Another tax season has come and gone, and I hope that you didn’t get a nasty surprise from your accountant, Turbo Tax, or however you choose to do your taxes! We need to be fairly conversant with income tax planning in my line of work, but it was probably 15 years ago that I threw in the towel and hired a CPA to file my return. The complexity had gotten too high, and it was a wise decision to hire a professional who spends all day staying on top of tax law and the never-ending flow of changes.
Yes, the United States tax code is very long and complicated. You may have read a report saying that the tax code is 70,000 pages long! Fortunately, that is an urban legend as the actual US tax code actually rolls in at around 2,600 pages. Where the higher figure comes from though is that all of the regulations, annotations, legislative and case history does add up to over 70,000 pages. And, all of those pages are needed to properly interpret and rule on the actual 2,600 pages of the code. However you want to count it, the US tax code is long, complicated, and beyond the average person’s ability to understand.
A simpler tax code makes sense to most people on the surface, but don’t count on it happening anytime soon. There are too many industries, lobbyists and special interest groups ready to pounce at the first mention of a cherished deduction or special provision being taken away. Cries of “That’s not fair!” and “This will ruin our economy!” ring out whenever a change to a current deduction is proposed.
Yes, it would be great to have a tax code that is simpler, easier, and fairer. That last one is the hardest of the three, as what is fair is in the eye of the beholder, and is usually based on how it affects them or their industry personally. At some point, everyone will need to pitch in to obtain a system that will benefit our country and economy as a whole. Unless someone comes up with that vision and gets everyone on board, expect more of the same. More special provisions, more exceptions, and more pages in the code. Until that changes, I’ll keep my CPA’s phone number on speed dial!
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. Seek the advice of a tax professional for questions on specific tax matters.