Dallas – Reform of the Internal Revenue Service will be of little effect unless tax code reform and a reduction of taxes are also instituted, according to a brief analysis from the National Center for Policy Analysis.
"Recent attention given to IRS reform is nothing new," said Bruce Bartlett, NCPA senior fellow and author of the brief analysis Can the IRS Be Reformed? "Congress has passed two different Taxpayer Bill of Rights in the last 10 years. Neither has solved the problems."
Instead, the problems have worsened, according to the analysis. The agency's budget continues to rise. And, despite a massive increase in resources, the amount of uncollected tax dollars has increased.
The total number of IRS employees rose 33 percent from 1981 to 1988.
From 1981 to 1988, the IRS budget doubled to more than $5 billion.
From 1982 to 1992, uncollected taxes virtually doubled, from $51.9 billion to $95.3.
"Congress and administrations have spent decades pressuring the IRS to collect more revenue," Bartlett said. "And the IRS has always promised to comply – provided it receives more money to audit recalcitrant taxpayers."
Now Congress is poised to pass its third Taxpayer Bill of Rights in 10 years. A start, according to the brief analysis, but more must be done or problems will remain. First, there must be a reduction in the tax burden if relations are ever to improve between taxpayers and the IRS. In addition, Congress must fundamentally reform the tax code.
"As long as taxes continue to rise, it will be impossible for the IRS to compel compliance," Bartlett said. "We need to replace our current tax system with something like a flat rate tax on a consumption basis. Without including these two changes, the IRS will never be effectively reformed."
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The National Center for Policy Analysis is a public policy research institute founded in 1983 and internationally known for its studies on public policy issues. The NCPA is headquartered in Dallas, Texas, with an office in Washington, D.C.