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 Olson'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The AMT was originally enacted to ensure that the wealthiest U.S. taxpayers pay at least some tax each year by adding back into income certain tax benefits known as “tax preferences.”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The report calls for the AMT to be repealed.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 Olson 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 highways 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 collectors.

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  • ||

    Like our rulers are going to make the tax code less burdensome, less unfair, less thievy?

    I swear the retards are driving the short bus. We'd get better results handing complete control of the fedgov to Skinny P., Combo, and Badger.

  • Tman||

    Semi-related (but from the same TA report)- the IRS is very busy lately dealing with the fact that they've received over 650,000 false IRS returns that are the result of Identity Theft.

    From the TA report-

    TAX-RELATED IDENTITY THEFT
    The number of tax-related identity theft incidents has increased substantially in recent years. Within TAS, identity theft case receipts increased by more than 650 percent from FY 2008 to FY 2012. At the end of FY 2012, the IRS had almost 650,000 identity-theft cases in its inventory servicewide. The problem has grown worse as organized criminal actors have found ways to steal the Social Security numbers (SSNs) of taxpayers, file tax returns using those taxpayers’ names and SSNs, and obtain fraudulent tax refunds. Then, when the real taxpayer files a return claiming the refund, that return is rejected. The impact on victims is significant. More than 75 percent of taxpayers filing returns are due refunds, which average some $3,000 and are not paid until the IRS fully resolves a case.

    It is estimated that the IRS will send out close to $2 billion in fraudulent tax refunds. This year alone they sent over 2100 individual tax refund checks (all for different people, all in the range of $1500 each) to a single house in Lansing Michigan.

    I'm sure that once Obamacare kicks in they'll have all this mess figured out though.

    No sweat.

  • T o n y||

    Complain about a government agency's dysfunction. Check. Laugh off the idea of providing that agency with any more resources to to its job. Check. Continue complaining. The libertarian feedback loop.

  • Rhywun||

    Completely miss the point. Check.

  • iggy||

    HAHAHAHA. Seriously? You're the worst troll ever Tony. Sure, we could just decrease the burden of a labyrinthine tax code, in which case the IRS would be able to deal with a simpler tax code without having large budget increases.

    Unfortunately, that wouldn't allow for an increase of government power and wouldn't allow for more spending, so clearly it's just those damned libertarians complaining again!

  • Bill||

    Completely indifferent to suffering of large families in high tax states who now have to pay extra federal taxes. Check

  • Jordan||

    Completely screw up whatever it was you were attempting to do? Check. Double down on your stupidity instead of undoing what you did previously? Check. Continue using the unintended consequences of your previous actions as evidence that you need more power and more funding? Check. The derpgressive feedback loop.

  • scooby509||

    Haha, love "derpgressive."

  • Brandon||

    Tony, this is ridiculously stupid even for you.

  • ||

    How dare you sell TONY short like that!

    You know in your heart there is NO limit to his stupidity.

  • Death Rock and Skull||

    You're not going to respond, are you Just going to go post something else stupid in another thread?

  • T o n y||

    Maybe in order to streamline the tax collecting agency in this country, it takes more resources. Maybe not, maybe IRS employees are just inherently incompetent.

    That claim seems a bit more far-fetched than the argument that the IRS lacks the resources to make itself work better, but whatever floats your boat. It's no mystery to me that you're merely anti-IRS ideologues who think it works best when it's dead, and are so mendacious as to pretend that you don't cheer on its every inefficiency and failure, which you proceed to gleefully complain about.

  • iggy||

    Nothing here had anything to do with the competence of IRS employees. The American PEOPLE spend 6.1 billion hours on tax compliance.

    I'm a bit confused as to how more IRS spending will somehow decrease the amount of time an American citizen who doesn't work for the IRS would spend on his taxes.

    Clearly when a government program is hugely inefficient and isn't working, the solution should always be more money. It's worked splendidly for our schools.

  • Sevo||

    iggy| 1.9.13 @ 9:05PM |#
    ..."Clearly when a government program is hugely inefficient and isn't working, the solution should always be more money. It's worked splendidly for our schools."

    You're presuming some minimal level of intelligence to understand the sarcasm in your post.
    I have to point out that you're responding to shithead; one of the lefty idiots famous for, oh, missing the point and just generally setting the intelligence bar at truly low levels.

  • Drake||

    So you are saying our federal government is currently starved for resources? Seriously?

    The IRS has 106,000 employees and a budget of $12.633 billion.

    Exactly what would be adequate resources?

    http://en.wikipedia.org/wiki/I.....ue_Service

  • T o n y||

    I don't know. Do you?

  • ||

    Yes.

    Zero.

  • Rasilio||

    I can make a pretty good guess.

    Probably somewhere around 10,000 employees and about 2 billion in funding.

    Course you'd have to completely outsource the entire function and strip away the bureaucratic entrenched BS and let it function like a private for profit IT company

  • johnl||

    Enough staff to occupy a moderately sized ME country.

