Blogs

Recently the Government Accounting Office concluded that the complexity of the tax law contributes to the non compliance of taxpayers (Read the article at http://www.accountingtoday.com/news/Congress-Finds-Tax-Code-Complexity-Contributes-Tax-Gap-59001-1.html#read).  The errors deal specifically with the basis of assets that they own or sell.  This is essential to prevent taxpayers from paying tax on the entire proceeds from a sale since they paid something for what they sold the gain is the only fair way to tax these sales.

The tax code will be complex no matter how much "simplification legislation" is used. The tax code is a combination of law, interpretations, revenue rulings, revenue procedures, and court decisions. Another synonym of code is law. Law is complex that is why we have law school.

Attorneys, CPAs and EAs have special knowledge of the tax code and procedures. All of these professionals are allowed to practice (a form of "administrative law") before the Internal Revenue Service. Each of these professionals are extensively trained, tested and monitored. The average self-prepared preparer (the public) cannot expect any legislation or simplification to improve this situation.

Perhaps congress wants to simplify the practice of law? Whenever congress attempts to "simplify" any law, this "simplification" process always makes the laws more complicated. The more laws congress passes the more confusing the laws that are effected become.

Congress loves to pass a tax law a year to make things "simpler, easier, or better" for the public. In most if not all cases the system becomes more complex, difficult, and worse for the public. Perhaps if Congress would leave the tax law alone for ten years and stop making "temporary changes" that have to be updated every year the law would become more understandable simply because it would not be changing every time congress passes a law.