April 15, 1995, from the Cato Institute:
This year some 40 million Americans will clash with the Internal Revenue Service. In a new Cato Institute study, "Why You Can't Trust the IRS," author Daniel J. Pilla says in a rising number of these confrontations, the taxpayer is right, and the $7.6 billion IRS is wrong.
In the study (Policy Analysis no. 222) Pilla finds that despite a doubling of its budget over the past 10 years and a nearly 20 percent increase in enforcement personnel, the IRS is increasingly incapable of administering and enforcing the nation's tax law.
Pilla cites the following as among the reasons the IRS can no longer be trusted.
The IRS telephone taxpayer assistance program provides about 8.5 million Americans the wrong answer to even the most basic inquiries about tax laws.
This year roughly 10 million Americans will receive correction notices from the IRS assessing about $4 billion. About half of those notices will be erroneous.
About 40 percent of the revenues the IRS collects through penalty assessments are abated when citizens challenge the penalties. In 1993 taxpayers were overcharged $5 billion.
A General Accounting Office audit of the IRS in 1993 found widespread evidence of financial malfeasance and gross negligence. The IRS could not account for 64 percent of its congressional appropriation.
Pilla says the IRS fails to meet the standards of financial accountability and diligence that it imposes on the citizenry. Since the IRS can no longer adequately police itself, it can no longer be trusted with the authority to police individual American businesses and taxpayers.
The time has come to abolish our complicated, intrusive and ineffective income tax system. Never before has the political will and popular mandate converged in support for structural overhaul of our tax system. Both politicians and the public are now calling for a simplified, fair and effective tax collection system. Pilla says policymakers should act now -- abolish the IRS and replace it with a national sales tax.
The study can be ordered for $4.00 from Cato Institute Books at 1-800-767-1241.
Source: Libernet Digest V103 #12.