  • General Butt Naked||

    Maybe in order to streamline the tax collecting agency in this country, it takes more resources. Maybe not, maybe IRS employees are just inherently incompetent.

    And Tony doesn't know what "streamlined" means...

  • Sevo||

    T o n y| 1.9.13 @ 7:34PM |#
    "Post lefty lies, misdirection, innuendo, Check. Laugh off the idea of admitting dishonesty Check. Continue complaining. The shithead lefty feedback loop."

    Yep, shithead, you never fail to underwhelm.

  • MJGreen||

    Who would complain about a dysfunctional IRS?

  • Ted S.||

    Hitler?

  • StackOfCoins||

    Imagine, a tax code that could fit on one side of a letter-sized piece of paper.

    I can dream.

  • A Serious Man||

    Imagine a world without hypothetical situations.

  • iggy||

    The Laffer center did an analysis where they checked how much tax compliance costs America. They estimated that between businesses and individuals, the six billion hours spent complying with the tax code cost us 377.9 billion dollars.

    Considering that this is almost $400 billion of total dead weight loss, I'm not entirely sure how anyone can come down in favor of our current system.

  • World's Oldest Fraggle||

    I think you mean 400 billion in economic stimulus which worth 10 times that with the multiplier.

    /krugnuts

  • Brandon||

    Tony did. Right above you. And implied that the IRS needs more money.

  • Certified Public Asskicker||

    I tried to quickly scroll away from his comment, but I still saw it.

    He seems to out troll himself here. Even Shrike acknowledges the merits of a simpler tax code.

  • ||

    hey estimated that between businesses and individuals, the six billion hours spent complying with the tax code cost us 377.9 billion dollars.

    We can't find anything to cut. All government is essential.

  • Drake||

    Imagine an IRS code that could fit into your average living room.

  • The Late P Brooks||

    the existing tax code inflicts significant, even unconscionable, burden on taxpayers

    Mission Accomplished!

    By the way, Nina, if the tax code were simplified and made more rational, your "chronic underfunding" problem would disappear.

  • iggy||

    We could cut IRS funding in half if we just had flat taxes. An audit would go like this:

    'Did he pay his 21% tax rate?'
    'Yes.'
    'Let's go grab some lunch.'

    I honestly don't know why we don't just have a flat tax around 20% and just stick a floor on it so the first $25,000 of income is untaxed. The amount of time and money people would save would pretty much make up for the loss of government revenue.

  • wareagle||

    I honestly don't know why we don't just have a flat tax around 20%

    because the federal tax code is the single greatest source of power in DC. Every single deduction, credit, and subsidy - be it for business use or personal - is designed to buy someone's vote, often a lot of votes. A flat tax ruins that.

  • ||

    bingo.

    it's as much about power as it is about income.

  • Brandon||

    Fuck your 20%.

  • Death Rock and Skull||

    Fuck that minimum taxable amount, too.

  • ||

    Minimum taxable amount? That's not at all what he suggested.

    The $25k proposed as the standard deduction, not some sort of cap.

  • Death Rock and Skull||

    That's what I meant. That amount of money you can make before you start getting taxed. Fuck that thing.

    Absolute flat tax, no deductions, no credits, no games.

  • ||

    How about an equal dollar amount for every man, woman and child? Everyone pays the same amount for equal services.

    Truly "fair" and has the added benefit of keeping government small as raising taxes would most impact the poor.

  • C. Anacreon||

    B-b-b-b-but that would be regressive!!

  • Marshall Gill||

    How about an equal dollar amount for every man, woman and child?

    Kind of a one man, one vote, one tax thingy? I like.

  • Rasilio||

    I like funding the government through the ballot box.

    Specifically, when you show up to the election place you purchase your ballot for each race you wish to vote in. 2% of the purchase price goes to fund the electoral process itself, the remainder is directed to the government agency the election is for.

    However the ballots prices are set on a logarithmic scale.

    The first ballot in each election is $1, the second is $10, the third is $100, the 7th is $1,000,000 and so on. So if you want to cast 7 each votes for President, Senator, Representative and Govenor well that costs you $31,111,108. Two votes for each would cost $44.

    Whatever money is collected is what the government has for a budget until the next election.

  • scooby509||

    Kinda like the current system, except you don't need fake names and to log as many miles driving, then?

  • Paul.||

    Taxpayer Advocate says [something against the tax system]... Government doesn't notice...

  • Fist of Etiquette||

    Class Warfare Advocate Says Tax Code is “Great Equalizer,” Suggests You Stop Hoarding Your Earnings

    Tax Preparer Advocate Says Tax Code is “Our Bread and Butter,” Suggests Stricter Licensing

    Public Spending Advocate Says Tax Code is “Here to Stay,” Suggests You STFU

  • flye||

    Hit /and/ Run Advocate Says Ampersands "Not Needed," Suggests You Govern Your Comments Accordingly

  • ||

    Do you mean to imply I can't type Hit & Run?

