Thursday, December 04, 2008

5 Ways to Change the IRS

Independent journalist David Cay Johnston recently published an article titled Change and the IRS, which you can download via TaxProf blog by clicking here. In the paper Johnston acknowledges that the federal government needs revenue, and suggests 5 ways to change the IRS to benefit both taxpayers and the government.

1. Make English, and not bureaucratese, the first language of the IRS? Taxpayers are the users, and IRS forms should be friendly. Period.

2. Hire Stanford's Joseph Bankman to make real a brilliant idea he proposed in Tax Notes -- letting most people pay their income tax without filing.

3. Stop the consumer fraud inherent in letting anyone prepare a tax return for a fee.

4, With the right technology, the IRS will be able to do something much more important than process tax returns. It will, like Oracle, be able to analyze data to detect patterns and identify not just blatant cheats, but chiselers.

5. Hire tens of thousands of auditors. Last year the audit odds were 1 in 263, down a third from the peak year of 1998, both much too low to deter anyone but a Casper Milquetoast.