“Duh”-Congress Finds The Tax Code Complex
Essex & Associates::www.essexinc.biz August 2, 2011
I can't believe we pay our taxes for the government to come up with these obvious conclusions.
The study, by the Government Accountability Office, noted that the GAO has documented millions of taxpayer errors in following the complex rules of the tax code.
These complex rules also impose a wide range of recordkeeping, planning, computational, and filing requirements upon businesses and individuals. Complying with these requirements costs taxpayers time and money, the GAO noted.
Taxpayers underclaim benefits to which they are entitled. According to GAO's past analysis, of tax filers who appeared to be eligible for a higher-education tax credit or tuition deduction in a recent year, about 19 percent, representing about 412,000 returns, failed to claim any of them.
"The Tax Code has grown far too complex, and it's becoming much too difficult for honest Americans to calculate and pay their tax bill," said Senate Finance Committee Chairman Max Baucus, D-Mont. "
At the hearing, Baucus discussed the problems caused by the Tax Code's increasing complexity. According to the IRS, he noted, taxpayers and businesses spend more than six billion hours each year complying with their tax responsibilities. And the Taxpayer Advocate added that if those six billion hours were dedicated to a given industry, it would be one of the largest in the U.S., and it would employ more than three million full-time employees.
"Year after year, the Tax Code becomes more complex," said Sen. Orrin Hatch, R-Utah, the ranking Republican member of the committee. "This has contributed to two separate, but related, problems. First, the complexity of the code undercuts compliance. Complying with the Tax Code should not be a Choose Your Own Adventure story, where the complexity of the code leaves citizens, and the IRS, guessing their tax liability.
The tax code will be complex no matter how much "simplification legislation" is used. The tax code is a combination of law, interpretations, revenue rulings, revenue procedures, and court decisions. Another synonym of code is law.
Attorneys, CPAs and EAs have special knowledge of the tax code and procedures. All of these professionals are allowed to practice (a form of "administrative law") before the Internal Revenue Service. Each of these professionals are extensively trained, tested and monitored. The average self-prepared preparer (the public) cannot expect any legislation or simplification to improve this situation.
Wishing you many happy returns,
Wayne T. Essex Ph.D.
Essex & Associates
Tax, Accounting, HR, Payroll
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