Senator Grassley thinks that private tax preparers aren't up to the job:

"It’s incredible that we have legal requirements for a barber to cut your hair, but there are no requirements for someone to prepare your taxes. Americans have a right to expect that when they hire a tax preparer they’re going to get honest, straightforward advice.”

I wonder if he's going to insist on the same requirements for IRS personnel? Don't Americans have a right to think they'll get good advice from the people who are supposed to be running this bureaucratic monstrosity?

Two decades ago, Ralph Nader's Tax Reform Research Group prepared 22 identical tax reports based on the fictional economic plight of a married couple with one child. Identical copies were submitted to 22 different IRS offices around the country.

Each office came up with an entirely different tax figure. Results varied from a refund of $811.96 recommended in Flushing, N.Y., to a tax-due figure of $52.13 demanded by the IRS office in Portland, Ore...

...In a 2005 test of the system by the Treasury Inspector General, 35% of answers were incorrect. The Treasury Inspector General tested the system again to measure the quality of the taxpayer assistance during the 2005 filing season.

The bad news, according to a Nov. 15 Government Accountability Office report: The accuracy rate for responding to tax law questions was basically unchanged from 2004.

The poor performance was attributed to the representatives not using the prepared guide scripts or not interpreting the law correctly.

Not interpreting the law correctly is what defines a wrong answer.

Here's an idea. Let's blow up this welfare-for-accountants system entirely, and go to some kind of consumption tax. But I guess that wouldn't allow us to punish the productive, and do social engineering, would it?

I favor a flat tax or a national sales tax, or some combination of the two.

Meaningful tax reform will NEVER happen in the absence of a near-rebellion, no matter how good the alternative ideas are, whether a flat tax, national sales tax or whatever. The reason is that politicians like power, power derives from the ability to do things for people, and if you take away Congress' ability to do social engineering and confer economic benefits on favored industries and so on through the tax code, then they will lose a big piece of their overall ability to "do things for people."

In addition, could the economy absorb all those CPAS and tax lawyers who would suddenly be out of work if the tax code were reduced to something that the average 8th grade level reader could understand? (IIRC, that's the reading level of the typical NYT and WSJ story--other newspapers are closer to the 6th grade level).

Color me cynical.

Get rid of the IRS. Here's the answer.

http://www.fairtax.org

I prefer a tax system dedicated solely to raising the revenue necessary to run limited governments. Social reform by government force is not the proper business of a nation predicated on individual liberty

As much as I like the FairTax plan, I think ExRat is right. Outside of an outright rebellion I can't imagine any movement that would have the momentum to dislodge the tax establishmnet.

As much as I like a consumption or sales tax, I think there is very real value in having every citizen sit down once a year and focus on how much the government took from them.

I"ve seen comments before that said that the best way to force tax law changes would be to kill income tax withholding (and escrow accounts for real estate taxes.)

Having to write a multi-thousand dollar check every quarter really rubs your nose in how much money's going out...

I think we should just tax all those under the age of 26. But only for two years.

No, you could still punish the productive and do social engineering by using different rates on different types of products/consumption, which you'd pretty much have to do to avoid people whining about the system being "regressive."

You could still punish the productive and do social engineering by using different rates on different types of products/consumption...

I could even live with that (it wouldn't any worse than what we have in that regard) as long as I didn't have to take a tax accountant along to do a grocery run.

The good senator is right about one thing. It is incredible that we waste time with legal requirements for hair stylists.

The rest of it is just bloviation.

Guys, guys, guys.

I'm all ears if anyone can set forth a non-regressive, revenue-neutral consumption tax. Show me how the numbers work. And explain how one deals with transitional effects of changes like ending the mortgage interest subsidy.

While you're at it, you might consider the possibility that the "social engineering" reflected in tax law reflects complexity and competing concerns in society, voiced through, you know, representative government. The code and regs' growth in complexity, especially over the last decade or so, is more than anything else due to papering over the gap between the tax reform/reduction that sells politically and the revenue demands and complexity that are also politically necessary. I thought we were supposed to be past the point of statist one-size-fits-all. Everything in tax law is there because somebody'd be screaming without it. That includes you.

