…Ok, just a few more. It’s that time of year when many of us are thinking about filing our federal income tax returns. I am not. But I am thinking about filing many others’ returns. I am Dan Andrews, an instructor at Webster University and a CPA in private practice.
Wednesday’s announcement by the Justice Department that it is trying to shut down more than 125 Jackson Hewitt tax preparation offices for allegedly participating in fraudulent activity that may have cost the U. S. treasury more than $70 million started me, again, to think about how we administer our tax collection system in the country. (See the story in the April 4 Star Banner.)
Such problems are not new, nor are they rare. They occur because we employ a tax system that allows dishonest persons to exploit it. You’ve probably heard about many proposals for tax reform in the last few years whose goals included simplification, reducing the costs of compliance, and making the collection process more efficient. To date none of the proposals have seen the light of day in Congress. Why is this? Do we accountants have such a strong lobby in Washington that is working to maintain the complexity of the tax laws? Hardly. My colleagues shake our heads just as the average taxpayer does at the complexity of the laws and regulations we are governed by.
I believe that in general most accountants would like to see genuine reform of the revenue laws that would benefit every taxpayer and reduce the incidents of fraud such as the one mentioned above. If we accountants did not have to spend so much time helping our clients comply with the law (time that we all pay for, incidentally), we could develop practices that could bring more value-creating services to our clients. The savings in compliance costs and the increased value that could be added by offering sound consulting services would have an immensely positive impact on our economy.
If meaningful tax reform ever occurs, accountants might have less tax compliance work to do and therefore we would have to make huge changes in the way we do business. We would have to find other things to do. But we have been meeting the challenges brought on by change for many years. We are accustomed to it.
In future posts I will have more to say on all things taxing. Let me know your thoughts on this issue and on what you would like to read about.