Subject: tax reform
Comment: Dear Sir, I am an accountant and a CPA. Although, I do not prepare tax returns for others (I just prepare my own), the process is confusing and highly subject to error. I also do my return the old fashion way (by hand). Having just received an audit letter from the IRS I have the following observations:
· The instructions are not clear. In 2003 I received qualified dividends for some of the stocks I own. While reading the instructions for the 1040, I entered this information on line 9b. The audit letter indicated (although not very clearly) that I should have also entered this information on 9a as well. Isn't this double taxation? Well, it did not occur to me at the time that in a further calculation you subtract this amount out in calculating the actual tax.
· In trying to provide feedback to the IRS about the forms or the issue, I could not find anyplace on the web to provide this feedback. I know a lot of erroneous questions would be raised, but shouldn't be easy to leave feedback?
· The number of times you have to go to a secondary calculation it onerous. My guess is that I had to go to at least 10 separate schedules if this or that happened. If you received a refund of state taxes go to xxx, if you adjusted gross income is over xx, you deductions may be limited...
· The Alternative Minimum Tax. No one understands it and the reason it was created (to tax wealthy tax payer who avoid tax) is not working. No one I know understands this form.
· The simply answer is a flat tax. I always hear this will not work, but I believe it would.
· Eliminate all of the special interests. In college, my tax professor told us that tax law is not logical. Once you understand this, it will be much easier. Many of the regulations specify certain classes or may be retro active or not. He said if you look at the origin of the reg, at some point it benefited some special interest group.
· Implement minimum taxes for Corporations. Most corporations do not pay cash taxes. They hire the best and the brightest to get around this and do a great job. Unfortunately, it places the burden for funding government activities on the average taxpayers.
· I really think the IRS does a remarkably good job in what they do. However, their job is "mission impossible". I think great strides have been made this year with free filing. However, I know the IRS has programs where the data from my tax return is input and then matched against other records. Why doesn't the service make this type of program available to the public. Wouldn't that be great? I could enter my information directly and immediately know if there was a problem. I know it would put many lawyers and accountants out of business, but it would stream line the tax collection process, eliminate the unintentional errors and let the IRS focus on those who evade tax.