Taxes Dog Everyone, Not Just Dems

Once upon a time, Americans used to receive their IRS W-2 forms in January. The typical taxpayer then sat down with a form 1040 and a pencil and got to work. An hour or so later, voilà, his or her taxes were filed. It was like a fairy tale, and it is one that fewer and fewer Americans remember.

Of course, there are some people who do not need help to fill out their tax returns. These people typically work for low wages, lack dependents, investments, and do not pay taxes. For those of us who do fork over some money to the government each year, the expense comes with a bonus headache.

President Obama's cabinet nominations were decimated last week by tax problems, prompting some to ask if Democrats pay taxes. Many people, some of them quite famous, have had problems with the IRS. Willie Nelson, Spiro Agnew, and Wesley Snipes have found themselves on the wrong side of the law, along with countless others, less-famous and less-wealthy. A former IRS commissioner, Joseph Nunan, once faced tax evasion charges for failing to claim income from a wager he won. This probably comes as no surprise to regular people trying to do their taxes.

According to the Internal Revenue Service, the average taxpayer needs to spend about 27 hours keeping records, planning and filling out forms to stay on the right side of Uncle Sam. If, however, that American happens also to be self-employed, the amount of time doubles.

A married couple buying their home with one self-employed spouse, one child in college, modest investments, and a retirement plan may need to file as many as ten forms. The cost of an accountant to prepare the forms begins at $200. Even though the accountant's fee is tax deductable, many people who need an accountant's help are hard pressed to come up with the fee.

IRS forms are confusing and complicated. The directions are not written in clear English. The IRS maintains a tax line to "help" taxpayers who have questions. Unfortunately for taxpayers, IRS employees are not liable for the answers they give, and they do not have to volunteer information. So if you ask an IRS tax counselor a question and use his erroneous answer to fill out your tax return incorrectly, you are on your own.

Not only can tax problems derail your cabinet nomination, they can ruin your life. Willie Nelson knows this better than most. The IRS relieved him of most of his assets in 1990 to settle a $16.7 million debt. The IRS can attach any income you have, including Social Security payments, to recover money it claims you owe. The IRS can recoup taxes by placing a lien against your home, even in homestead states. There are several national law firms that specialize in IRS tax problems, a measure of how widespread problems are.

Now the IRS has decided to outsource its collections. People who don't have the money to pay on tax day or who get behind can count on their contact information being given to a commercial bill-collector, as if owing money to the government weren't unpleasant enough.

Congress could write a simple tax code in a week. One tax rate for personal income, one for business income. People would pay their flat percentage through payroll or income deductions, without returns, forms, deadlines or headaches. Everyone, even the workers at McDonalds, could shoulder the burden, rather than only those who cannot find a way to get out of it. It might displace a few tax accountants, but they are clever fellows. They'll find something else.