"Penalizing the productive"? Oh, I don't know. I look at gains and option treatment, royalty treatment, how estate tax actually works, etc, and I'm not so sure I see anything too penalizing these days. If you mean taxing earned income at higher rates than we'd like, I feel the same way most of the time. But walk down the street and ask random people how much they think someone with your income should be taxed. Democracy's a bitch sometimes.

As for both low-level IRS employees and H&L Brock-type preparers, just how much do you ask from people in those jobs? You get what you pay for. It'd be pretty easy to give low-level personnel in any sector a complex exam requiring comprehensive knowledge of an entire field for a perfect score, wouldn't it?

Here's a modest proposal: why don't a few of the people so big on tax simplification devote themselves to producing intelligible, plain-English explanations of commonly-applicable areas of tax law. A huge part of the problem is that ineffable tax-drone style, both language and organization. This effort would have the secondary but maybe equally important effect of flushing out actual conflicts, ambiguities, and problem areas.

All that being said, Grassley's 300 pounds of Iowa manure in a 200-pound sack. And no, I'm not a CPA or return preparer.

I've always done the taxes myself on paper(turbo tax not withstanding). This year there was a question that I wasn't sure about the answer to (Concerning the Basis for depreciation on a home we are renting out). I think I know the answer but I hate to be wrong on something like this since I am taking this deduction for the first time.

I called up the IRS and the person simply didn't know, they bumped me up to a higher level tax person. They didn't know either.

I've been told that I will get a call or an e-mail with the answer within 15 days. I guess it was a bad idea to ask the question on March 30.

I have the unhappy choice of guessing the answer and sending an ammended return later if necessary or filing for an extension. The rest of my documentation is done but I'm hanging on for this thing.

It really bothers me that I'm at this point. A better question for Mr. Grassley is why the code is so tough that a college educated fellow who has done his own taxes for over 20 years can't figure the answer to a question?

How about a constitutional amendment that says that the government can't levy a tax greater than 10% of an individuals income. They can have what ever social engineering and deductions they want, it just can't be more than ten percent of your income. After all, ten percent is enough for God, it should be enough for the U.S. Government.

And by the way, that includes all tax, including social security and medicare.

Hey Rand,

You may want to check out the Fair Tax book by Neal Boortz and John Lindner. It might suit your needs. (I disagree with their prebate concept, but otherwise, it's a good plan).

P. Ingemi, I sympathize with your IRS experience. I also sympathize with your alligator-wrasslin' with the return instructions and IRS pubs.

That being said, I have to ask if your expectations are realistic. The IRS help-desk (don't hurt yourself laughing at the term) is designed for high-volume, dead-simple questions. There's no way you're going to get someone on the phone who's likely to know off the top of her head the answer to even a reasonably hard question. The IRS needs to go to a real help desk system, with a hierarchy of expertise and a screening system. There's something else (besides plain-English, comprehensive explanations) that'd be lots easier than tax simplification.

But, but, but...unless you're a truly hardy pioneer type, there are lots of things you don't do for yourself beyond a simple level. You treat your own cold, but not your own cancer (lord forbid), you drive your own car but not your own commercial plane, you cut your own grass but don't take down your own big trees. Sad but true, in most areas there's a point where you sigh, get out your checkbook and phone book, and call an expert.

I happen to think that many CPAs overcharge for many returns. However, where there's a real ambiguity or conflict, there's something to be said for paying a pro to put his tail on the line. Not every year, just this year. After that, you'll have the answer, right?

And the return prep software really has gotten surprisingly good. Sometimes it's worth spending a few bucks and a few minutes installing, let it walk you through, and add its answer to the balance in handicapping your own guesswork.

I guess the way to think of your particular issue is that at least you're getting the deduction. Under simplification, you very likely wouldn't.

