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Tax Reform Unlikely Until Congress Helps IRS

Tax Reform Unlikely Until Congress Helps IRS

(Dollar Photo Club)

By    |   Sunday, 15 January 2017 09:22 PM


Everything the government does is tied one way or another to the tax system. The money that the government collects, or may collect, pays for everything the government does.

Tax represents the lifeblood of the government and the fundamental source of all political power.

There is nobody who seriously doubts that the federal government should tax. What is in question however, is how the federal government should take money from the private sector to fund the perceived needs of the public sector?

The government raises a lot of money in a system that comes at a tremendous cost.

The National Taxpayer Advocate says that the first and most obvious need for the government is to meet the challenges of the 21st century is tax reform.

The first legislative recommendation, Simplify the Internal Revenue Code, the Taxpayer Advocate describes the burdens “the current, hideously complex Code imposes on taxpayers and the IRS alike.”

Effectively, the entire system winds up alienating the taxpayers. They don’t trust the system in which they are forced to interact.

The Taxpayer Advocate makes solid recommendations which if put in place would help significantly.

But given the political realities of Congress, it is impossible for the IRS to make any of these changes on its own.

The Taxpayer Advocate thinks that increased funding and “additional” Congressional IRS oversight of the IRS’ strategic and operational plans -- if enacted -- would be able to fairly, effectively, and efficiently administer the tax system.

This Congress is not going to fund the IRS any significant increase. And, the very idea of Congressional oversight of anything except for political grandstanding is quite ridiculous.

With a tax code that is incomprehensible even among tax experts, takes billions of hours of taxpayer time to comply, and is the primary vehicle for political cronyism, there is not a chance that IRS officials can do much more than they are doing already.

Let’s face it. When a tax system must constantly update a "Taxpayer’s Bill of Rights" to protect the taxpayers from governmental abuse, then the system itself is inherently a bad one.

If history is any guide, the tax-writing committees in Congress and the tax policy gurus of the administration will ignore the Taxpayer Advocate’s report. They will proceed with their usual political posturing and superficial legislative proposals.

There will be some sort of bi-partisan tax bill which will keep in place what the Taxpayer Advocate described as a “hideously complex code” that victimizes both the taxpayers and the IRS.

Any hope of meaningful tax reform has a dark future. 

Denis Kleinfeld is known as a strategic tax and wealth protection lawyer, widely published author and creative teacher.  

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Any hope of meaningful tax reform has a dark future, Newsmax Finance Insider Denis Kleinfeld warns.
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2017-22-15
Sunday, 15 January 2017 09:22 PM
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