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William Perez
William's Tax Planning Blog

By William Perez, About.com Guide to Tax Planning

Want to Help Change the IRS?

Thursday March 22, 2007
The Internal Revenue Service is seeking volunteers for the Taxpayer Advocacy Panel, a group of some 95 taxpayers who advise the IRS on customer service and administrative issues. Panel members volunteer 300 to 500 hours per year of their time during their 3-year commitment.

“As the IRS continues to examine taxpayers’ needs in the area of service, the Taxpayer Advocacy Panel has emerged as a vital source for gathering and providing information from the perspective of taxpayers,” explains National Taxpayer Advocate Nina E. Olson in a press release announcing the opening of the application period.

If you do get selected, you'll have a change to work with intrepid tax journalist Kay Bell, who was selected to serve on the Panel back in November 2006. You can read over her notes from Panel meetings to get a feel for the issues they tackle.

On the Web:

Comments
March 27, 2007 at 7:39 pm
(1) Ian says:

The system’s design is rife with opportunities for abuse and resentment. This results from gov’t taking its revenues from the income, rather than the sales, side of the economy.

An elegant solution is to simply remove any interest that the gov’t has in yours and my income, and to replace it with a simple consumption tax. This ensures that the government gets paid the way working moms, dads, and kids do: when something is sold.

There are no unpaid tax collectors, under FairTax, businesses collect it – and receive a percentage of their collections; they simply remit it to their state revenue dept every month. Non-compliance enforcement problems are exponentially lessened, because those required to file returns (only businesses, monthly) are reduced 90%.

Further, under FairTax, past capital as well as money derived from current wages, would yield up the tax at such time as its benefits are realized – when it is spent. (For example, mom and dad’s inheritance for the kids is taxed when the kids spend it). Finally, visitors to the country and those who derive income from illicit sources do not escape FairTax – its paid “at the cash register” when they buy the “bling.”

The FairTax IS the end of IRS problems and the compliance problems that arise in spite of (or maybe on account of) the complexity, fear and intimidation that is placed before every taxpayer.

For more, see:
http://www.fairtax.org/

March 28, 2007 at 5:03 am
(2) Ken Howe says:

I also think a tax on consumption would be a better source of revenue for the government at any level than trying to punish those who are successes and show the willingness to work hard and smart.
Tax the things we use not the things we create.

March 28, 2007 at 7:55 am
(3) Kim Kilgallen says:

A consumption based tax like the FairTax would solve most of our tax collection problems, level the playing field for business and fund our social programs.
Continuing to raise taxes does nothing but make more people seek ways to avoid paying taxes.

March 28, 2007 at 8:47 am
(4) Art Duncan says:

The current system is corrupt and is too open to tampering with by politicians. The FairTax (National Sales tax)is a much better solution to the income tax. You will see every time you make a purchase just how much our government is costing us. Most Americans don’t have a clue how much they are now paying. Democrats should get behind this since it completely untaxes the poor with the monthly rebate. Everyone else will pay their fair share.

March 28, 2007 at 8:57 am
(5) Richard Brogger says:

December 12, 1787

An essay by Alexander Hamilton, the twenty-first of the Federalist Papers, is published. In this essay our Founding Father argued the advantages of a consumption tax.

Excerpt from FEDERALIST No. 21

It is a signal advantage of taxes on articles of consumption, that they contain in their own nature a security against excess. They prescribe their own limit; which cannot be exceeded without defeating the end proposed, that is, an extension of the revenue.

February 21, 1848
The Manifesto of the Communist Party, written by Karl Marx and Friedrich Engels, is published. Plank #2 is “A heavy progressive or graduated income tax.”

February 3, 1913

Amendment XVI of the United States Constitution, authorizing income taxes in their present form, was ratified.

It seems that in America the ideas of our Founding Father was overshadowed by the new ideas of Communism by the start of to 20th Century and as a result, we got the income tax and the IRS. History has shown the wisdom of our Founding Fathers and the failure of the ideas of Marx and Engels. The USSR is history while the USA continues but it is time to flush one more communist concept from our system.

It is highly unlikely that anything can be done to truly fix the income tax or the resulting IRS. Income taxes do not “contain in their own nature a security against excess.” while the consumption tax does. Rather than attempt to fix failed systems, it is time to eliminate them. The Fair Tax would replace the communist’s income tax with Alexander Hamilton’s taxes on articles of consumption and transfer a huge amount of power away from our government and back to the people where it has always belonged.

March 28, 2007 at 9:40 am
(6) Steve Curtis says:

The problem with trying to “fix” the IRS is that the system of income taxation itself, rather then the people or their actions, is the problem.

Added on top of that is the “dark-of-night” games played with the tax system by elected officials to reward supporters and punish political opponents has made the current regulations so convoluted and contradictory that it is nearly impossible for the layman to know whether or not they are in compliance, or to defend themselves from charges that they are not.

The replacement of the current system by a consumption tax, such as the Fair Tax, is the only way to fix the problems of the IRS. Anything short of that is simply rearranging the deck chairs on the Titanic.