And maybe don't hold your breath waiting for a callback from the IRS.

This would all be moot if we could force the people in congress to do their own tax returns, on camera in front of an audience, without assistance. But, didn't they vote themselves to be tax free a few years ago?

As a CPA myself, I can't let a couple of these issues go by without commenting.

First, anyone who thinks that any sort of consumption tax would be any be simpler hasn't had to deal with one. Dealing with a basic sales tax is a pain in most jurisdictions, with various rules based on the nature of the goods or services, the location where the transaction takes place, the location where the goods end up, and the location where the payment is made. Dealing with a VAT tax, where tax from the ultimate sale is offset by previously paid tax on purchases, is twice as complicated.

Further, such transaction-based taxes create a drag on people's natural inclination to "hustle", creating either a scofflaw mindset or apathy. For people who decide to obey the law, there is an economic incentive to make infrequent highly profitable trades. For people who want to make many, less-profitable trades, the incentive is to reduce transaction costs by flouting the law.

In addition, the imposition of national consumption taxes follows a well-worn and highly undesirable path. (1) They don't replace other taxes, they are generally enacted as a supplemental levy in a period of "national emergency" as a "temporary measure" at a relatively low rate -- 1/2% to 1.5%. (2) Within 10-15 years, they are ratcheted gradually up to a rate of roughly 20%. (3) To assuage the envious, they are generally coupled with a tax on savings (which may be in the form of inflation). (4) I know of no cases where a government has ever repealed one.

As a second issue, I should note that each provision of the tax code has both winners and losers. Back in the day when I prepared a volume of tax returns, I would encourage people to put their information on the long form return -- then look at each blank line for what advantages they were forgoing. Every line of each form in a return relates to qualifying for some sort of a tax break. Don't have an entry coming from Schedule E? -- Congress wants you to have rental property and collect royalties....don't have deductible investment interest expense? -- maybe you should. If they were just taxing everything at the maximum rate, why would there need to be so many lines on the return?

Finally, as far as the earning power of accountants -- well, it's much the same as other lucrative, easy jobs that nobody sane actually wants to do...like sewer inspector or mortician. Oddly, more people tend to express opinions about taxes than sewage or stiffs....

Unless things have changed in Pennsylvania since 1993:

The state constitution forbids progressive taxation of incomes.

You add up all your income, take a modest deduction for union dues or work uniforms and suchlike, and multiply what's left by 2.7% to get your tax.

The PA-40 long form is about one page long.

The PA-40 short form is the size of a postcard.

The state sales tax is a bit stiff at 6%, but the regressive effects are eased by the fact that food, fuel, and clothing are exempt from the tax, making it easier for the poor to eat, wear clothes, and stay warm in the winter.

Not such a bad arrangement. Too bad they don't have it here in the People's Democratic Republic of Maryland.....

So you think a "consumption tax" can't be screwed up by the government? Consider this verbatim extract from one of the many "fact sheets" that Minnesota provides for our Sales Tax

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Candy is taxable. The exemption for food products does not apply to candy. "Candy" means a preparation of sugar, honey, or other natural or artificial sweeteners in combination with chocolate, fruits, nuts, or other ingredients or flavorings in the form of bars, drops, or pieces.

Candy does not include any preparation containing flour and must require no refrigeration. Flour: Items that contain the word “flour” as an ingredient on the label are not taxable candy. Examples of items that contain flour that are not taxable include Kit Kats, Twix, ReeseSticks, and licorice. Refrigeration: If an item requires refrigeration, it is not taxable. For example, Popsicles and ice cream bars require refrigeration so they are not taxable candy.

However, these items are taxable if they are prepared by the seller.

Candy that does not require refrigeration is taxable even if sold frozen.

Note: All food sold from vending machines, or food prepared by the seller is taxable.

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Got that? The candy bar you're selling to that kid is taxable unless it contains flour unless you made it in your candy shop.