  • scooby509||

    You can just spell it out, "et", it's a ligature.

  • Certified Public Asskicker||

    I am really geeking myself out next week and going to MD's CPA day, where MD CPAs get together and talk with state legislators before they go into session. I am curious to see how my profession whores itself out.

  • ||

    Your name needs it's own shirt, just like Federal Body Inspector.

  • Certified Public Asskicker||

    Ha, great idea!

  • Death Rock and Skull||

    Federal body inspector, like TSA bodies? Sick.

    Its Female Body Inspector, retard.

  • Ted S.||

    I agree that his name needs it is own shirt.

  • Voros McCracken||

    OT: Houston Astros prospect Jonathan Singleton just received a 50 game suspension for testing positive for marijuana. Sigh...

  • wareagle||

    because weed is exactly like Winstrol, Deca, HGH, or whatever pharmaceutical is in athletic vogue these days. Maybe baseball is worried about teh potential cost increase for post-game buffets.

  • Brandon||

    At least he won't have to play for the Astros for a third of the season...

  • Ted S.||

    Johnny Jolly got six years for purple drank.

    And yet, people still support the War on Drugs.

  • ||

    I get my first (reduced) paycheck of the year on Friday, huzzah!

    And my cousin-in-law just had another kid she can't afford, as she's still on welfare with the first one, so now she'll get more welfare. It's a win for equality! Tony is happy!

  • ||

    So...your cousin-in-law puts out?

  • A Serious Man||

    I still have my mail delivered to my parent's house and so when I last came home from school I had like four letters from the IRS because apparently there was a mix up in my $40 tax return from 2009, the very first year I paid income taxes.

  • ||

    Are you serious, man?

  • Certified Public Asskicker||

    I had a client that filed in Missouri. The state sent them a notice adjusting their overpayment by a dollar. A fucking dollar.

  • Death Rock and Skull||

    I saw a cashier at Jimmy Johns bitch out another cashier at Jimmy Johns over trying to give me 99 cents change instead of rounding to a dollar when the place was busy as hell after the bars closed.

    "A penny? Are you fucking kidding me?"

  • ||

    I work in a high end restaurant. I round to the nearest quarter unless I hate the guest.

  • ||

    And it only cost the state $50 to process it.

  • Drake||

    This very middle class family in New Jersey has an annual collision with the AMT - like a juicy bug with a windshield. (I'm not the windshield)

  • Tulpa (LAOL-PA)||

    Piers Morgan's guests offer a legitimate use for semiautomatic weapons: shooting Alex Jones.

  • JeremyR||

    And yet Jones is the "crazy" one.

  • Sevo||

    Fist of Etiquette| 1.9.13 @ 8:09PM |#
    "Class Warfare Advocate Says Tax Code is “Great Equalizer,” Suggests You Stop Hoarding Your Earnings

    Tax Preparer Advocate Says Tax Code is “Our Bread and Butter,” Suggests Stricter Licensing

    Public Spending Advocate Says Tax Code is “Here to Stay,” Suggests You STFU"

    Omaha Billionaire Says Tax Code "Needs to Raise His Taxes, Gives Money to Private Charity and Dodges Existing Taxes.

    Idea for new book: "How to Profit from Hypocrisy", Warren Buffett.

  • waaminn||

    You jsut know that is totally bad ass right? Wow.

    www.BigAnon.tk

  • Archduke Pantsfan||

    Nutty Fruitcakes: Sandy Hook conspiracy theorists

  • General Butt Naked||

    I'm a meta-conspiracy nut. I think the conspiracy nuts are plants used by the illuminati media to make gun owners look nuts.

    Put that in your masonic pipe and smoke it "Archduke Pantsfan"!

  • Archduke Pantsfan||

    That's what David Icke wants you to think

  • Tulpa (LAOL-PA)||

    GBN, I just found out that PA is under a "state of emergency" still due to Hurricane Sandy. So open carry requires a LTCF. I was going to rock out at the national stand up for gun rights thing in Harrisburg on 1/19 but looks like it would be an invitation for hassles from Ben Roethlisberger's bodygaurds in the state police.

  • db||

    Is that statewide or just in the eastern parts?

  • Tulpa (LAOL-PA)||

    It's in effect in Harrisburg, apparently. They made it sound like it was statewide.

  • The Sego Sago Kid||

    If we must have taxes, this is how they should work:
    -Everybody pays a flat percentage
    -This percentage will be pegged to government spending

    I imagine the electorate's love of big government will completely disappear under this plan as soon as their first paycheck shows up.

  • Rasilio||

    No No No

    Eliminate Withholding.

    Make them file the taxes and make them actually write a check for the whole amount.

    Much easier to forget about something that disappears from your paycheck before you ever see it than to forget writing a check large enough to buy a car ever year.

  • RPR2||

    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.

    just like the CFPB. these guys love enabling acts.

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