Tax simplification: Congress passes the buck
Will Rogers gets it right again: “The only difference between death and taxes is that death doesn’t get worse every time Congress meets.”
But it turns out that quietly and unwittingly lawmakers may have finally got it right when they passed the bipartisan “Plain Writing Act of 2010” (H.R. 946), to which the Editor-in-Chief penned his signature on October 13th. This stealth law requires all federal agencies, including the IRS, to use “plain language” in written communications with all their constituencies.
If the IRS technocrats take this mandate seriously, that means all the tax forms, instructions, notices and gobbledygook communications that come our way have to be revamped; in a format allowing us to read them only once to get the drift; and then to know what to do, to do it right, and right away.
Can the venerable Taxman overcome French philosopher Blaise Pascal’s satire on verbosity: “The letter I have written today is longer than usual because I lacked the time to make it shorter”? Can we expect to see the tax icon 1040 trimmed to a couple of understandable pages and its instruction book slashed from 103 pages of gibberish to a short story of clarity? Will the Agency find a new name for Form 8840 – Closer Connection Exemption Statement for Aliens, to tell UFOs they don’t have to file a tax return?
I think so, and here’s why.
The plain language movement has been around for decades. It has taken hold in the business community and companies that practice its teachings enjoy a measurable competitive edge. It is folly to argue, as some will, that bureaucrats can’t dramatically sharpen their written message. The success stories around the few government agencies that take Plain Language seriously are well-known and indisputable.
The new law requires government documents to be written clearly, concisely, well-organized, and to follow other best practices appropriate to the subject and intended audience. The mandate to the IRS couldn’t be plainer or clearer.
The government estimates we toil 3.8 billion hours each year on the 1040 alone. But tax simplification is not just about easing the burden for 120 million individuals and hundreds of thousands of small businesses, come April 15th. It’s also about converting confused, agitated and tempted non-compliers into silent, mollified and compliant taxpayers. The country’s tax compliance rate is 86 percent and every one percent improvement will produce an added $20 billion in revenues. That’s serious money in today’s era of unsustainable trillion dollar deficits.
The sure-fire and direct road to tax simplification is through the halls of Congress. That won’t happen. A less flashy and more incremental path is through the agency that is the face of government to, and touches virtually all, Americans. Success in achieving the IRS’s ultimate mission – maximizing taxpayer compliance – is directly linked to the quality of its touch.
John Klotsche is a former partner and Chairman of the Executive Committee of the international law firm Baker & McKenzie. He served as Senior Advisor to the IRS Commissioner from 2003-2008.