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Tuesday June 19, 2018

Washington News

Washington Hotline

IRS Supports Simplified Tax Code

On June 21 IRS Commissioner John Koskinen spoke at the IRS Tax Policy Center Joint Research Conference in Washington. He explained that as IRS Commissioner, he is regularly asked his opinion about tax reform.

Koskinen stated, "I have had people asking me whether the IRS might resist significant tax simplification, and actually the opposite is true. No one would be more delighted with a more simplified tax code than IRS employees. There are many significant benefits on the administrative side if the code itself were simplified as much as possible . . . making life easier for taxpayers, and it is a message we are continuing to take to Congress."

The 10 million words in the current tax code and regulations create complexity. Koskinen observed that this is the case in three specific areas.

There are six separate definitions of "child." The rules for deciding who is eligible for the earned income tax credit (EITC) are very complex. There are also multiple tax benefits or credits for students attending colleges or universities.

In an effort to reduce the number of government regulations, the White House directed all departments to remove two old regulations when one new regulation is published. Koskinen noted, "Historically, IRS regulations have been treated as different than the normal government regulations, on the sense that what we do is not impose new burdens or opportunities on people. We basically provide guidance as to how to operate under the statutes that Congress passes under the Code."

Koskinen did not state whether the IRS plans to follow the directive to remove two old regulations for each new regulation that is published.

Editor's Note: There has not been comprehensive tax reform since 1986. During these three decades there has been a dramatic increase in the size and complexity of the tax system. Even taxpayers who take the standard deduction now use tax software or an advisor to prepare taxes. For the 30% of taxpayers who itemize deductions, nearly all use tax software or a tax preparer. While the House, Senate and White House have all talked about comprehensive tax reform, there still is no proposed tax reform bill in Congress.

Published June 23, 2017
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