IRS Commish Wants Simpler Tax Code

IRS Commish Wants Simpler Tax Code

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IRS Commissioner Doug Shulman has come out for tax simplification:

Most taxpayers want simplicity. They want to pay what they owe, understand what tax benefits they are entitled to, and not get tripped up by the system. However, today’s Tax Code is anything but simple. It is so complex that it makes it hard for taxpayers to plan and make out an annual budget as there can be unpredictable tax bill swings from year to year.

One year you might be eligible to claim a tax credit reducing what you owe. But the following year, the tax credit will expire, or there may be a change in your personal situation that will knock you out of the eligibility box.

But maybe Shulman has an subconscious reason to stump for simplification:

Perhaps the most telling indicator of taxpayer confusion over the code’s complexity is that today, 90 percent of individual taxpayers pay for professional tax preparation or tax software to prepare their tax returns.

In the last two years, the Commissioner has proposed and/or implemented the following:

  • Testing, registering and fingerprinting tax preparers;
  • Creating an IRS tax preparation software system;
  • Increasing the due diligence duties of tax preparers; and
  • Increasing tax preparer penalties

In short, Commissioner Shulman has declared war on tax practitioners.

Why? Because if he can limit the involvement of outside tax professionals in the tax compliance process, the IRS will have more power to determine the accuracy of tax returns and the efficacy of tax reduction plans.

Everything this Commissioner has done has been designed to shift power from the tax preparation and advice industry to the IRS. And if you think he’s doing it because he cares about taxpayers, I have a nice oceanfront home in Iowa I want to sell you.

About Peter Pappas

Peter is a tax attorney and certified public acccountant with over 20 years experience helping taxpayers resolve their IRS and state tax problems.

He has represented thousands of taxpayers who have been experiencing difficulty dealing with the Internal Revenue Service or State tax officials.

He is a member of the American Association of Attorney-Certified Public Accountants, the Florida Bar Association and The Florida Institute of Certified Public Accountants and is admitted to practice before the United States Tax Court, the United States Supreme Court, U.S. District Courts - Middle District of Florida