'This is no way to run a tax system,' exclaims national taxpayer advocate

The National Taxpayer Advocate's annual report to Congress says problems with tax code complexity are undermining Americans trust in the tax system.
by Don Mecoy Published: January 16, 2013
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The report notes that cutting funding for a revenue center — in this case, the IRS — is shortsighted. The IRS, which produces $7 for every $1 spent, has experienced budget cuts along with other agencies, the report said. But the IRS commissioner estimated that cuts in IRS funding will ripple through the government, producing fewer dollars for defense, infrastructure, intelligence, medical research and more.

The agency already appears to be nearly overwhelmed by its task. More than 30 percent of taxpayer phone calls to the IRS go unanswered, and callers lucky enough to reach someone waited an average of 17 minutes. Next year, the agency has set a goal of answering 63 percent of taxpayer calls — a decrease from the previous year's lackluster performance.

There are more examples in the lengthy report:

The IRS spent $57.9 million on wasted printing and postage in 2009 because 10 percent of the mail it sends to taxpayers is returned as undeliverable. Meanwhile, the clock on many taxpayer rights and limits starts running when the IRS mails its letter — whether or not the letter reaches its intended recipient.

Taxpayers who adopt a special-needs child who is a member of an American Indian tribe cannot claim a $10,000 special needs adoption credit. The credit requires certification from a state that the adopted child has special needs, but tribes, which have exclusive jurisdiction regarding tribal children, do not fulfill that requirement under current tax law.

The difficulty and confusion among international taxpayers about what, if anything, they owe contributed to a sixfold increase in the number of people who voluntarily surrendered their U.S. citizenship between 2008 and 2011.

The report, couched in the jargon of bureaucracy, is no page-turner. But it will keep you awake at night.

by Don Mecoy
Business Editor
Business Editor Don Mecoy has covered business news for more than a decade after earlier working on The Oklahoman's city, state and metro news desks, including a stint as city editor. He has won state and regional journalism awards for business,...
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To read the National Taxpayer Advocate's report to Congress, go to taxpayeradvocate.irs.gov.

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