Resolutions We'd Like to See

2014 is here, and it's time for New Years' resolutions. Americans across the country are pledging to lose weight, quit smoking, exercise, and find new jobs. Some of them will succeed, others will lose faith before the first snowmelt. (Want to make a fortune? Open a gym that turns into a sports bar on February 1!) So we thought we would take this opportunity to suggest some resolutions to the folks who determine how much tax we pay.

Congress: Put the Tax Code on a diet. According to one count, our tax code runs nearly 4 million words. That's four times the words in all the Harry Potter books put together, with none of the magic and wizardry. (You may think we work a version of the "obliteration charm" when we save you thousands in tax, but we assure you there's nothing supernatural involved.) We say it's high time to put the Tax Code on a diet — and if that doesn't work, try bypass surgery. We can raise just as much money for the government without dragging down the economy the way the tax code does.

The problem, of course, is that there's no agreement in Washington to accomplish anything so ambitious. Our current Congress is widely considered to be the least productive in history, at least if you consider "bills passed" to be the right measure of productivity. House Speaker John Boehner has said that Congress should be measured by how many bills they repeal — if he's serious, maybe he can start with nightmares like the Alternative Minimum Tax, the Earned Income Tax Credit, and the passive activity loss rules.

Back in 1986, Ronald Reagan cited the following language from the tax code (defining private foundations, if you're curious), to help make his case for comprehensive tax reform: "For purposes of paragraph (3), an organization described in paragraph (2) shall be deemed to include an organization described in section 501(c)(4), (5), or (6) which would be described in paragraph (2) if it were an organization described in section 501(c)(3)." Congress has passed a dozen "tax simplification" laws since then, and the language Reagan cited still remains. (Congress must have spent their time working on the really confusing stuff!)

IRS: Focus on customer service. Fighting IRS red tape makes a trip to the DMV look like a stay at a five-star hotel. The average hold time to speak to someone at the agency rose to 17 minutes in 2012, but the percentage of callers who actually get help fell to 68%. Mail is even slower — nearly half their correspondence takes more than 6½ weeks to answer. No private-sector business would accept those kinds of results.

The problem here is that the IRS simply has an impossible job. They don't make the tax laws, but get blamed for them just the same. They don't get the budget they need to do their job, but get blamed for falling down on it just the same. (For Fiscal 2011, the IRS collected $2.52 trillion in tax with a budget of just $11.8 billion, which makes a pretty phenomenal return on investment of 214:1.) Few members of Congress want to be known for giving the IRS more money. But funding for basic technology and customer service shouldn't be nearly as hard a case to make as funding for more aggressive enforcement.

As for us, we're resolving to bring you even better, more proactive tax advice. That process starts with a comprehensive plan to take advantage of every deduction credit, and strategy you legally deserve. If you don't already have one, maybe you should make getting oneyour resolution for 2014!

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