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We need a less complex federal tax code

Lyon County Reporter of Rock Rapids, Iowa

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In the Public Interest

The U.S. Income tax was passed by Congress and signed into law by President Woodrow Wilson in 1913. However, the federal income tax has become vastly more complex since 1913.

The mission statement of the Taxpayer Advocate Service (TAS) states, "As an independent organization within the IRS, we help taxpayers resolve problems with the IRS and recommend changes that will prevent the problems." Nina E. Olson, the National Taxpayer Advocate provides an annual report to Congress, and in her 2012 report, stated, "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."

As Scott Hodge of Tax Foundation discussed on a recent Fox Business report on tax complexity, those six billion hours that are spent to comply with the tax code and file federal income tax returns equals the equivalent of three million individuals working full time for one year doing nothing but tax returns. In other words, it would take every single person in Iowa, which has a population of just over three million, working full time all year to file the federal tax returns for everyone in the United States.

National Taxpayer Advocate Olson states that the "most serious problem" of the tax code is its complexity. She continues, "To inspire confidence and trust, the tax laws should be comprehensible and the computations of tax should be transparent and relatively simple, yet few taxpayers today can confidently say they understand the tax code or even that they have correctly computed their tax liabilities."

Congress and the President need to stop using the tax code to promote public policy and start working together to make the tax code less complex and easier to comply with for Iowa's and America's taxpayers.

The views expressed in this column are those of the author and not necessarily those of the Public Interest Institute. They are brought to you in the interest of a better informed citizenry.

Amy K. Frantz, Vice President, Public Interest Institute, 600 North Jackson Street, Mount Pleasant, I A 52641-1328. Ph: 319-385-3462. Website:

E-mail: Public.lnterest.

Copyright 2014 Lyon County Reporter, Rock Rapids, Iowa. All Rights Reserved. This content, including derivations, may not be stored or distributed in any manner, disseminated, published, broadcast, rewritten or reproduced without express, written consent from SmallTownPapers, Inc.

Original Publication Date: January 1, 2014

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