Taxpayer Advocate Says Tax Code is “Unconscionable Burden,” Suggests Junking the AMT

bdc7nina olsen Taxpayer Advocate Says Tax Code is “Unconscionable Burden,” Suggests Junking the AMT

If there’s one word that appears over and over in
National Taxpayer Advocate Nina Olsen’s 2012 Annual
Report to Congress, it’s “burden” and variations thereof. A
quick search found 25 repetitions of “burden,” “burdens” or
“burdensome” just in the
executive summary (PDF), not counting the table of contents
(it’s a long executive summary). Notably, she says in the
chapter on the complexity of the tax code (PDF), “the existing
tax code inflicts significant, even unconscionable, burden on
taxpayers, and Congress could alleviate much of that burden by
vastly simplifying the tax code.”Welcome to our world, Nina. But tell us, just how burdensome is
the tax code?
An analysis of IRS data by the Office of the Taxpayer Advocate
shows it takes U.S. taxpayers (both individuals and businesses)
more than 6.1 billion hours to complete filings required by a tax
code that contains almost four million words and that, on average,
has more than one new provision added to it daily. Indeed, few
taxpayers complete their returns without assistance. Nearly 60
percent of taxpayers hire paid preparers and another 30 percent
rely on commercial software to prepare their returns.
The report offers an interesting assessment of the Alternative
Minimum Tax, too, that addendum to the tax code intended to make
sure that everybody their fair share of the cost of running our
oh-so-wonderful federal government.
The AMT was originally enacted to ensure that the wealthiest
U.S. taxpayers pay at least some tax each year by adding back into
income certain tax benefits known as “tax preferences.” Yet in
2008, 87 percent of all tax preferences that gave rise to AMT
liabilities was attributable to the disallowance of personal
exemptions and the deduction for state and local taxes. Only under
the unique logic of the AMT are the acts of having a large family
and living in a high-tax state viewed as a tax dodge.
The report calls for the AMT to be repealed.Less praiseworthy is Olsen and company’s insistence that the
Internal Revenue Service suffers “significant and persistent
underfunding,” and that its budget should be hiked and then
separated from the rest of the federal budget to shield it from
cuts. Given the IRS’s history of
enforcing stupid rules in
incredibly abusive ways, the idea of giving the agency more
resources with which to send its licensed muggers prowling the
highays and byways seeking out victims sends a bit of a chill down
the old spine.Thanks for recognizing the “burdensome” complexity of the tax
code and the utter foolishness of the rules enforced by the IRS,
Nina. Under the circumstances, I hope you’ll forgive us if we
hesitate to sign on to your proposal to further empower tax

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Taxpayer Advocate Says Tax Code is “Unconscionable Burden,” Suggests Junking the AMT

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