The federal tax system is too complicated II

If you’re searching for more evidence in favor of tax reform, you might consider a six-page article in the latest Bloomberg Businessweek.

It details the little-known Taxpayer Advocate Service, which represents taxpayers in “egregious disputes” with the IRS.

There has been only one national taxpayer advocate, [Nina] Olson, 58, who has held the position since Congress created it a decade ago. She presides over 2,000 caseworkers and data analysts — a sliver of the IRS, which employs more than 100,000 people.

Individuals, corporations, small businesses, millionaires, and even sovereign nations have sought the help of the Taxpayer Advocate Service, as have thousands of accountants and trained tax preparers who find the tax code and the IRS impossible to navigate.

In a typical year, Olson wins relief for 70 percent of the 300,000 people and businesses that open a case, according to her office. Many … have done nothing wrong.

In 2006, the IRS studied 46,000 audits of taxpayers. Among those returns that were flagged for misreporting income, agency auditors reported 67 percent of the problems were unintentional errors; 27 percent were computational errors either caused by the IRS or the filer; and 3 percent of mistakes were intentional.

Of course, tax reform is a good idea for more than just the federal government. Roy Cordato has called for reform of North Carolina’s sales tax, corporate income tax, and personal income tax.

Mitch Kokai / Senior Political Analyst

Mitch Kokai is senior political analyst for the John Locke Foundation. He joined JLF in December 2005 as director of communications. That followed more than four years as chie...

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