If you’re intimidated by the length and complexity of the U.S. Tax Code, you’re not alone. It has more than 4 million words!
The complicated tax code was recently the target of a critical report by the National Taxpayer Advocate’s office. And there’s enough gasoline to fuel that criticism. The Bible has about 775,000 words in it, making the U.S. Tax Code about five times as long.
Politicians have made so many changes to the tax laws (5,000 over the past 12 years) that it costs the American people 6 billion hours every year to make sure they follow all the rules and regulations. Think of it like this: that would be 3 million people working full-time, year round, making sure all the I’s are dotted and all the T’s are crossed.
Nearly 9 out of 10 taxpayers have found the tax code so daunting, they either pay somebody else to fill out their tax returns for them, or use some sort of software program.
One idea floated around by conservative economists and politicians to simplify tax laws is the use of a flat tax system. It’s brought up and debated seemingly every now and then, but has never gained much traction. Washington politicians always say they support tax reform, but whether a divided government comes together to insert a dose of simplicity in the tax laws remains to be seen.
Navigating our tax laws is a time-consuming and confusing venture in and of itself, which is why when financial situations get ugly, consulting with a tax professional is the best possible route to take.
Sometimes it may seem like not paying your taxes at all is the easy way out to avoid that 4-million-word mess. But having to deal with an IRS-imposed wage garnishment or bank levy to pay your back taxes can be a lot more confusing – and expensive.
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