Rather then signing up to “help” the IRS, the public should be standing outside their offices, demanding an end to the bureaucracy and the hideous edifice which it supports

March 28, 2007 at 6:08 pm
(7) Jeff Locke says:

I echo my whole-hearted support for House Resolution 25 and Senate Bill 25 known as the Fair Tax. A “flat” consumption tax grows the economy, but a supposed “flat” income tax fixes nothing and continues the power grab option perpetuated by the current system that punishes hard work. And the payroll witholding tax is the most punitive of all taxes borne by the working class poor. Deep-six the income tax system. Send-up the Fair Tax!! It’s Time for the Change!!

March 28, 2007 at 6:20 pm
(8) Eugene Simmons says:

The current tax code cannot be fixed. It must be replaced in total. The best replacement is thru passage of HR25, known as the Fair Tax.

Just Do it!

March 28, 2007 at 10:13 pm
(9) Harold Vanderboegh says:

Our current system of taxation in the United States is fundamentally flawed. The income tax code has become so overly burdensome and complicated that fundamental change is necessary. It is unconscionable that we as a free people allow ourselves to be taxed in such a punitive, coercive, expensive, and invasive manner. We the people allow a tax system that says you are guilty until you can prove otherwise. We allow a system that only one-third of Americans pay into and fails to collect $30 billion in taxes each year. We allow a system that punishes its people by taxing them even more when they are successful.

We the People must change this system! Just call your local Congressman’s office and let him know that you want them to tax consumption NOT income and the best plan to do that is the Fairtax Act H.R.25.

March 29, 2007 at 9:47 am
(10) Enrique Rodriguez says:

Customer Service and the IRS is an oxymoron. The tax code is broken and there is no efficient and equitable way that the IRS can do their job when it comes to customer service.

On the other hand, what we need is the Fair Tax (a national consumption tax) to replace our undecipherable and economic stifling unjust tax code that punishes investment and hard work.

Wouldn’t it be more efficient for the IRS to track 18 million (retailers and corporations) than 190 million individual, retail and corporate taxpayers?

It is time to say enough is enough. It’s time to pass HR25, The Fair Tax, as written.

March 30, 2007 at 11:50 am
(11) Matt Perkins says:

Yes, it sounds like a great idea to change the IRS. Actually, more like ‘remake’ it. Our current system is corrupt and lots of ’stealth’ taxation occurs. We are punished for getting extra education and working harder or more hours. If you fill out a tax return and are just slightly off, rather than just paying the error you have to pay PENALTIES and INTEREST on the error. What other business does this to a consumer?!?

Just the other day I read about some of the ‘pork’ added to a Veterans and Iraq funding bill: $25 million of OUR hard-earned money to support spinach farmers! What is that doing in a bill for Veterans? Are they going to eat all that spinach?? It sure is easy to spend someone else’s money.

I think the Fairtax idea (HR25 /S 25) is a good one. Our current system started as a ‘flat’ tax but keeps getting screwed up and bloated. It is nowhere near the 1% it used to be. The Fairtax would tax you on what you spend on NEW items, so if you are a saver and buy a used car you’ll pay less tax. Your paycheck would be bigger without losing income, Medicare, and Social Security tax. There would also be no more taxes on savings, death (ha), and other things. Also, illegal/underground/porn/drug ‘workers’ would start paying tax when they buy things (this economy alone is estimated at a TRILLION dollars annually).

Businesses would only pay tax on their sales, thus saving money and lowering costs. US products would cost less to make and our international economy could improve.

Taxing purchases is a much more stable revenue source than taxing income – ask any economist.

Additionally, the Fairtax would help the poor with the monthly prebate which would cover the increased sales tax at the store.

Oh, I also can’t forget that under the plan there would be NO MORE TAX RETURNS. Besides all of the time and headaches saved, our economy would save over $300 billion annually that could be better used to help the elderly, poor, pay down debt, etc.

There are already more than 56 co-sponsors of the legislation. The beauty of this plan is that by having the tax on your receipt you can see how much government REALLY costs, and then you can start pressuring your leaders to do something about it.

With an open tax system like this, it would be very, very difficult to give ’stealth’ money to your political friends, lobbyists, etc. without the American people knowing about it.

Sorry for the length, but in summary we don’t need to ‘change’ the IRS; it needs an overhaul. -MP

April 4, 2007 at 3:56 pm
(12) Lynwood Strickland says:

I love the idea of the Fairtax. I certainly agree with all the comments above. In addition to the above comments with the Fairtax everyone in America would pay taxes. Drug dealers, thieves, illegal immigrants, visitors from other countries as well as all citizens of this great country. Whether rich or poor. The poor will not be hurt by the Fairtax because they will receive a check from the government each month. The amount will be based on a formula to calculate the families income, number of family members in the household and the amount of money a family of that size would need to buy to servive. (food, medicine, medical, utilities etc) The Fairtax would be the heck out of today’s IRS system which is totally negative toward the American people.

April 7, 2007 at 11:42 am
(13) Chip Spradley says:

Fairtax is the only way. Fairtax is my main subject when I vote.

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