union Foundation (NTUF).

You can access the Internal Revenue Service's Taxpayer Advocacy Service (TAS) by clicking here. In addition, four separate reports are archived:

  • Objectives Reports, which contains TAS's goals and activities.
  • Annual Reports to Congress.
  • Annual Report to Congress Report Cards, which provides IRS's response to each recommendation.
  • Congressional District Statistics.

While the burden of preparing your tax return is still fresh in your mind, Growls readers are urged to take a few minutes to tell your representatives in Congress that tax reform needs a hefty dose of tax simplification. Contact information is available at the Library of Congress' Congress.gov. Taxpayers living in Virginia's Arlington County can contact:

  • Senator Mark Warner (D) -- write to him or call (202) 224-2023
  • Senator Tim Kaine (D) -- write to him or call (202) 224-4024
  • Representative Don Beyer (D) -- write to him or call (202) 225-4376

Ask for a written response. And tell them ACTA sent you.

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