Your Tax Dollars at Work

The Internal Revenue Service issued a 70 page memorandum attempting to debunk tax protester arguments that at least from my perspective no one but nut cases have ever taken seriously.

I am all for assuring that Americans comply with the tax laws. But I am unsure why the issuance of this memorandum will help to accomplish that goal. Those people who are foolish enough to believe that somehow the IRS is a creation of the devil or unconstitutional are unlikely to read the paper. The paper, like many other work of the Service, has no introduction. Its first paragraph states "Some assert that they are not required to file federal tax returns because the filing of a tax return is voluntary. Proponents point to the fact that the IRS itself tells taxpayers in the Form 1040 instruction book that the tax system is voluntary." I've also encountered people on the street that believe that Tinkerbell is real. But I wonder whether it would be worthwhile to have the service publish a memorandum which debunks that myth too.

Ultimately, the real problem with the tax system is not that there are some crackpot ideas about how we do not have to comply but that the real policy makers make the assumption that elements in the tax code are interchangeable and have no secondary effects. Thus, if they worry that a very small number of taxpayers occasionally don't pay their fair share they adopt something called the Alternative Minimum Tax which now snares a very broad range of taxpayers.

Then there is the fiction that the cost of compliance with the tax code is minimal and at least according to the IRS data is diminishing. A paper on the IRS site suggests that more and more people are using computers to prepare returns (what is unsaid is that there is still a very high percentage of people who feel it necessary to have a preparer do their returns).

What really matters here is not that some nut cases think the system is voluntary but that the system is as complex as it is without very good reason and that the costs of keeping up with all the jot and tiddles in the system diminishes the economic productivity of our economic system. But then I would not expect the Service to publish a paper like that.