Sunday, April 17, 2011

A while ago I got a fat envelope from IRS in the mail; they wanted me to write back. I filed and paid everything, have not tried to cheat or game the system, and have an accountant that I can rely on: so this was only a nuisance. However, it got me thinking.

The envelope contained a three-page letter mentioning the documents they request, along with seven pages of scary forms. It took me some time to realize that the scary forms are detailed calculations describing the adjustments to my tax return in the worst-case scenario: if I am a liar and have no documentation to support my deductions whatsoever, I will have to pay a considerable sum. A table describing penalties and interest was included.

First, wouldn't years of timely and professionally filed returns, accompanied by large checks that always cleared, earn me some credibility with the IRS? If Uncle Sam was an airline, I am sure I would have a frequent flier status. I am not asking for free drinks, but I would expect that the customer service, while clarifying a billing issue, will not start by threatening me.

Second, obviously the forms were generated by software. So the IRS has The One True Tax Program. I already paid for it; it probably cost a lot, knowing how government procurement process works. Why then do I pay a second time for whatever tax software my accountant uses? Open source the IRS code!

Resources will be saved by removing the duplicated software development effort done by US Government, Quicken, TaxACT, H&R Block etc. More importantly, it will completely eliminate any potential incompatibilities that cost time and money for everyone involved, and produce no economic benefit whatsoever.

There will be an additional investment required to clean up and document the IRS code before public release; but this investment will pay off. Imagine the effort saved by being able to cross-reference the tax publications and unambiguously described algorithms. Or—in a dream world—have the two together, literate programming-style. Surely, if the government really strives for transparency and efficiency, open source is the way to go.

(Of course, I am skipping over the larger issues: whether the tax code should be drastically simplified, and whether the income tax should exist at all. I have some perspective though, as I grew up in a country that at the time had no income tax. There are worse things that a government can do to you: I will take IRS over KGB any day.)


Blogger iomongol said...

Платить налоги в америке это бизнес. люди в бизнесе (IRS, H&R Block, CPAs) не заинтересованы ничего менять, чем запутанее и сложнее, тем лучше для бизнеса. Надо упростить кодекс до безобразия (скажем, как в Раше - ХХ% все от дохода), все проблемы с формами сразу уйдут. Только этого, к сожалению, никогда не произойдет. А по-поводу программного обеспечения IRS есть отдельные сомнения, может оно и к лучшему что никто его не видит.

1:07 PM  

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