Probably we all agree the income tax code (law) is too complicated. It seems to me that only Congress can take action to simplify it, but they are going in the wrong direction. Trying to influence social actions with special tax law provisions is not working.
It has been estimated that the tax code in 2005 was three times longer than it was 30 years before.
In 2001, the Joint Committee on Taxation counted 1.4 million words.
In 2005, the Tax Foundation counted 2.1 million words in the tax law.
National Taxpayer Advocate Nina Olson testified to the House Ways and Means Committee on tax reform that it was up to 3.8 million words (including captions and page numbers) without the 2010 changes.
She said the captions, page numbers, tables of contents, legislative histories, effective dates and other supporting matter was needed to read and try to understand the tax law. There are new regulations, court decisions, etc. every week.
Our nation has lost a lot of jobs to other countries, because of the tax law complexity and high corporation tax rates.
The cost to our nation to comply with the tax laws is far too much.
When I began the CPA practice in Carson City, there were only two other CPAs in town.
Now the number of CPAs in public practice and in government is probably more like 60-plus.
We do more than just tax returns and related planning. We are constantly urging clients to get their wills and power of attorney forms done and kept up to date. We offer suggestions on investing, including discussing allocation between various kinds of assets. Even investing is impacted by the tax laws, not just the tolerance for risk taking. We enjoy helping businesses become more profitable, not just pay the lowest legal tax possible. We will have lots to do if the tax laws are simplified.
The National Commission on Fiscal Responsibility and Reform issued its report December 2010 with suggestions for simplifying the tax code and reducing the debt. Congress seems to be ignoring that report, but I hope they will start to change the tax law as soon as possible. Sooner is better than later.
Did you hear "We're all in the same boat now, and we've got to learn to work together" by Dorothy Height.
• John Bullis is a certified public accountant, personal financial specialist and certified senior adviser serving Carson City for 45 years. He is founder emeritus of Bullis and Company CPAs, LLC.