Tuesday, September 16, 2008

Multinational Survey of Accountants: IRC Unfair, Too Complex

A survey of six national tax systems (Australia, Canada, Hong Kong, Singapore, United Kingdom and United States) found that the U. S. tax system rated fourth in fairness and simplicity with Canad, Hong Kong and Singapore doing better and Australia (most complex) and United Kingdom (least fair) bringing up the rear. Chas Roy-Choudhury, head of the Association of Chartered Certified Accountants (ACCA)which did the survey, stated that the IRS had an "image problem" with the everyday taxpayer. He believed that this image, combined with excessive complexity, contributed to tax evasion. The ACCA also found that the U. S. and U. K. needed to emulate Hong Kong and Singapore regarding communication to tax professionals.

The ACCA may be onto something here. The old saying that you attract more with carrots than sticks probably fits tax preparers--reducing tax complexity as opposed to increasing tax preparer penalties might just be a more effective way to reduce the "tax gap."


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