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The seemingly endless reams of complex federal tax laws and regulations need to be simplified, and more assistance is necessary for taxpayers who are struggling to pay their tax bills, the National Taxpayer Advocate’s office urged in its annual report to Congress, released Wednesday.
According to an IRS News Release announcing the release of National Taxpayer Advocate Nina E. Olson’s annual report: "U.S. taxpayers spend $193 billion a year complying with income tax requirements, an amount that equals 14 percent of the total amount of income taxes collected. One count shows the number of words in the tax code has reached 3.7 million, and over the past eight years, changes to the tax code have been made at a rate of more than one a day – including more than 500 changes in 2008 alone. Individual taxpayers now find the tax rules so overwhelming that more than 80 percent pay transaction fees to help them file their returns – about 60 percent pay a preparer to do the job and another 22 percent purchase tax software."
The report also urges three key steps to reduce the burden on financially struggling taxpayers: "1) Make greater use of collection alternatives when economic hardship is present, 2) Simplify the “cancellation of debt” minefield that many taxpayers who default on debts must navigate, and 3) Implement a “screen” to protect low income Social Security recipients from continuous, automated tax levies."
An independent organization within the IRS, the Taxpayer Advocate Service assists taxpayers who are struggling financially, who need help with tax problems that cannot be resolved through normal channels, or who believe that some facet of the IRS or the federal tax system is not functioning as it should.