Fixing the Tax System: Accountants Sound Off

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By CPA Trendlines Research

Respondents to the CPA Trendlines Busy Season Barometer seemed a little optimistic earlier this year, but as the season staggers into April, tax practitioners are having second thoughts. Suddenly, increasingly, the season looks bleak. Now more and more respondents foresee a downturn in revenue and profit. Fewer foresee a better year.

Cooper

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Many blame the tax system in general and the IRS in particular. It all boils down to politics. Chris Cooper, a certified financial planner in San Diego, says.“Enact a flat tax or a VAT, and eliminate taxing income and investments. Then do away with the IRS.”

Respondents give plenty of reasons, but most often those reasons implicate the Internal Revenue Service. It’s hard to categorize the variety of complaints.

Gary Price, managing partner of Price & Price, CPAs, operating out of a suburb of Houston, related an especially hellish experience. “The IRS needs a complete overhaul and/or efficiency study as they are out of control,” he said. “They need new and better systems and to hire more people or be more efficient. We have had the IRS process amended returns as originals. They have also torn apart our 1045s and wanted signatures on historical tax returns used as attachments, etc. We have a number of clients still waiting on their 2016 (yes, 2016) refunds after proving their identity and contacting the IRS many times; several have had to appear at IRS offices and some are now having to contact their congressman.”

Change Starts at the Top

Charles Napier, a CPA in El Paso, has a solution: “Start at the top and make sure it is non-political. Examiners need to look for substantial compliance and stop using the ‘gotcha’ issues that exist. I believe that professionals should be assigned a ‘mentor’ or ‘navigator' inside the IRS that deals consistently with you instead of the random walk we get now.”

Brian Blanton, principal of Blanton & Associates, LLC, in Carmel, Ind., agreed that the change needs to start where the organization of the organization starts.

“Change starts at the top,” says Blanton. “Determine priorities and eliminate wasteful spending.  There is no need to increase the IRS budget. Manage it like the business it is.”

From Champaign, Ill., Dan Setters of Accounting plus Tax Solutions, Inc., offers a good practical solution, recommending that “IRS employees should have some real-world experience dealing with taxpayers at the entry level. Decisions appear to be made on the basis of the most difficult, uncompliant people, which drives the process to appear to be needing preparers to become the policing agents for the IRS. It’s important to get correct information, and those we work with desire accurate returns to pay what they owe, not what someone else thinks they should pay. All those due diligence checklist questions drive us to be less than forthright.”

Brief Suggestions

Respondents also offered brief suggestions, some easily said, some easily done. Among them:

  • “Simplify the tax code.”
  • “Make account transcripts easier to read. “
  • “Provide staff and resources to allow the IRS to do its job.”
  • “Hire outside CPA firms.”
  • “Allocate funds to upgrade technology.”
  • “Increase the IRS budget.”
  • “More accessible customer service.”
  • “Hire, train and retain knowledgeable, respectful, cordial individuals.”
  • “Educate. Educate. Educate. And give them nice pills.”
  • “IRS needs a paid committee of CPAs in public practice to assist. The new form designs reflect incompetence.”

Robbin Rendahl, of RA Rendahl CPA & Associates Inc. of Grand Forks, ND, is one of several to suggest doing away with the income tax and a lot of other taxes. “Move to FAIR TAX, which would eliminate most of the IRS,” she said, referring to a proposal in the House of Representatives to replace most taxes with something like a national sales tax. “This would catch all the people who don't pay taxes now as the Fair Tax is basically a national sales tax with credits for the poor ... even drug dealers and the super rich buy stuff and a lot more than I do, but I bet I pay more taxes right now cuz I am honest!”

One is tempted to say, “Let’s try all of the above. Let’s try anything.” But of course, the solution isn’t that easy. Not just anything will work. But something will. Something has to. Something must be done.