Posted: Apr 26, 2005 By: Bob Cohen

Subject: "Reform" impossible ... why not recognize new technical improvements

Comment: 1. Government regulations & laws are inherently complex -- the result of political compromise that are ongoing and, typically, additions to existing 'baseline' laws.

2. Tax-Preparation Software -- Turbotax and others, including web-based free alternatives -- provide easy-to-understand human interfaces, while providing complex if-then-or logic and computations to yield accurate 'legal' results.

3. Tax preparation software can provide multi-lingual interfaces to include nearly all Americans, but support for such English-alternatives might require government sponsorship inasmuch as the non-English populations may not offer a pure-profit incentive for existing software providers.

4. All "professional" tax preparers use "professional" software except (a) that software has fewer users and is therefore more prone to error and (b) the professional's service margins yield a consumer's cost about 10-times the do-it-yourself alternative.

5. Whether the regulations are 100 pages, 1000 pages or 10,000 pages long -- taxpayers with income from sources other than wages will seek web and computer automation in greater proportions as the web becomes even more omnipresent in the future. The trends are already in place.

In summary, I believe the panel could recommend a program of government support for web-based tax planning and preparation software at far less cost and far greater impact on efficiencies and accuracy -- than "reforming" the tax codes altogether.