Irs Deserves One Thing: Extinction
‘I’m sick and tired of politicians just beating up on the IRS,” Rep. Charles Rangel, D-N.Y., said in a recent interview. “We have the best and fairest tax-collection system in the world.”
If the author of that statement were anyone else, a perfectly legitimate response would be laughter. But Rangel is the ranking minority member of the powerful House Ways and Means Committee - which oversees the IRS and writes all the nation’s tax laws - and would become chairman in a Democrat-controlled Congress.
Accordingly, here are nearly 20 facts and observations - a mini-audit, if you will - to explain why America’s tax-collection agency has earned those “beatings” Rangel is so concerned about:
The IRS has a whopping 480 different tax forms, and another 280 forms to explain how to fill out the first 480.
The IRS sends out 8 billion pages of forms each year, enough to circle the earth 28 times.
The IRS sacrifices 293,000 trees each year to do its job.
The IRS sends out 10 million “correction notices” each year, roughly half of which contain errors themselves.
The IRS dispenses incorrect information to more than 8 million taxpayers a year who call for help on complying with the tax law.
The IRS doesn’t answer the phone: Of the 2,800 calls made to the IRS by inspectors from the General Accounting Office (GAO) during a two-week period in 1995, only 249 were answered.
The IRS cannot account for more than two-thirds of its own budget, according to the GAO.
The IRS budget itself has grown from $300 million in 1955 to $10 billion today, a 3,200 percent increase.
The IRS has $200 billion worth of mistakes on its books, according to the GAO.
The IRS fined one hapless citizen $155.27 for underpaying his taxes by one cent.
The IRS tried to fine a business $46,806 for an alleged underpayment of 10 cents.
The IRS raided a day-care center in Allen Park, Mich., detaining the children until their parents showed up and signed papers agreeing to pay the government what they owed the day-care center.
IRS employees have been caught snooping on the tax returns of their neighbors, which violates not only privacy but federal law.
The IRS imposes $157 billion worth of “compliance costs” - money paid to accountants, time wasted finding files, etc. - on the economy every year.
The IRS imposes compliance costs of more than $1,300 per taxpayer.
The IRS forces small businesses to spend $7 in compliance for every $1 collected by the government.
But let’s be fair. The IRS isn’t some rogue agency populated by tax-collecting storm troopers out to trample citizens’ rights. Most IRS employees are simply trying to do their job. Therein lies the problem: Tax law has become so arbitrary and incomprehensible no one can understand it - not even the government agents whose job it is to enforce it.
As for taxpayers themselves, forget it. “Many taxpayers fail to comply because they cannot easily understand what they are supposed to do,” said former IRS Commissioner Shirley Peterson in testimony before Congress. And even if taxpayers go to the expense of hiring professional help, they’re still at risk. For years Money magazine conducted a test of professional tax preparers to see who could file the most accurate tax return. Almost invariably, none of the experts’ answers was the same, and none was correct.
Is there any hope? Well, yes. It’s called the flat tax, a plan that was doing a fine job of capturing the imagination of the American people before it came under ruthless attack from some of the very people who are supposed to favor tax reform. In case you’ve forgotten what the flat tax is all about, let me offer a brief refresher course: One low tax rate for all Americans. No loopholes. A postcard-sized tax return. In short: The end of the IRS as we know it.
Of course, until fundamental tax reform returns to the center of the political debate, Americans will just have to listen in disbelief as lawmakers urge us to embrace the “best and fairest tax-collection system in the world.”
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