Change Tax Laws, Instead...If traffic laws functioned like the tax code, road signs would read: ''We're not sure how fast you should go, but you'll know when we pull you over.'' That's just one reason why giving the Internal Revenue Service more enforcement resources won't work.
At $9.9 billion, the IRS budget is already twice as large as the FBI's and has increased more than 20% since 2000. Despite gradual improvements, IRS financial management has languished on the General Accounting Office 's ''high-risk'' list since 1995. Two years ago, Sen. Charles Grassley, R-Iowa, an IRS watcher, expressed concern that the tax agency had been ''providing a distorted picture'' of lax enforcement in order to ''justify budget and staff increases.''
The current hysteria over falling audit rates -- which have now leveled off -- overlooks automated tax-return checks that the IRS computers perform. In 1999 alone, these ''mini-audits'' produced 3.6 million inquiries or tax-due notices. More third-party verification, such as 1099 forms, also has reduced ways for taxpayers to hide income.
Shortly after the 2001 bioterror attacks, a McKenna Research poll reported that more Americans worried about ''receiving an audit notice from the IRS in the mail'' than ''receiving anthrax in the mail.'' Even after Congress enacted taxpayer-rights protections, the public correctly perceives that the IRS still has more powers than most federal agencies to gather information, invade privacy and avoid liability for misdeeds.
The way to improve tax-law enforcement is to change the law itself. At more than 7 million words, the federal tax code and regulations have many gray areas and confuse honest citizens who don't know how to comply. Money magazine's last test of 46 tax preparers for a hypothetical household's return got 46 different answers. In 2002, government auditors found that visitors to IRS tax-assistance centers received incorrect information 50% of the time.
As recent events abroad have shown, vague laws that are enforced mostly through intimidation stifle a free society. A transparent tax law with a simpler base, a single low rate and fewer administrative burdens would build a system Americans respect rather than fear.
John Berthoud is president of the National Taxpayers Union, which advocates taxpayer rights and an overhaul of the tax code.
This article originally appeared in USA Today.