September 19, 2006
Nina Olson on Reducing the Paperwork Burden of the Federal Tax Code
For immediate release
Media contact: Brian Phillips (202) 464-5102
Washington, D.C.—The tax code contains complexities and burdensome procedures that lead to errors and can cause taxpayers to pay more than they owe, says Nina Olson, the National Taxpayer Advocate at the Internal Revenue Service. (View full interview at http://www.taxfoundation.org/podcast/show/1837.html.)
“You have something like capital gains, where people have to compute the basis in their stock,” Olson explained. “Sometimes they just give up trying to figure out the basis and they actually low ball it, and they end up paying more than their taxes that are due.”
Olson discussed the challenges of reforming the Tax Code in an interview with Tax Foundation President Scott Hodge in the foundation’s most recent Tax Policy Podcast.
As the “independent voice of the taxpayer inside the IRS”, Olson pinpointed several problems in the Code that must be reformed. One of those changes is the agency’s response to those who pay their bills late or don’t pay at all. She identified three major categories of non-compliance and said they should each be handled in a different way.
“Where the complexity of law leads people to make mistakes, the response is not to go after them with a sledgehammer, the response is to go after Congress to make the law simpler,” she said.
Olson disagreed with some who have called for an increase in the use of private debt collectors. They are prohibited by law from applying individual discretion and judgment from case to case, she explained, which is the heart of the problem.
“It's premised on the concept that there are basic, simple tax cases, and I'm here to tell you, after having practiced outside the IRS for 27 years, and now being National Taxpayer Advocate for five years, that there is no such thing as a simple tax case”, she said.
Just as important as compliance, though, is guaranteeing that the taxpayer’s rights are protected.
“We can argue that whether we need a smaller government, or a larger government and lower taxes, and things like that, but there is this understanding…between the tax administrator and the taxpayers, that we are going to absolutely protect their rights, and absolutely protect their privacy, and really honor the fact that they are coming in and paying the lifeblood of government with their hard earned dollars.”
The interview is Number 7 in the Tax Foundation’s podcast series. It’s available online at http://www.taxfoundation.org/podcast/show/1837.html.
The Foundation publishes a podcast each Tuesday, featuring an interview that sheds light on the nation’s tax system.
Best known for its annual calculation of Tax Freedom Day®, the Tax Foundation is a nonpartisan, nonprofit organization that has monitored fiscal policy at the federal, state and local levels since 1937.
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